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RE (real estate) question
Old 08-29-2006, 06:19 PM   #1
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RE (real estate) question

Hi,

I have found a house that I might like to buy. I spoke with the listing agent and when I told her I was considering making an offer, she said that the seller had received and accepted another offer but the other offer had a contingency of that buyer selling their current home. The seller's acceptance was conditioned on the seller being able to continue to market the property. She said that the other buyer has had their property on the market for about 60 days now.

When I looked at the home a few days ago there was no "sale pending" on top of the for sale sign as is typical around here, and interestingly enough it looks like the current owner might be camping out in the home (airmattress on the floor in the master bedroom and a few shirts in the closet). But I can't recall if the for sale sign was even in the yard. The house is still listed on the realtor's website as "for sale" and not "sale pending" as a few other listings are.

Any comments or guesses out there on whether the agent is trying to snow me or make me hurry up or offer more? Any way to find this out (I have a friend who is a realtor who might be willing to make a call or two for me, but he would also be interested in getting a commission on my sale.)?

2Cor521
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Re: RE (real estate) question
Old 08-29-2006, 11:14 PM   #2
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Re: RE (real estate) question

The seller pays the realtor costs.
Doesnt hurt to make an offer.
I wouldnt go up, theres always another house. Espeecially in this market
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Re: RE (real estate) question
Old 08-29-2006, 11:45 PM   #3
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Re: RE (real estate) question

A realtor is not going to place a sale pending sign unless they are pretty sure it will close because then they look like idiots when it comes off if the sale doesn't close.
They would be more likely to do that if the other house was at least under contract.

The realtor should have told you if the house was actually tied up for a certain period of time or if the first purchaser would have to remove the contingency if another acceptable offer was made.

If you want the house I would make a reasonable offer based on comparable recent sales in the area taking note of any trends up or down. If your offer is only a backup on the first make sure you're not on the hook for any extended time unless you're positive you want that house or you could lose your earnest money if you decide you can't wait.

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Re: RE (real estate) question
Old 08-30-2006, 09:50 AM   #4
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Re: RE (real estate) question

If you do not have a similar contingincy (selling) I would make an offer. Otherwise you're wasting your time ... regardless of whether the realtor is lieing (the buyer selling is always a sellers concern).

Not needing to sell will put you way ahead of the other offer. A house on the market for 60 days could take MONTHS to close. Your offer will quickly trump thiers even if a lower $$ is offered.

Good luck!
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Re: RE (real estate) question
Old 08-30-2006, 10:59 AM   #5
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Re: RE (real estate) question

Thanks for all the replies.

spideyrdpd: I have several limitations, including a particular school district, number of bedrooms, and price. That somewhat limits my options. My real decision, as I've come to realize after reading everyone's comments, is whether to buy this one or take a pass and wait to see if anything else comes on the market. I guess I don't want to kick myself if, in the future, a better house does (or doesn't) come along. Unfortunately, my crystal ball is cloudy.

honobob: I drove back by again last night and the sign is still in the yard but there is no "sale pending" tag on it. The first purchaser has 24 hours to remove their contingency if I make an offer that the seller accepts. Typically in my area buyers make offers expire after a few days, so if they didn't accept my offer I'd be OK on the earnest money.

tryan: I don't have a similar contingency, and I agree with your analysis. I can make a very clean offer that would trump the other offer in every respect, but then the question becomes how much lower can I offer $-wise and still have them accept. It would be helpful to know what the other offer was but I don't think I have any way of finding that out.

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Re: RE (real estate) question
Old 08-30-2006, 11:03 AM   #6
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Re: RE (real estate) question

Q: How do you tell if a real estate agent or other salesperson is lying ?
A: They are lying when their lips are moving


Real estate agents don't place a sold sign on a house cause they want you to call them. Then they can sell you another house.
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Re: RE (real estate) question
Old 08-30-2006, 11:09 AM   #7
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Re: RE (real estate) question

Have you already looked at the listing in the MLS?* *Most MLS systems will show a different status for active, subject to inspection, contingent, pending, sold, and expired.
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Re: RE (real estate) question
Old 08-30-2006, 11:49 AM   #8
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Re: RE (real estate) question

Don't be afraid to make an offer - even lots lower than the asking price. In this market, sellers are hungry and no sale contingency, short escrow, accepting as is, can trump full price offers.

Concerning the sign, I had a realtor get mad at me because I removed their sign after the sale had closed.
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Re: RE (real estate) question
Old 08-30-2006, 11:57 AM   #9
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Re: RE (real estate) question

If you are not already, consider having your offer represented by a realtor from a competiting office. There will be no additional cost to you and you get the leverage of an "insider" in the transaction. Just be sure you qualify the realtor who represents you.
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Re: RE (real estate) question
Old 08-30-2006, 04:04 PM   #10
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Re: RE (real estate) question

Quote:
Originally Posted by nwsteve
If you are not already, consider having your offer represented by a realtor from a competiting office. There will be no additional cost to you and you get the leverage of an "insider" in the transaction. Just be sure you qualify the realtor who represents you.
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I don't see the logic in this as both realtors are working for and getting paid by the seller.* If you retain a buyers agent you may get some expert advise as why this property is a good or a bad buy but they should not have any "insider" information on the first transaction.* The downside is that the commission is split 4 ways.* The listing office and agent would be more willing to kick in part of the commission to close a gap between your offer and their sellers accepting amount if all the commission comes into the office.

Quote:
Originally Posted by riskaverse
Don't be afraid to make an offer - even lots lower than the asking price. In this market, sellers are hungry and no sale contingency, short escrow, accepting as is, can trump full price offers.
Asking price can be anything.* Any offer should be based on a Comparative Market* Analysis that should be provided by any realtor involved.* If you really want this house I would not make an offer more than 10% less that that value unless the market is very unstable or the house is so unique that it is hard to value.

Lowball offers can be considered a real insult and a professional realtor will refuse to present them unless their client says bring all offers.* The realtor should have an idea of how desperate their client is because they will already be willing to pick up a bargain or have a regular client they can turn on to the deal IF their client get into a fix.

Disclaimer:* I sold real property while in college and law school and most of my portfolio is in real estate.* AND I believe in real estate karma.
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Re: RE (real estate) question
Old 08-30-2006, 04:13 PM   #11
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Re: RE (real estate) question

Quote:
Originally Posted by honobob
Lowball offers can be considered a real insult and a professional realtor will refuse to present them unless their client says bring all offers.* The realtor should have an idea of how desperate their client is because they will already be willing to pick up a bargain or have a regular client they can turn on to the deal IF their client get into a fix.
Reason #273 why I don't like using a realtor.

EVERY offer is a real offer, whether it's insulting or not, and worthy of a counteroffer. A truly professional realtor would educate the seller on their "insult" issues. Of course a smart realtor would try to avoid an emotional seller in the first place, but I'm not sure that such a customer exists.

One of our best buyers came at the wrong time of the week, by appointment, at a terrible time of the day, spent only five minutes walking through, and barely said a word to us. If we were prone to feeling insulted then we would've missed out on a full-price cash offer with no contingencies, a 30-day closing with no complaints or surprises, and a very generous leaseback. We also would've missed a 15-year friendship...
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Re: RE (real estate) question
Old 08-30-2006, 04:29 PM   #12
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Re: RE (real estate) question

I will not be using a realtor in this case. I think CMA's are relatively worthless most of the time around here. But that is because in my area there are a large number of incompetent realtors and there really is a pretty broad range of what is considered "fair". I think a real estate appraiser is a better way to go but the market and process around here is rigged against getting one before making an offer.

Since the house has been on the market for several months and I wouldn't be bringing a realtor to the table to take a cut, I am thinking about 10% less and the rest of the offer very clean and standard.

2Cor521
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Re: RE (real estate) question
Old 08-30-2006, 05:15 PM   #13
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Re: RE (real estate) question

Quote:
Originally Posted by SecondCor521

Since the house has been on the market for several months and I wouldn't be bringing a realtor to the table to take a cut, I am thinking about 10% less and the rest of the offer very clean and standard.

2Cor521
Are you saying you are waiting until the listing expires and approaching the seller directly?* Good luck with that, especially getting them to drop the price by the amount of the commission.* Also, if the realtor showed you the house they could sue the owner for the commission and screw your deal. If you are buying while it is listed then you* are using a realtor, you're just not availing yourself of any free (to you) service they could provide.* Are you saying that you are ready to make an offer based on an asking price that you have no idea how it was arrived at without seeing the inside of the house?* For all you know the original offer could be at 20% off asking because asking price can be anything.*

CMA's are not rocket science.* Three of the most recent comparable sales nearby.* A little analysis making adjustments for differences.* Should have a narrow $ per sq. ft. range. If you're buying in the neighborhood you should be familiar with the comps so if a realtor is trying to do a fast one you would be in the position to say "hey we were in that house and know it is inferior or superior to the one you're trying to sell".* With all the info on the web you could probably come up with a pretty accurate value on your own.


Secondcor521* I'm only basing my opinion on information you've provided and trying to be informative.* Take it for what it's worth to you.
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Re: RE (real estate) question
Old 08-31-2006, 10:47 AM   #14
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Re: RE (real estate) question

honobob,

No, I am not saying that I would wait for the listing to expire. All I mean is that I am not using a buyer's agent or having my own agent. Basically I don't think it is worth it to have an agent represent me for the 3% cut they would take. I would expect the seller to be willing to drop the price by the 3% they're not paying to my non-existent buyer's agent. The additional 7% would be a combination of (1) the house has been on the market for several months, (2) the usual situation around here of not offering full price, and (3) the market is slowing in this area.

The "free (to you) service they could provide" isn't free. Someone is paying that 3%, and if it's not me or the two realtors, it's got to be the seller. See above.

I've seen the inside of the house twice. I've lived in the general area for a decade and that specific part of town for three years, so I know the area, I know the market, and I believe I know what is a fair price. I've looked at the inside of a dozen other houses on the market and the outside of at least two dozen more. I've done $/sqft on all those and have a good idea of price.

Overall, thanks for your response -- I came here asking for advice and input, and you sound like you know what you're talking about, and that's exactly what I was hoping for. I hope the above has cleared up the situation more.

2Cor521
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Re: RE (real estate) question
Old 08-31-2006, 11:09 AM   #15
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Re: RE (real estate) question

Been a while since I had a RE and Brokers license but here goes:

1. If the salesperson is a REALTOR they MUST present ALL Offers to the Owners (looking stupid or being insulting is not a consideration). Failure to present one has more potential harmful impact for the salesperson. If the other contact falls apart on its own and he/she did not present yours he/she may have to buy the place themselves to starve off the potential lawsuit by either the owners or yourself.
2. Contingent contracts generally ALWAYS have a "Kick Out Clause" whereby the first contract offeror is given time (usually 24-72 hours) to remove the contingency and continue to closing.
3. Generally signs and talk mean nothing in RE -- "if it ain't in writing" it does not exist.

So I say, if you like the property, make the offer and DO NOT be influenced by the first offer since, if they cannot remove the contigency, thier contact is valueless.
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Re: RE (real estate) question
Old 08-31-2006, 11:15 AM   #16
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Re: RE (real estate) question

Quote:
Originally Posted by Old Army Guy
sing.
3. Generally signs and talk mean nothing in RE -- "if it ain't in writing" it does not exist.
That hits it right on the nose!
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Re: RE (real estate) question
Old 08-31-2006, 11:15 AM   #17
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Re: RE (real estate) question

Quote:
Since the house has been on the market for several months and I wouldn't be bringing a realtor to the table to take a cut, I am thinking about 10% less and the rest of the offer very clean and standard.
10% less is too high for a house on the market "several months". *Take 20% off - at a minimum.
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Re: RE (real estate) question
Old 08-31-2006, 12:13 PM   #18
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Re: RE (real estate) question

tryan,

Thanks for the encouragement. I will consider it!

2Cor521
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Re: RE (real estate) question
Old 08-31-2006, 12:34 PM   #19
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Re: RE (real estate) question

A "low ball" offer in my book is 66% of asking price or less. 20% below asking will simply get the ball rolling.

DISCLAIMER: I've offered - and received - low ball offers for property (one bank accepted a low ball offer for an REO; no others were accepted).
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Re: RE (real estate) question
Old 08-31-2006, 02:21 PM   #20
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Re: RE (real estate) question

Quote:
Originally Posted by tryan
10% less is too high for a house on the market "several months". *Take 20% off - at a minimum.
Are you serious? I the past 30 days, I have indirectly made two offers at 5% below asking price for two separate lots in different areas, both were declined!
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