Home Buying in 07657>Question Details

LIDIA, Home Buyer in 07657

Every offer I make my agent tries to convince me that it is to low. Most of the houses I have looked at need

Asked by LIDIA, 07657 Mon Jun 30, 2008

over $100K of work into it. Is it fair to say the the agent is more concerned about the commission he puts in his pocket?

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There is a lot of inventory in NJ right now. When a property is overpriced, agents are quick to acknowledge that and move on. When an agent tells you that your offer is too low, it is, most likely, because the agent suspects that offer will not be accepted. The agent is trying to get you into a property for the best price and terms possible. If the agent simply writes offers, but none are accepted, the agent has not succeeded. I would not say that the agent is more concerned about commission. I would say the agent is concerned about getting you into a property, and prices are determined by the market. The agent will provide you guidance and feedback based upon the market conditions.

You said the properties need work. The need for for work is not the determining factor for price. There can be two properties, one priced at 400K and the other priced at 900K, and both can need 100K of work..yet, there is a wide spread in value between these two properties.
2 votes Thank Flag Link Mon Jun 30, 2008
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
Hello Lidia, are your offers being accepted? usually if your agent is advising you not to put such a low offer, it means that his expertise is telling them that the offer is unreasonable based on market comparable sales. When i work with buyers and they see a house they like, i normally do a CMA for them to see what a FAIR price is for the house. There are certain situations where the house is priced right, and it would not be worth it to offer even a dollar below asking... Many of my listings actually sell above asking price. At the end of the day, list price means nothing, you need to know what the houses market value is, and the only way to know for sure is for your agent to run a CMA. If after the CMA you still want to present a low offer, then it is up to your agent to do his or her best to get it accepted, regardless.
1 vote Thank Flag Link Wed Jun 29, 2011
Hi Nivea,

It is the exception, not the rule, that a seller will sign an acknowledgement of presentation of an offer. A buyer or buyer agent may request this, but the seller is not obligated to provide it. Most sellers will, upon request. Most listing agents will, upon request.

Depending upon the price point, a 20K-30K spread may not be that much in today’s market. However, in specific cases, where a property has been aggressively priced for a quick sale, a property can still sell for over asking price.

The following are recent examples:

Represented the seller: Price low, aggressively marketed - Received multiple offers over list price.

Represented the buyer: Buyer wanted to go in under asking. Advised buyer that the property was priced substantially under market, and would most likely receive multiple offers and sell for over list. Buyer was provided a second oppty for final and best. All buyers put forth their final offer. Buyer offered asking price. Buyer lost the property to another buyer and it went over list.

Represented the buyer: Offer made, seller rejected after counters and negotiations. Property is still on the market and reduced to a price within close range of the buyer’s offer. I stood by my buyer and supported the decision to walk away.

Bottom line: My advice depends upon the specific property.

Make sure the advice you receive is tailored to the comps and that specific property. There is no rule of thumb. Many properties will go to contract at sale prices 20K, 30K, 50K under the asking price. There will also be properties that will sell for over list. Each property must be looked at individually.

Your agent should be giving you sound reasoning why he/she thinks a price is too low. Don't base an offer price on the seller's ask. Instead, base it on the value as represented by recent comps, competition and market activity. When that data supports a price offering 50K below, proceed accordingly. And, likewise, don't be afraid to pay overlist.....it might be one of the best deals out there.

Deborah
1 vote Thank Flag Link Mon Jun 30, 2008
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
No, it's not fair to say he is more worried about his commission, but it is fair to say that he works for you. If he doesn't feel comfortable making "lowball" offers you need to find an agent who is. Talk to him and discuss what chance you are willing to take that the offer is refused and consider that you may not be taken seriously on that house again. If your willing to take the chance it may be refused, make the offer as low as you want.
1 vote Thank Flag Link Mon Jun 30, 2008
Who knows, maybe your offers are just too low.
Web Reference: http://GetPrequalified.com
1 vote Thank Flag Link Mon Jun 30, 2008
Hi Nivea, now I see the thread that I think you are building on. Any ready willing and able buyer should not be dissuaded from making an offer. The biggest issue today is buyer hesitancy.

Incorporating a sound pricing analysis will greatly help your efforts. First off it will immediately flush out overpriced homes and also identify good values. It is a great tool to bring to the bargaining table - I reiterate my earlier point, an offer that can be sustantiated is compelling. I find that offers that simply appear to be low balls based on just a hunch cause are more apt to cause ill will than get a dialogue going.

Perhaps the agent's hesitancy reflects his/her uneasiness because the offer is tough to justify. As you formulate your pricing strategies, listen to your agent's opinion - he/she is working for you and their goal and yours is one and the same - to successfully close on a home. They will not make a penny if you don't succeed.

Best,
Jeannie Feenick
Weichert Realtors
Search and connect at http://www.feenick.com
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Mon Jun 30, 2008
Hello, I am a Real Estate agent in North Carolina. Our market in my town is a buyers market right now and sellers are getting lower offers on their homes, however most seem to come to an agreement on price somewhere in the middle. What I always do for my buyers is I do a market analysis on the property and see what other homes is the area have sold for also look to see when they bought it and what they paid for it. After that we see what repairs need to be done and come up with a starting price. Your agent is most likely just trying to help you and is not trying to make you pay more so that he/she gets a larger commission. If you have made numerous offers and have not gotten any response then you may want to listen to your agent and go a little higher next time. Of course you should always be comfortable with who you are working with and trust that they are doing what is in your best interest so maybe you should sit down and have a talk about your concerns and see if you can get things worked out so you will regain confidence in your agent.
0 votes Thank Flag Link Mon Jun 30, 2008
If you have put in multiple offers and none are accepted (are they even countered?) it leads me to believe they are too low.
0 votes Thank Flag Link Mon Jun 30, 2008
Are your offers not being accepted ? If this is the case, you REALTOR is just trying to help you. His / her job is to know the market and guide you in order to help you GET an accepted offer. If the homes you are looking at need work, the asking price likely already reflects that. Trust their judgement, that's why you have a professional working for you.
0 votes Thank Flag Link Mon Jun 30, 2008
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