Annoyed: Making an offer on a condo

[Bestwifeever]

Unfortunately I think you really have to look out for yourself when buying a property--the saying is "buyer beware," never "seller beware."

We have never sold a house, having bought ours back when a handshake was almost considered a contract, but I was with DD when she sold her condo. Sitting there with the selling agent and his assistant, I hear numerous phone calls back and forth as they negotiated a price with the "buyers agent" (whose fee was determined by the selling price!). The buyers agent told DD's agent to keep negotiating above the buyers' counteroffers as he shared exactly what the buyers had told him their ceiling was and had no qualms about sharing that information and more with DD's agent, including all the financial details the buying family had shared with him over the time they looked at properties and what the agent had found their net worth to be.

 

[sheehs1]

Unfortunately I think you really have to look out for yourself when buying a property--the saying is "buyer beware," never "seller beware."

We have never sold a house, having bought ours back when a handshake was almost considered a contract, but I was with DD when she sold her condo. Sitting there with the selling agent and his assistant, I hear numerous phone calls back and forth as they negotiated a price with the "buyers agent" (whose fee was determined by the selling price!). The buyers agent told DD's agent to keep negotiating above the buyers' counteroffers as he shared exactly what the buyers had told him their ceiling was and had no qualms about sharing that information and more with DD's agent, including all the financial details the buying family had shared with him over the time they looked at properties and what the agent had found their net worth to be.

Yup, I have made that mistake too. Eventually some information leaked out in conversation during the last 2 previous summers of working with the agent I don't want to work with anymore (different state from this one).

I also think that is why she kept wanting to show me and sent me listings way above my stated price range. If they think you have a nickel....beware.

Not this time. Have only shared the financials with funds available and that are needed to close.

I'm taking tonight...to "sit on it". Want to read every word of the contract and the condo docs before I give her any go ahead.

Thanks to every one so far for responses. Your own personal experiences help.

 

[Texas Proud]

It wasn't "just" putting her card down. I should have elaborated. The renters were there and she had them write their name, address and phone number down for her.

Wow...is all I can say regarding the response the closer gave you. I believe her don't you? Speaks volumes huh?

Yep, much different than what I thought...

Yes on the closing lady... I think there are some honest RE agents out there, just like some honest car salesmen.... it just seems that finding one is harder than it should be....

 

[Texas Proud]

Unfortunately I think you really have to look out for yourself when buying a property--the saying is "buyer beware," never "seller beware."

We have never sold a house, having bought ours back when a handshake was almost considered a contract, but I was with DD when she sold her condo. Sitting there with the selling agent and his assistant, I hear numerous phone calls back and forth as they negotiated a price with the "buyers agent" (whose fee was determined by the selling price!). The buyers agent told DD's agent to keep negotiating above the buyers' counteroffers as he shared exactly what the buyers had told him their ceiling was and had no qualms about sharing that information and more with DD's agent, including all the financial details the buying family had shared with him over the time they looked at properties and what the agent had found their net worth to be.

This is exactly what I was talking about... in Texas there IS no such thing as a buying agent... there is an agent that is working for the buyer, but by law they work for the seller and are SUPPOSED to tell the seller everything you say...

I think the only way you can have the agent on your side is if you sign a separate agreement and pay for them yourself....

I am not surprised on what you wrote... in fact, I am more surprised that more people do not know this....


Edit to add.... my dad was a RE agent for a few years back in the 60s and 70s... it was a tough way to earn money...

Adding more... http://ezinearticles.com/?Buyer-Agency-in-Texas-Real-Estate---What-Is-Involved?&id=6841904

Looks like you can get an agreement now, but have to make sure you get it in writing....

 

[haha]

Unfortunately I think you really have to look out for yourself when buying a property--the saying is "buyer beware," never "seller beware."

We have never sold a house, having bought ours back when a handshake was almost considered a contract, but I was with DD when she sold her condo. Sitting there with the selling agent and his assistant, I hear numerous phone calls back and forth as they negotiated a price with the "buyers agent" (whose fee was determined by the selling price!). The buyers agent told DD's agent to keep negotiating above the buyers' counteroffers as he shared exactly what the buyers had told him their ceiling was and had no qualms about sharing that information and more with DD's agent, including all the financial details the buying family had shared with him over the time they looked at properties and what the agent had found their net worth to be.

I lied routinely to everyone except bankers when I was making offers.

I can't cheat them; but they can make a pretty good shot at cheating me. I was paying cash, so my qualification consisted in showing that I had cash consistent with my offer. So I tranferred exactly that much cash to a separate account, and told the agent that not only would I not go higher, I could not, as I had no more money and I would not qualify for a mortgage. (Which may have been true under the prevailing conditioons at that time.)

This enabled me also to get the seller to pick up quite a bit of my closing costs, because she did very much want to sell in that soft market, and it appeared that I was completely tapped out.

Real estate seems to be a friendly blood sport, much like serious poker.

Ha

 

[W2R]

Hi all. Am very annoyed with the real estate process. This past week-end, my husband and I found a condo we were willing to make an offer on.

Isn't it odd that it is not until we attempt to make an offer that the agent tells me, "I spoke with the other agent and she said there is another offer coming in and it too is for cash".

I had a similar experience last weekend. I went to an open house across the street from Frank's house. The house had been on the market for just two days. I liked it well enough, but the price was pie-in-the-sky ridiculous. I might have considered contacting my realtor and making a lowball (realistic) offer anyway, but the seller's agent conducting the open house said she already had an offer. Huh? That early? Houses are not selling quickly here, at all. It just makes no sense.

Needless to say, I did not make an offer. On the way out, I whispered to Frank that I'd bet it will still be on the market this summer and at a lower price. If it is, then I'll reconsider.

Frank thinks it might be some kind of funny business. Maybe they want to sell it to a relative (extremely, extremely common here) but at a low price, and for property tax purposes want to document that it isn't worth any more than that because they got no other offers? Or who knows what.

 

[clifp]

All's fair in love, war and marketing. Do not allow your emotions to take over. Offer what you think the condo is worth, period, and let the chips fall where they may.

Having recently sold a 4 Plex in Vegas in Feb, which is a very hot market, let me explain how this could have happened.

I deliberately priced it pretty high when I put it on the market in Dec, 18% above what I bought it for in July. I was not trying to flip, just decided that owning a property which attracted poor tenants was more trouble than it was worth.

During the 45 days it was active I got 8 offers, 5 offers were decent offers above my July price, 3 were crazy low ball offers ~20-25% below my asking price. I did use the existence of the other offers to negotiate a higher price, telling the buyers we truthfully we had a cash buyer, eventhough I had no intention of accepting the other offers.

So from the perspective of the first buyer (who in hindsight I probably should have accepted since it was within a $1,000 of what ultimately got).
There was a a couple of week between we ended negotiations and it went into escrow, and then it fell out of escrow only to be sold a several weeks latter to a 3rd serious buyer.

 

[obgyn65]

+2

All's fair in love, war and marketing. Do not allow your emotions to take over. Offer what you think the condo is worth, period, and let the chips fall where they may.

 

[calmloki]

Heh - HaHa reminds me of the car dealership line: "buyers are liars".

We buy and sell and look at a fair amount of property; lately the flippers are making offers on a dozen or so places at a time and then backing out most all of the contracts in favor of the best deal they can sew up. It's not pretty and it pisses me off, but it's the nature of the game these days, along with "strategic defaults", which also irk me no end.

We just got back from an Arizona trip where we drove up to an amazing location rimface dome home we had made an all cash offer on in 2010. Bank opted for another offer and then it waffled around for months and months until just before we drove down to the La Quinta California place we bought instead, when the agent called me to say the bank would now accept our offer. I'm ashamed to say I responded poorly. Still have sour grapes over that place and a few others, but its worthwhile remembering that its easy to buy and one can repent at leisure. Zen property - if it's meant to happen it will...

 

[sheehs1]

Just made it thru the contract and the 1982 condo docs. Some problematic issues. Enough so that I think we are backing off. Didn't want to bore you all with the details but I can if you'd like!.

Here's an example: This place is made of stucco (EFIS). In order to get the EFIS inspection I have to get the permission of all other unit owners. This is a 4 unit condo.
I'm aware of the problems with EFIS and the replacement cost and was taking that into consideration with my offer. I know because my mother's condo was made of EFIS and they went thru a special assessment, assessing every unit owner $25,000. This one will be more like $50,000 since there are only 4 unit owners. But there are no plans in writing to replace it which is problematic for me as well. My agent said to me, "Well they say there are plans to do it". I said, "Anyone can say anything". What matters is what is in writing."

Another ex: Condo docs say units are to be built with 3 bedrooms, living, kitchen, rec room etc. City records say 3 bedrooms. MLS Listing has 4 bedrooms. Funny how that rec room turned into a legal bedroom. There is a sink, a toilet and a very tiny pantry thingy I guess they call a closet. This rec room is not even on the same floor as the main living level. Rec room on 1st. Main condo on 3rd. Yes it's awkward. Other owners rent it out for $800/mth as an efficiency.
Still listing it as 4 bedrooms when the 4th bedroom is 2 levels removed from the condo seems a little sketchy to me.

 

[haha]

sheehs- I am not familiar with EFIS, but I think the 4 unit condo is in itself a risky idea. I promised myself to buy in a minmum 80 unit building. Most of these right here are very nice and very well managed, but I could not find one in my price range so I went with a 10 unit building. The units are all owned by reasonable young to middle aged people (well, I am only charitably middle aged, and there is one other retiree.) Even though they are fine people, and even the renters are top drawer, it is hard to get them to spend money for things that I know from experience as a homeowner will bite us one day. Part of the problem is the retiree, an excellent man, but living essentially on SS and a very small pension. Though he could not sink projects alone, people are mindful of his needs.

@calmloki-I referred to it as lying, but I actually see it more as guarding my cards. Anyway, if I can't lie to car dealers and Realtors, I will lose my hard won skills.


Ha

 

[photoguy]

Actually, there has been studies that a realtor would rather sell your house than sell it at the best price. It was in the book "Freakonomics" written by Stephen Dubner and Steven Levitt.

It basically comes down to the fact that and extra $10k selling a house usually nets the selling realtor about $125 (5% commission split between selling and buying agency and each agency splits 50% with realtor, so on a 5% commision the selling broker makes (5%/4) or 1.25%*$10k=$125)

A selling realtor would rather have you take an offer today for $10k less, than have to work for longer for $125.

+1

The real estate agent's incentives are certainly not aligned with their clients.

 

[sheehs1]

sheehs- I am not familiar with EFIS, but I think the 4 unit condo is in itself a risky idea. I promised myself to buy in a minmum 80 unit building. Most of these right here are very nice and very well managed, but I could not find one in my price range so I went with a 10 unit building. The units are all owned by reasonable young to middle aged people (well, I am only charitably middle aged, and there is one other retiree.) Even though they are fine people, and even the renters are top drawer, it is hard to get them to spend money for things that I know from experience as a homeowner will bite us one day. Part of the problem is the retiree, an excellent man, but living essentially on SS and a very small pension. Though he could not sink projects alone, people are mindful of his needs.

@calmloki-If I can't lie to car dealers and Realtors, I will lose my hard won skills.


Ha

Thanks Ha. I definitely agree and can see where fewer owners might actually create some uncomfortable circumstances.

The exterior of the building needs a total redo. The condo unit itself is an estate sale as the person passed away. All flooring needs to be torn out and replaced, windows are suspect..etc. Which is why my offer reflected the price of those items. It has huge potential 2,600 square feet on one level all bay water front windows. But if the exterior is going to continue to be a negative...I'm not interested. I don't want to argue with people to keep the property up.

Also something I have not seen before was the extra $295 Broker Fee "presumably because of their requirement to keep records for 3 years and the cost of providing identity theft procedures". What The Brokerage already gets part of the commission. Just more creative charges to get more......

 

[growing_older]

Every single real estate transaction I have been involved in has involved this kind of chicanery by agents or worse, except for one agent. Once that happened, all further transactions have gone to her, as well as anyone I know that I could make a recommendation to. I dred eventually moving out of the area and having to deal with the usual agent ethics again.

 

[sheehs1]

Even though I had a buying agent, my agent kept asking me to put in an offer, no matter how low (and it was low). If anything, this made us delay putting in our offer. It seems like you let the "other offer" idea push you to make a higher offer. I would argue that upping your offer doesn't make it any more serious that any other number you chose. ANY offer is serious when it comes to real estate. I wouldn't let anyone pressure you into changing the offer you originally intended. After all, this is probably the most expensive purchase you'll make in your lifetime.

Dimsumkid...you are right. I did and shouldn't have. As I was pissed off, it was in the back of my mind. Since I knew I would go at least that high I went ahead and went that high, knowing it was going to be a thumbs up/thumbs down decision. But it left me no wiggle room. Meaning I was not going higher than that.

Hopefully it is a mute point as I don't think we are interested any longer.

 

[sheehs1]

Every single real estate transaction I have been involved in has involved this kind of chicanery by agents or worse, except for one agent. Once that happened, all further transactions have gone to her, as well as anyone I know that I could make a recommendation to. I dred eventually moving out of the area and having to deal with the usual agent ethics again.

I understand that. It is a real pressure cooker. I have come to detest the process so much that as soon as the first attempt at this stuff happens I want out.
I have only experienced these things at resort areas. Buying my home 20 years ago was a breeze compared to these recent experiences.

 

[UserRequested]

Always do your research on historical sales results in the area you are interested in. Compare sales prices for houses of similar size and quality in the recent past. That should give you an indication of the price you should be paying and make your offer accordingly.

If seller does not accept your price, then walk away. Paying more than the market price for a house you like is only for those for whom money is not an issue.

 

[Badger]

My first thought was that this kind of game playing by some realtors could have had an influence on jacking prices up and helping (maybe in just a small way) the housing bubble we've recently been through. If so then I don't have much sympathy for them having a difficult time earning a living once it burst.

I have only purchased 2 houses. Interestingly enough both were part of an estate. The first was bought through a closed bid. I had been left vacant for over a year. The property was overgrown and the house was in need of a lot of work. Even though I had the highest bid the lawyers kept slow timing for months after. It turned out that they had someone that they wanted to get the house but had a lower bid and hoped I would cancel if they made me wait long enough (stinking lawyers). It was to be my first house (a fixer upper but all I could afford). I was just out of grad school with only a few dollars in my pocket and no experience in the ways of the world but I was pi$$ed. Eventually I made enough noise that they backed off from their game and I got the house.

Five years later I found a house a few blocks away that had been vacant for a year or more and also needed a great deal of work. This time it worked out much better. I contacted the realtor that listed the house. I told her I would also list my house with her, she could sell it for what ever she could get, then using the money from the sale I would buy the other house but I would not pay a penny more than $X in addition to the money from the first house. Good deal for her. She would get 2 full commisions and only had to make one sale on a home that was fixed up and less expensive - great incentive. My cards were on the table and there would be no deviations. She arranged for an open house the next week and 3 days later it was sold.

Sometimes things work out. Over the years I've learned to think a plan through first then make it understood (but in a nice way) that I stand my ground. I also don't take a smile from a stranger to mean I may not be threatened in some way. People are the only animals that will twist the meaning of a smile.

Cheers!

 

[sheehs1]

Always do your research on historical sales results in the area you are interested in. Compare sales prices for houses of similar size and quality in the recent past. That should give you an indication of the price you should be paying and make your offer accordingly.

If seller does not accept your price, then walk away. Paying more than the market price for a house you like is only for those for whom money is not an issue.

Thanks jags. I always do this and am typically all over the assessor's data bases for value history, assessments and recorded sales as well as listing sites like realtor.com for what is on the market and for what price. I also make calls to assessor's offices in the two locations I have looked at. I do my best to try to come to a price I am willing to pay rather than the list price. In some cases it is close to list and in others it's not.
For this one, I was initially going to offer $100k less than list because of the condition. I knew what the building value was based on assessment and deducted from the side of the fence.
2,900 sq feet including the rec room for all floors as they really are nasty, future facade replacement, appliances and kitchen cabinets (they painted them and have made a mess of them), windows (couldn't get handles back in), external door doesn't shut...etc. It adds up. Thinking I might have been a bit high of this I went up by half.
Sales in the area definitely justify the price but the condition is off-putting. Still, I saw potential and can't beat what looks like 30 plus linear feet of direct bay views.
I'll reassess today after getting some sleep...and slowing the process down.

 

[pb4uski]

Many real estate agents are liars and snakes who are principally out for themselves. Just keep this in mind in dealing with them.

We had one guy who made the hard sell to list our home pitching how what he did was unique and how he had buyers in the wings. We didn't list with him but decided to do FSBO. Later the buyer of our house, who needed to sell her house did list with him (the guy was a friend of her ex). What we observed is that the guy just chased a lot of listings, sold very few himself but just waited for other agents to sell his listings so he could collect 1/2 a commission. A real snake.

P.S. Her house never sold - not even an offer - so our sale to her fell through.

 

[sheehs1]

My first thought was that this kind of game playing by some realtors could have had an influence on jacking prices up and helping (maybe in just a small way) the housing bubble we've recently been through. If so then I don't have much sympathy for them having a difficult time earning a living once it burst.
Sometimes things work out. Over the years I've learned to think a plan through first then make it understood (but in a nice way) that I stand my ground. I also don't take a smile from a stranger to mean I may not be threatened in some way. People are the only animals that will twist the meaning of a smile.

Cheers!

I think everyone from real estate agents to appraisers to banks had a hand in that financial crisis, not to mention our government, the SEC and the GSA's (Freddie Mac, Fannie Mae). There was ton of money coming into the U.S. and it had to find a place to land. 55 trillion in CDO's (collateralized debt obligations/derivatives) in a shadow banking system that was unregulated so I'm still not sure it is over. Ridiculous bubble. Real estate barely appreciated from 1990's thru 2002ish. The run up was fast and furious and some sellers feel they are entitled to still capture that mass appreciation. Ive seen some sad stories as I'm sure we all have. People buying at the height of the market only to get nailed and underwater by several hundreds of thousands of dollars in these resort areas.

People are the only animals that are ABLE to turn a smile into a twist.

 

[sheehs1]

Many real estate agents are liars and snakes who are principally out for themselves. Just keep this in mind in dealing with them.

We had one guy who made the hard sell to list our home pitching how what he did was unique and how he had buyers in the wings. We didn't list with him but decided to do FSBO. Later the buyer of our house, who needed to sell her house did list with him (the guy was a friend of her ex). What we observed is that the guy just chased a lot of listings, sold very few himself but just waited for other agents to sell his listings so he could collect 1/2 a commission. A real snake.

That is indeed one way they do it.

I have yet to be able to "see" the elevator in this building because as my agent said, the list agent didn't want to bother. Ive asked several questions and am told, "she doesn't know, go check the condo docs". (it is not in the condo docs).

Speaks a little to what you just said. She has the listing and presumably doesn't care who buys it. It means the same money to her either way. Working harder to answer questions doesn't make her any more money.

p.s. The elevation inspection certificate and my being able to ride on it was a contingency.

 

[kcowan]

The way to make money in RE is to get a lot of listings and wait for them to sell.

When buying, if anyone talks about another offer, I say I will not compete. So far so good. Often the other offers just vaporize. If not, great.

 

[pb4uski]

.....When buying, if anyone talks about another offer, I say I will not compete. So far so good. Often the other offers just vaporize. If not, great.

I've always assumed that the "other" offer is b.s. and made an offer based on what I am willing to pay and told the agent that is my offer, if the other offer is better then the seller should take it.

 

[Brat]

I have seen some real disasters caused by EFIS (which is fake stucco). To replace it is very expensive and with only 4 owners in the condo development the odds of getting all to agree to do it are slim. EFIS failure usually causes mold. My husband says that EFIS can work but owners need to maintain the drain system that was installed (or not installed as can happen). Unfortunately many owners think that siding maintenance is only a matter of paint. They don't even maintain caulking (which has an effective lifespan of only a few years).

If its EFIS, walk.