Does law require that buyer must have an agent? Is it illegal to buy a house without an agent? Professional code? Many real estate and loan agents are corrupted. Otherwise, we shall not have this Sub-Prime mess. Please do not preach to us. You guys are the ones need to be educated.
Do you know For Sale by Owner. Do you know nowadays many agent (including loan brokers) provide cash rebate. Some even rebate 3/4 of their commission. Redfin.com rebate 2/3. If you use a friend, you can even pay a flat fee. I have heard nobody complaining about those discount brokers. I proposal is just one more step, you are your own agent and put full commission toward final price. By doing that, there is no tax impact.
Why use a full service buyer agent. Many real estate transaction are just plain vanilla, which involve very little risk. In those cases, the 3% paid to buyer agent is just a total rip off with no benefit to buyers. You can do most of research online and get advice online and from people surround you.
I do not dislike agents. If I were selling a house, I will use one. That is just too much headache and take too much time to list and finally sell a house. But for purchasing, I do not see any benefit from it.
You can first fire your agent. The find a discount broker who is willing provide you 2/3 rebate like redfin.com. Re-submit offer with slightly higher price. You final out-of-pocket is same but your offer price is higher. Do you think your agent really desire your $20k?
-Steven Michael Fong
Sunil Sethi Real Estate
That is totally wrong. Seller is no stupid. He can always re-negotiate with his listing agent for commission payment if you offer to waive buyer agent fee. It is now common practice. Many of my friend bought houses by pricing buyer agent fee into final purchase price. If you do not believe, you can talk to a listing agent and ask if he is willing to do it.
All agents on this forum try to protect their interest. They always try to hide the fact that buyer can save extra without using an agent. I am just like you, also a buyer. I am neither benefit nor hurt if you wasting your money in agent fee. But those agents do care. You know who shall listen to.
Why not writing offer on your own and waive all buy agent commissions? Seller will more likely accept your term because it can save them 3% commission.
For a AS IT property, it is more helpful to find a respectful inspector to check the house thorough and give you estimation on possible repair cost.
Let's unravel the issues.
First, you should be making offers based on the values of the homes. Just because a house is listed for $515,000...or $550,000...or whatever, doesn't mean that's what it's worth. It could be worth more or less. If, for instance, that $515,000 really is worth $525,000, then an offer of $520,000 (even though it's above the asking price) would be a reasonable value to you. So, without knowing the comps, it's impossible to say whether your offers were out of line or not.
Second, there's the perception of a "low ball" offer. Sellers have different perceptions. Some already think they're "giving their house away" at whatever the list price is. I've talked to many owners who explain, in excruciating detail, why their property is worth so much more than identical properties on the same street. In one case, it was because the owner spent two months painting one bedroom and the dining room. In another case, it was because their backyard was a tiny bit larger. These folks will consider any offer below a full price offer to be unacceptable. In other cases, though, sellers are willing to take substantially less than the list price, and they're happy to do so.
All you really can do is determine the home's true value. Then, depending on how much you want the house (and perhaps your perception of the degree of motivation of the seller), keep your offer at that level, or drop it down some. Your Realtor can help you out with that though, ultimately, it's your decision.
In addition, for any properties still on the market (as you say those are), there's nothing to stop you from making another offer. Banks, for instance, will reduce the prices on REOs until they sell. And individual owners may become more motivated if their house doesn't sell in, say, 60 or 90 days.
Bank's are picking up speed and education in handling REO offers, and what may seem like a reasonable offer from your prespective may not be the case from the Asset Manager who reviews the offer.
I've represented several successful buyers of REO's, in each case what made the difference was that we did as much research as possible to set our offer accordingly.
In one case, my client had to make an offer exceeded the asking price by 5% because the area and schools were so desirable.
In another we came close to asking price by eliminated contingency's, repairs, and inspections. In the end when we were done negotiating we paid asking price, got contingency's, and Home Warranty and Title and Escrow.
So, make sure that you and your Realtor are doing all the research necessary to strengthen your offer.
Itâ€™s interesting to know your story.
I would sayâ€¦
â€¢ Terms of the contract should be clear and not complicated.
â€¢ It should be attractive to the sellers/Banks.
â€¢ Your agent should know how to structure an offer prior to writing a contract
â€¢ Your agent should have conversation with the listing agent
Well Megh, there are some secrets of negotiating and getting home of your choice, before the interest rates changes. I have closed several REO deal for my clients this year.
Without wasting any further time, call me for a no obligation meeting. My cell 510-381-2105
or e-mail me at CharoBhatt@gmail.com
Iâ€™ll be happy to help you negotiate a good deal.
Are you making strong offers?
The amount you offered on all of the properties is quite low.
What other terms are you offering that would make the low-ball price enticing to the seller(s)?
Cash? Quick closing date?
You aren't asking for closing costs or repairs along with your low-price are you?
Have you considered looking at houses in a lower price point?
Most homes in our area sell for 97-99% of list price. You say they have all been tiurned down...it may not just be price. Are you asking for the bank to pay for closing fees, inspections, and warranties?
Except for the first offer, all of these offers are extremely low.
Unless your agent is advising you to write this low, it may be your offer price. Consider looking for homes closer to your price range. Good luck!
â€œYes, I am lost. Please explain to me.â€ response by Lenin
That pretty much sums it up completely. Just for the sake of helping out Lenin, who OBVIOUSLY doesnâ€™t know what he is talking about, letâ€™s look at few issues:
1. Procuring cause.
If the home has been shown to a specific buyer by a realtor or â€œbuyerâ€™s agent,â€ other realtors who adhere to the professional code of ethics should not write an offer for that buyer on the same property. To do so is a breech of ethics. This especially applies to the listing agent. As an example, this is why new home builders are adamant that a buyerâ€™s realtor accompany them on their first visit. Your little idea of having the buyer return to write an offer directly with the listing agent without their buyer agent is just plain silly. And a violation of the realtor's code of ethics.
2. Dual Agency
If an offer is directly submitted by a buyer to a seller whose home is listed by a realtor, the contract specifies that the listing broker becomes the agent for the buyer and thus becomes a dual agent. This is also specified in the fine print in the agency disclosure that must, by law, be part of any offer with realtors involved. Whether the buyer likes it or not, they are now FULLY and legally represented by a realtor. This realtor is now FULLY responsible for the buyer AND has a fiduciary responsibility to fully represent the buyer. If, in this arrangement, the buyer tries to negotiate on their own, they actually breech the fiduciary responsibility of the realtor involved in the transaction and open that realtor up for potential legal action. Seasoned realtors WILL NOT accept the legal and fiduciary responsibilities of both a buyer AND seller in the same transaction (dual agency) without compensation that is commensurate to the risks AND extra costs involved (such as additional E&O insurance).
Lastly, because of the potential legal and conflict of interest issues, some asset managers (hired by banks to handle their REOs) instruct those realtors listing their REOs to represent the sellers only.
The fact that â€œmanyâ€ of your friends have managed to negotiate arrangements like this with listing agents might mean a couple of things: (a) the listing agent could a â€œgreen agentâ€ and unaware of the legal implications of such an arrangement OR (b) may be desperate for income and looking for a quick buck. In either case, I would NEVER want that type of agent representing me, ESPECIALLY IF I WERE THE SELLER. I need representation I can count on for any issues that may appear down the road. Just like I would NEVER go to a cut-rate dentist. I only get one set of teeth. And buying a house is the largest investment most people ever make. Why would you risk a potential law suit and inadequate representation to save a bit of money? VERY, VERY foolish.
3. Self Appointed Experts
Iâ€™m sick and tired of self-aggrandizing â€œexpertsâ€ who hide behind pseudonyms and use this format to fire off banalities like they actually know what they are talking about. All of the Realtors who contribute here identify themselves clearly and are responsible for what they say. The two issues above are merely the tip of the iceberg of issues that are prevalent when trying to do an end run around professional realtors. Truth is, there may be a few competent individuals out there who do not need a realtor. Iâ€™ve met a few. And I am sure there are a few out there who have also pulled their own teeth and removed their own appendix. These types of folks are few and far between. Most people need professional representation. I am a professional in real estate law, and yet, for all of my personal real estate transactions I choose to use a realtor BECAUSE of the protection and legal covering they offer in any given real estate transaction. There is an old saying out there that applies to all of this: â€œYou donâ€™t want to be penny wise and end up being pound foolish.â€
Another client and worked hard on estimates for repair and they bought a home listed at 212 for 165 with a 203k loan.
Right now there is no way to tell what a lender will and won't take without giving it a shot. Keep your eye on the properties that you were rejected on and wait for the price drop because it will come.
By the way ignore Lenin the marketing fees are already contracted in the listing agreement and the listing broker gets all the commission if you represent yourself. Lenin just likes to stir the pot and does not understand real life just as when he was in Russia.
Your realtor can/should ask the listing agents for feedback on your offers and why they weren't accepted.
The offers don't seem too low ball to me....but there may be other issues. For example, what were your terms?
Were you attempting 100% financing?
Do you have too low, or even no initial deposit?
Too low down payment?
Did you include your preapproval letters?
Were you asking for credits (forget credits or repairs--- REOs are almost always AS IS)?
How long an escrow period?
And...how experienced is your agent in writing offers? Did your agent follow the instructions on how to write an offer on an REO? Some banks specify to write the offer on, or with their own forms. The agent should follow the instructions to the letter. Was there a timeline to submit the offer, and did you and your agent meet the deadline?
If the banks counter your offer, asking for your best and highest offer, how did you respond?
Again, if the houses you like(d) are still active, consider writing another offer. And if you suspect that your agent may not know what he's doing, ask the broker to assign another agent to help you....or find yourself another agent who is more esperienced with writing offers on REOs.
And, while you're doing your research, take a look at this article on buying REOs http://realtytimes.com/rtpages/20071207_buyreo.htm
Since there is no definitive definition for a â€œlow-ballâ€ offer, there are sellers out there who consider an offer of $30,000 or more under asking price to be a low-ball offer. It is not related to sales in the area â€“ it is based upon what the seller feels their house is worth. You wrote an offer of $470,000 on a home with an asking price of $519,000 â€“ that is a differential of $49,000. Most sellers would consider that a lowball offer.
Iâ€™m certainly not suggesting that you overbid â€“ however, you want to come up with a price that is good for both you AND the seller. While you want to get the best deal you can, you also want the seller to feel good so that they cooperate fully to close the transaction. A good Listing Realtor will work with the seller to set a realistic price, and a good Buyerâ€™s Agent will negotiate with the Listing Agent BEFORE writing an offer to maximize the success of any offer they write.
It sounds like you have had some frustrating experiences so far. It is no fun submitting numerous offers and yet not being able to successfully secure a home of your own.
Weâ€™ve closed a large number of transactions so far this year for both buyers AND sellers, and so what I want to say is based upon experience, not conjecture. I am concerned about the market. It appears that the bottom of the market is starting to firm up â€“ weâ€™ve recently seen numerous multiple offers in many different locations and with different types of properties. In addition, investors are now getting back into the market. These are typically indicators that the market is beginning to change. Lowball offers are not an effective strategy in a changing market. In a transitional type of market where I believe we are heading, your agent should be aggressively addressing your concerns and be working in a proactive manner to effectively negotiate a deal for you.
If you believe you have not been properly represented, it could be time to switch to a Realtor who will more effectively represent you and your concerns.