Home Buying in Campbell>Question Details

alano1, Home Buyer in 95136

Our realtor told us we got outbid, but now I see that the sold price was below our offer.

Asked by alano1, 95136 Wed Sep 25, 2013

Last year we made an offer of $750K on a single-family house. Our realtor told us we got outbid, since the seller had received a much higher offer. She asked us to increase our bid, but we declined and just waited. Last month I decided to check on that house and saw that it sold for only $740K, below our offer. Can someone explained to me how this works? Did our realtor lied to us?

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Answers

22
As others have said, sometimes the best offer is not the highest offer. There can be other terms in a deal that the seller will value more than the bottom line price (assumption of non-mortgage debt, paying for pre-closing repairs, etc.).
But this situation will continue unless you improve communications with your agent. "You were out-bid" means nothing if your agent can't explain specifically how. But here's the truth - your agent has no way of knowing the content of anyone else's offer. After the deal closes the sale price may be published in the MLS and county records, but if the buyer used non-price bidding tactics to make their offer better than everyone else's, then you may never know how you got out-bid. As a listing agent, I'll only tell buyer's agents how many written offers I have received and if any of them are at or above the asking price. I'd never disclose the specific content of one agent's offer to another agent, even after escrow closes.
If you're trying to buy in a market that favors sellers and there are a lot of buyers throwing money at the few homes for sale, your agent needs to focus on tactics other than just the price.
2 votes Thank Flag Link Thu Sep 26, 2013
Well, you have to consider there are other factors in addition to the purchase price that would make an offer stronger. In some cases an all-cash offer with no contingencies will beat a higher offer with a loan and a property condition contingency. And there are many other combinations of factors that may get another offer accepted instead of yours. Better luck next time!
Web Reference: http://talisrealestate.com
2 votes Thank Flag Link Wed Sep 25, 2013
An agent who does not do any negotiations for you is not doing one of the most important things an agent can do. Buying a home is not like buying an item off a grocery store shelf. A purchase offer is judged by: price, terms, your credibility, your agent's credibility, your lender's credibility, how well the people interact and many other things.

I would recommend you come to one of my buyer seminars.
http://julianalee.com/buyer-seminar.htm

As has been said below, the price may have been adjusted after the purchase contract was accepted. If your agent only told you that you were outbid it is possible that was all she was told by the seller's agent. Not all information is shared equally or openly. Understanding why your offer was not accepted, how important that home was to you, or what to do differently are key to a successful purchase.

Campbell home values are at http://julianalee.com/campbell/campbell-statistics.htm
Recent Campbell home sales are at http://julianalee.com/campbell/campbell-home-sales.htm

Juliana Lee
Top 2 agent nationwide at Keller Williams Realty, the nations largest
Cell 650.857.1000

Over 20 years experience
Over 1,000 homes sold in Santa Clara County and San Mateo County
.
Web Reference: http://julianalee.com
1 vote Thank Flag Link Fri Sep 27, 2013
The seller determines the qualities that define desirability. With this said, it often happens that criteria like: cash offer, closing date, seller contribution, and other terms help sellers identify their buyers. Yes, it's very common for buyers with a lesser offer amount to win the competition. Again, it's based on what the seller views that will benefit them.

In the event of a foreclosure, it's fairly common practice for banks to accept a lesser cash offer over a financed one because they understand the borrowing process and the relatively high degree of borrowers that can't obtain "final approval" from their underwriter.

Good luck,

Bill
1 vote Thank Flag Link Fri Sep 27, 2013
There are many reasons why the final sold price could have dropped or they just went with a smaller offer. Maybe type of financing, an all cash offer, not sure what your offer looked like besides just price, that could have played a role. There could have been adjustments in the price after inspections were done, many other possible reasons.
1 vote Thank Flag Link Thu Sep 26, 2013
Thank you all very much for your thoughtful and honest answers. Sounds like I need to find a new realtor as mine did not do half of what some of you suggested. We're new to this home buying saga and not sure what a realtor is supposed to do for us. We were looking at both new and pre-owned homes, and on the new homes, she did not do any of the negotiations for us. She told us to talk to the builder ourselves and practically left us standing on the curb.

A bit more detail on my previous question - we had no contingencies, were pre-approved and can put down more than 20%. We're in no hurry to buy, and we're not looking to put the blame on anyone, just trying to understand this whole process and see what we can do better next time.

We will approach our next offer more informed and hopefully with a trusty realtor that can help us along the way.

Regards,
Alan
1 vote Thank Flag Link Thu Sep 26, 2013
Alano,
You might look for an exclusive buyer's agent. They are specialists in buyer issues and have no conflicts as they take no listings themselves. That being said, any good agent can act as your buyer's agent with a contract between you setting forth the resposibiltiies. You want a relationship where the agent is treating your transaction as if it were his or her own! You sound like great buyers--you should be able to get a quality, professional agent and a fabulous home. Good luck to you.
Flag Fri Sep 27, 2013
Honestly, you'll never know. At that moment, you may likely have been outbid...but sometimes homes don't appraise at full value or price adjustments are made during an escrow period.
1 vote Thank Flag Link Thu Sep 26, 2013
One of the biggest reasons for your offer being disregarded for another is being pre-approved. Are you pre-approved or are you making offers with no backing?

Alex Greer
Loan Officer
NMLS #1056079 http://www.TheMortgageOutlet.com

408-352-5147
AGreer@TheMortgageOutlet.com
1 vote Thank Flag Link Thu Sep 26, 2013
There are several reason why an offer is not accepted, you were probably "outbid" by terms other than price. Who pays what, contingencies and timelines are all factors sellers consider when looking at offers. not just price.

J.R. Thrasher
http://www.SanDiegoRealEstateVeterans.com
619-929-0105
1 vote Thank Flag Link Thu Sep 26, 2013
It could very well be that after inspections the price was adjusted. That happens a lot. I doubt your agent lied to you. There would be no reason to do that and it is unethical for someone who is a Realtor to do that. I am sorry this happened to you. As an exclusive buyer's agent in a market with not enough inventory, I have had one deal get lost because we went in too low (at my clients' suggestion) and were not offered the chance to bid again. The seller can choose who to accept and whether to ask for second round bidding. They often opt not to do that. If you really know the market and the house is worth the extra money (or you have an appraisal contingency), it sometimes makes sense to offer more. But you are skeptical of the process, as are many folks, and so were not comfortable doing that. I suggest you find an agent that you trust implicitly in the future. That is the key.
1 vote Thank Flag Link Thu Sep 26, 2013
It all depends on what the seller accepted as a "better" offer, maybe outbid was the wrong terminology in this case but other parts of the other offer must have been more attractive to the seller, generally there would be no reason that your realtor would have lied to you about this considering he/she gains from your purchase of the property as well.
1 vote Thank Flag Link Thu Sep 26, 2013
There is no viable reason why your agent or any other agent would choose to lie about a bidding situation with their buyer client. During the buying process, while under contract, the variables and processes can change along the way for seller and buyer to closing. Negotiations do not stop after an offer is accepted by a seller. Your agent might have additional information on this deal. You may want to give your agent a call to follow up. Thanks.
1 vote Thank Flag Link Thu Sep 26, 2013
The seller may have initially accepted a higher offer but there may have been inspection issues etc that resulted in a lowering of the price. The terms of an offer are also very important, especially if it's all cash. Each case is different and will depend on the seller involved. Unfortunately, It is also very possible that someone didn't tell the truth.

Chris
1 vote Thank Flag Link Thu Sep 26, 2013
My guess is the property did not appraise at the offer price and the seller agreed to a lower price at that point. Last year and earlier this year the appraisals were lagging the market and often came in under the selling price.
Good luck,
1 vote Thank Flag Link Thu Sep 26, 2013
I seriously doubt your realtor lied to you , what did she have to gain in doing so? There are many factors in an offer that a seller and their agent review. The strength of the offer, any credits, who pays what, and contingencies. It's very possible the other offer had zero appraisal contingency, cleaner terms, and more money down. Or perhaps it was higher at the time of acceptance and during the negotiations the buyer renegotiated due to low appraisal or repairs. The bottom line is all that he seller is concerned about.

Also the lender you select. If the listing agent has any issue with the lender they may sway to another offer they feel would go to closing, even if it was lower.
1 vote Thank Flag Link Thu Sep 26, 2013
To answer your question no. This is a good learning moment. By choosing not to increasing your offer when advised to by your Realtor you were out bid. She may have suggested that because there were other factors to overcome to have the seller choose your offer. Such as finance type, closing costs, warranty, inspection, contingency, closing date. An example would be if your closing date was 2 months later then the other offer at 750,000. That is a savings of $7,500 in payments to the seller at a 4% rate. Instead of explaining every possible variable she may have just recommended raising your offer. Another possibility is the sale never went through and it was sold again. Hope this gives you some peace of mind.
1 vote Thank Flag Link Thu Sep 26, 2013
What was your Realtor told by the Listing Realtor? Was the other offer all CASH and your offer contingent upon financing? What negotiations took place after the home inspection?

The are an infinite number of items that change a transaction on the way to closing, if the listing Realtor told your Realtor, that the seller accepted another offer, then your offer was out bid.
1 vote Thank Flag Link Thu Sep 26, 2013
No, I don't think your realtor lied to you, as Elena pointed out there are many factors such contingency
Length, cash offer, cash back, larger down payment just to name a few as to why you were " out bid".
I hope that you have purchased something since then?
Please feel free to contact me with any questions.
At your service,
Allyson
408-705-6578
allyson@homesbyallyson.com
1 vote Thank Flag Link Thu Sep 26, 2013
Hi Alano:

I dont your Realtor has any reason to lie to you.

There can be a few reasons what could have happened:

1.) The property did not appraise after the offer was accepted and the price was reduced.

2.) After inspections, they re-negotiated the price as they found that the property needed a
lot of work.

Happy Holidays.
Perry Mistry

http://www.ruthandperry.com
0 votes Thank Flag Link Tue Dec 16, 2014
A common reason this can happen is the appraisal factor. If the offer was higher than the appraisal value often the buyer and seller will re-negotiate a new sale price based on appraised value.
0 votes Thank Flag Link Tue Jan 28, 2014
Please explain to us non realtors why if you offer more than the appraised value, you are not stuck paying that higher amount exclusive of a loan contingency? Also if you pay the sellers costs in exchange for a lower sale price, does that result in a lower tax bill for that year?
Flag Mon Feb 3, 2014
As it's all done and over, why not call the listing agent to find out?

In addition to what Juliana Lee shared, it's also possible that the accepted offer did not go through, and they accepted a back-up offer. Or that things were discovered during the escrow that resulted in a lower price.

Sometimes investors will offer a higher price-then offer to pay traditional seller closing costs to "buy down" the price. For example, say the price was $795K, the seller has about $55K in closing costs, including agent commission. If the buyer offered to pay for the seller closing costs of $55K in return for a lower sale price of $740K, you can see how both facts could be true.

I encourage you to find out more so you feel comfortable moving forward.
0 votes Thank Flag Link Fri Nov 1, 2013
No, your agent did not lie to you.
However, it is evident you were outplayed.
Your agent DID share with you the buying process.
Your agent also shared with you the negotiation process, the ENTIRE process.
You did not have faith in what your agent told you or trust the ability to get the price lower and lower and lower.
Now you are looking for someone else to blame.
Sorry, you are the one who choose to ignore your agents advise.
-
You were not lied to. You withdrew from the process before the dance even started.
0 votes Thank Flag Link Thu Sep 26, 2013
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