Negotiating a House Using Seller's Agent (opinions wanted)

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MindBogler
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by MindBogler » Sun Jun 18, 2017 6:33 pm

athan wrote:Should I give the seller's agent a heads up we are thinking of getting our own agent, since he has already shown us the house twice and spent time with us looking at a few other houses? Of course we have not signed anything with him, but I feel like he deserves a call first.
I believe you are under no obligation to the seller's agent unless you signed a contract with him/her. The seller's agent has a conflict of interest in representing you, anyway. I would run as fast as possible from this agent.
avalpert wrote:Well sure, if the seller is trying to set today's price based on anchoring bias rooted in what he paid in the past, regardless of what the market is willing to pay today, then he may never find a buyer. That doesn't mean the OP needs to play to the same anchoring bias.
Knowing the seller's state of mind is now "playing to anchoring bias?" I'm afraid your line of reasoning has jumped the shark. :shock:

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by Mudpuppy » Sun Jun 18, 2017 8:22 pm

MindBogler wrote:
athan wrote:Should I give the seller's agent a heads up we are thinking of getting our own agent, since he has already shown us the house twice and spent time with us looking at a few other houses? Of course we have not signed anything with him, but I feel like he deserves a call first.
I believe you are under no obligation to the seller's agent unless you signed a contract with him/her. The seller's agent has a conflict of interest in representing you, anyway. I would run as fast as possible from this agent.
This is incorrect in some states, where asking the agent to show a few other properties is akin to a verbal contract with the agent to be the OP's buyer's agent. Also, in some states, when the offer was submitted on the house, the OP may have signed a statement noting the agent as the OP's buyer's agent as part of the offer paperwork. That would be enforceable as a buyer's agent contract on that specific house.

So the OP is only in the clear if the OP switches to a new buyer's agent and ends up buying a house that the original agent did not show the OP. Buying this specific house with another buyer's agent could be opening up a huge can of worms in some states.

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dodecahedron
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by dodecahedron » Sun Jun 18, 2017 8:40 pm

MindBogler wrote:
athan wrote:Should I give the seller's agent a heads up we are thinking of getting our own agent, since he has already shown us the house twice and spent time with us looking at a few other houses? Of course we have not signed anything with him, but I feel like he deserves a call first.
I believe you are under no obligation to the seller's agent unless you signed a contract with him/her. The seller's agent has a conflict of interest in representing you, anyway. I would run as fast as possible from this agent.
The one who is under an obligation to the seller's agent is the SELLER, not the OP. The seller is obligated to pay the entire amount of commission he agreed to pay if the sale goes through.

If the OP had originally come in with a buyer's agent, then standard real estate practice would be for the seller's agent to agree to share his commission with the buyer's agent.

However, it is not clear to me that the seller's agent has any obligation to share his commission on this property with an agent the buyer (the OP) chooses to bring in at this point. How the OP chooses to engage and compensate a buyer's agent to purchase this particular property might be the OP's problem at this point. State laws may differ from place to place and note that there will generally be brokers as well as agents on each side, who generally also expect to get a piece of the commission. https://www.thebalance.com/how-do-buyer ... id-1798872

JGoneRiding
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by JGoneRiding » Sun Jun 18, 2017 9:54 pm

Smorgasbord wrote:Factoring in the agent's commission, the seller is probably just about getting what they paid for the house back in 2012 with a $393 sale price...not that that has anything to do with the current value of the house. Sometimes, it just takes time for sellers to accept that they are going to lose money on a real estate transaction. If you like the house, but are in no hurry, wait until September to put in another offer.
This. And they may or may not be in a hurry to sale. Our sellers took a long time to except that their person family situation of wanting to sale wasn't going to magically raise the price. And they would have to take a loss or hold longer. We were in no hurry and went back and forth over several months (house on market 18 months total) 5 weeks is nothing in normal areas just wait and offer again. But if you really want this house wait for their counter.

I have had sellers say they need to think and come back 2 weeks later, in slow markets that isnt unusual.

denovo
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by denovo » Mon Jun 19, 2017 5:17 am

avalpert wrote:
MindBogler wrote:
avalpert wrote:Not in your original response, you said that the 'sellar has a price' and that 'is the market price'.
Indeed I did and I stand corrected.

I stand by my original reasoning, though, even if I failed to properly convey it. Without additional knowledge of the property or area, the seller's "ballpark" asking price does seem reasonable. If the house was overpriced in 2012 that changes things but I've already said that. The OP needs to explain why he/she feels the seller should accept a loss.
The OP doesn't need to explain anything in relation to the owner prior purchase price - that anchor is wholly irrelevant to the price today.
Wholly agree here, reminded me of the tenant who tried to negotiate rent by arguing that it was purchased 20 years ago and tried to argue that I should give it to him for less because my expenses were low.

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LiveSimple
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by LiveSimple » Mon Jun 19, 2017 7:00 am

Just make your assessment on the price to pay, add $15,000 ( On $300 - $400 K homes ) then make the offer and move on.
Make 5% more than, what you think the home is worth and put the offer.

As a buyer you want the lowest possible price, as the seller, they want the highest possible price, so that +5% really helps.

Doug E. Dee
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by Doug E. Dee » Mon Jun 19, 2017 7:17 am

Market Price- The price at which both the buyer and seller agree.

But more important, an item is only worth what another person is willing to pay. Let's say I have a 20 year old snow blower that I think is worth $1000 because I've taken care of it and know is in good shape. If my best offer is only $300, then that is all it's worth on the open market.

If this house isn't getting any offers, that suggests it's over-priced. It may take some time for reality to set in for the sellers.

MathWizard
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by MathWizard » Mon Jun 19, 2017 7:31 am

Continue to look. Do not lock into a specific house.

The owners asked you for another offer.

I bid on a house and the owners rejected my offer and did not
counter. 6 months passed and the agent asked said that the owners wanted to know if I'd bid again. I offered the same amount, though prevaling mortgage interest rates had gone up in the meantime, so payments would be higher at the same price.
They countered and I stood firm and got my price.

They asked you for a bid, why did they expect any higher than before? You were nice to offer more, and they get pissed?
Tell them you'll walk away, they are playing mind games.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by stan1 » Mon Jun 19, 2017 8:11 am

I think OP is playing this right. Houses that are overpriced to begin with take a long time to sell and often I think end up selling for a little less than if they had been priced in line with the market to begin with. People who live in a seller's market where houses often get multiple offers in a few days have forgotten how the process works in buyer's market or even a normal market. The seller is frustrated because the house isn't worth what they've put into it. They'll eventually find a fool to buy it (not many of those), rent it, foreclose/short sale, or sell at a bigger loss than they hoped for.

Since you used the sellers realtor you you've signed an offer, probably a dual agency agreement, and possibly other paperwork. Make sure you read that. A few realtors are starting to have buyers sign paperwork that says they will pay the commission if the seller does not.

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Watty
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by Watty » Mon Jun 19, 2017 8:41 am

Since you are not in any hurry to buy just wait until September to see if they will sell it at the price you want. In the meantime you can keep looking for a different house.

One factor that I have not seen mentioned is that the most expensive house in a neighborhood typically is had to get a full price for since the rest of the neighborhood pulls down the selling price. That is why it is an often a good idea to own the least expensive house in the neighborhood.

Many housing markets are very slow or dead in the fall and winter so they could be a lot more motivated to sell in the fall if they are looking at not being able to sell it until next spring. I bought my first house in November from someone that had it listed all summer without it selling so they were then ready to sell it for a very good price.

With a couple the spouses with different ideas of what is should sell for so there are also their family dynamics involved which you can do nothing about.

One option that the seller has is to just rent the house if they can't sell it for the price they want so they could very well decide to do that instead of selling the house for a low price.

There may be things going on that you don't know about like they have home equity loans for the improvements that mean that they are underwater if they sell it for a low price and would need to bring money to closing. They may very not be able to sell it at a real low price.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by neverrun » Mon Jun 19, 2017 9:16 am

You seem to assume that the buyer and seller are on equal footing. I think that is hardly the case.
You are right, it is hardly the case - but I think you have it backwards who has the advantage. The buyer has another place to live and doesn't have to move, the seller is moving his family out of state. If the seller were in a position to get any price they wanted, let alone the one they initially asked for, they wouldn't have had to drop the listing price at all - and they would have other offers coming in.[/quote]

I just want to point out this "could" be a bad assumption. As others mentioned we don't know all of the buyers situation.

I'm going to use myself as a current antidotal story to say why this is possibly wrong. My employer is transferring me, I "need" to move by 9/17. My house has been on the market for 2 weeks now at approximately the same price as this example just over $400,000 I feel I am reasonably priced for the market. I've received an offer that was just below where I would accept, I countered and the buyer wasn't interested, I said thank you have a nice day. I might drop my price down by $5,000 soon I need to actually talk to my agent about that today.

But this does not signal I'm desperate to sell. I have an employer guaranteed buyout. I am happy with the buyout and the only way I can do better is to basically get an offer above asking price. However, my employer does give a small bonus if I can sell my place to an outside buyer for within a certain price of the buyout offer, meaning I can take an offer within x% of my buyout and I receive the buyout offer not the lower sales price plus a bonus. It's a win for everyone, I get more, my company has to pay less to the relocation company, my buyer gets a lower price, my Real Estate agent gets his commission, and the Relo company doesn't get my house in it's inventory. If I had a mutual friend like yours I "might" reach out to see if something could be done to add in the buyer gets the house they want if they can meet my minimum but that doesn't mean I want a new offer I won't accept.

2cents2
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by 2cents2 » Mon Jun 19, 2017 10:39 am

I think the OP and the seller are too far apart to come to an agreement. If it were me, I would continue to look for another house that met my requirements and not get emotionally tied to a house that might be overpriced. If it is a buyers market, then there should be plenty of inventory from which to choose.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by ERISA Stone » Mon Jun 19, 2017 10:45 am

Without knowing your market, if the seller paid $355k in 2012 and completely finished the basement (assuming 1000+ sqft), I don't think their price is unreasonable. Having said that, if you don't want to pay their price, I think you are being reasonable from your viewpoint either. Just don't expect them so see everything from where you're standing. It doesn't sound like you are doing this. This is a pretty easy "market value" discussion.
Last edited by ERISA Stone on Mon Jun 19, 2017 10:51 am, edited 1 time in total.

JGoneRiding
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by JGoneRiding » Mon Jun 19, 2017 10:48 am

What is the rental market like?? The seller may flat not be able to afford to sale at the price you are asking (depending on how much they put down) They may also be trying to get their agent to cut some back to them (not unusual if they end up getting both sides of the commission) They may have a plan to just rent it out for a year if it doesn't sale at the price point they need, you just don't know.

dave_k
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by dave_k » Mon Jun 19, 2017 11:44 am

In this situation I don't think you need a buyer's agent. We bought our current house using only the seller's agent, and an attorney for the paperwork. We made a lower offer that was countered halfway, but we held firm and one of our arguments was that since we didn't have a buyer's agent taking 3%, the seller's agent could opt not to take the full 6% since they were only expecting 3% to begin with, and help make up the difference. We got it for what we offered. Granted it was only about 5% under asking, not the 9% gap that still remains in your case, but they had also already come down from an even higher original asking price.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by pinecone » Mon Jun 19, 2017 12:15 pm

athan wrote:
rebellovw wrote:Out of curiosity - what is the zestimate for the house?

$388,000

Also -what was the avg house price for that area when they bought the house - and what is that average now?
$187,000 when bought
$196,000 now
It sounds like the sellers way over-built their house for the neighborhood. When someone does that, their house will never appreciate at the same rate as others in the neighborhood. No wonder they're not getting any offers.

I would never buy the best house in a neighborhood, esp in a neighborhood where the average price of homes was significantly lower than mine = bad investment.

I always try to buy the cheapest house in the best neighborhood and then renovate to the point it will be within range for that neighborhood. That's why they always say "The 3 most important things to consider when buying real estate are location, location, and location."

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by TropikThunder » Mon Jun 19, 2017 12:51 pm

BW1985 wrote:
hand wrote:Use the seller's agent against them...

Speak with the seller's agent and offer to list your current property with them if you close the deal for the new house.
Up your offer by $5k so the seller's agent has something positive to talk about.

Watch and enjoy as the "seller's" agent convince the sellers that your offer is a great deal because it is now significantly in the seller's agent's best interest that you buy the house at any price.
This is good. May not work though because the sellers just might not accept their house is with less than they thought/hoped it was.
Hopefully, it won't work because this would be fraudulent. This would put the seller's agent in a conflict of interest situation all of their own, because they would be receiving a benefit (from the buyer) without the seller's knowledge in return for advocating a lower price to the seller. Their legal obligation is to the seller. It's essentially a bribe.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by crit » Mon Jun 19, 2017 1:03 pm

If the seller's agent really, truly wants to get the deal done, he/she will offer part of their commission to reduce the price of the house, especially if he/she is playing dual agent. It doesn't seem like you're close enough, at least yet, but that could help you close the gap.

I agree with the 'wait it out' side here. The correct price is what the market is willing to bear. They may have overpaid in 2012, and they certainly can't "bill" you for their improvements; neither of those matters to what the market is willing to bear, now. You don't want to overpay and be in the same place they are in 5 years, either.

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hand
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by hand » Mon Jun 19, 2017 2:58 pm

TropikThunder wrote:
BW1985 wrote:
hand wrote:Use the seller's agent against them...

Speak with the seller's agent and offer to list your current property with them if you close the deal for the new house.
Up your offer by $5k so the seller's agent has something positive to talk about.

Watch and enjoy as the "seller's" agent convince the sellers that your offer is a great deal because it is now significantly in the seller's agent's best interest that you buy the house at any price.
This is good. May not work though because the sellers just might not accept their house is with less than they thought/hoped it was.
Hopefully, it won't work because this would be fraudulent. This would put the seller's agent in a conflict of interest situation all of their own, because they would be receiving a benefit (from the buyer) without the seller's knowledge in return for advocating a lower price to the seller. Their legal obligation is to the seller. It's essentially a bribe.
I highly doubt that the realtor would engage in any action that is demonstrably fraudulent. Most likely they would leverage the potential of an offer to convince the seller formally agree to dual representation and the conflicts inherent.

While I agree this is an area rife with the potential for ethical misbehaviour on the part of the Realtor (who is likely to push for a lower sales price than they would otherwise), the buyer is simply being savvy enough to put themselves in a position to benefit from the discontinuity between what realtors say they do and what they actually do. If realtors were more honest about their focus on closing the deal and capturing a commission instead of pretending that they worked solely in the best interests of their clients, there would be fewer unknowledgeable sellers and less discontinuity to exploit.

One would hope for a purely ethical realtor who put clients ahead of commissions, but it is incredibly naïve to act as if all players (especially salespeople) adhere to the highest of ethical standards. The beauty of this proposed approach is that it there is no cost to the OP unless there are results, no downside if the realtor is in fact ethical, and if there are ethical lapses they are solely on the part of the Realtor, but benefit the buyer who has done nothing other than make two legitimate business deals.

Personally I hope this approach doesn't work, but bet that it will at least move the needle in the buyer's favour.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Mon Jun 19, 2017 3:42 pm

stan1 wrote:I think OP is playing this right. Houses that are overpriced to begin with take a long time to sell and often I think end up selling for a little less than if they had been priced in line with the market to begin with. People who live in a seller's market where houses often get multiple offers in a few days have forgotten how the process works in buyer's market or even a normal market. The seller is frustrated because the house isn't worth what they've put into it. They'll eventually find a fool to buy it (not many of those), rent it, foreclose/short sale, or sell at a bigger loss than they hoped for.

Since you used the sellers realtor you you've signed an offer, probably a dual agency agreement, and possibly other paperwork. Make sure you read that. A few realtors are starting to have buyers sign paperwork that says they will pay the commission if the seller does not.
OP Here...I have no signed contract with any real estate agent. Just a verbal bid on this house.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by TropikThunder » Mon Jun 19, 2017 3:59 pm

hand wrote:
TropikThunder wrote: This is good. May not work though because the sellers just might not accept their house is with less than they thought/hoped it was.
Hopefully, it won't work because this would be fraudulent. This would put the seller's agent in a conflict of interest situation all of their own, because they would be receiving a benefit (from the buyer) without the seller's knowledge in return for advocating a lower price to the seller. Their legal obligation is to the seller. It's essentially a bribe.
I highly doubt that the realtor would engage in any action that is demonstrably fraudulent. Most likely they would leverage the potential of an offer to convince the seller formally agree to dual representation and the conflicts inherent.

While I agree this is an area rife with the potential for ethical misbehaviour on the part of the Realtor (who is likely to push for a lower sales price than they would otherwise), the buyer is simply being savvy enough to put themselves in a position to benefit from the discontinuity between what realtors say they do and what they actually do. If realtors were more honest about their focus on closing the deal and capturing a commission instead of pretending that they worked solely in the best interests of their clients, there would be fewer unknowledgeable sellers and less discontinuity to exploit.

One would hope for a purely ethical realtor who put clients ahead of commissions, but it is incredibly naïve to act as if all players (especially salespeople) adhere to the highest of ethical standards. The beauty of this proposed approach is that it there is no cost to the OP unless there are results, no downside if the realtor is in fact ethical, and if there are ethical lapses they are solely on the part of the Realtor, but benefit the buyer who has done nothing other than make two legitimate business deals.

Personally I hope this approach doesn't work, but bet that it will at least move the needle in the buyer's favour.[/quote]
I think we agree more than disagree here. You are correct in that the OP as the buyer would not be doing anything illegal, and I agree in general about the ethical standards of salespeople.
athan wrote: OP Here...I have no signed contract with any real estate agent. Just a verbal bid on this house.
Is this common? Verbal offers (or acceptances) aren't binding.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by TropikThunder » Mon Jun 19, 2017 4:01 pm

hand wrote: I highly doubt that the realtor would engage in any action that is demonstrably fraudulent. Most likely they would leverage the potential of an offer to convince the seller formally agree to dual representation and the conflicts inherent.

While I agree this is an area rife with the potential for ethical misbehaviour on the part of the Realtor (who is likely to push for a lower sales price than they would otherwise), the buyer is simply being savvy enough to put themselves in a position to benefit from the discontinuity between what realtors say they do and what they actually do. If realtors were more honest about their focus on closing the deal and capturing a commission instead of pretending that they worked solely in the best interests of their clients, there would be fewer unknowledgeable sellers and less discontinuity to exploit.

One would hope for a purely ethical realtor who put clients ahead of commissions, but it is incredibly naïve to act as if all players (especially salespeople) adhere to the highest of ethical standards. The beauty of this proposed approach is that it there is no cost to the OP unless there are results, no downside if the realtor is in fact ethical, and if there are ethical lapses they are solely on the part of the Realtor, but benefit the buyer who has done nothing other than make two legitimate business deals.

Personally I hope this approach doesn't work, but bet that it will at least move the needle in the buyer's favour.
I think we agree more than disagree here. You are correct in that the OP as the buyer would not be doing anything illegal, and I agree in general about the ethical standards of salespeople.
athan wrote: OP Here...I have no signed contract with any real estate agent. Just a verbal bid on this house.
Is this common? Verbal offers (or acceptances) aren't binding, and as a seller I wouldn't accept one (then again I live in a *hot* market).

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by DaftInvestor » Mon Jun 19, 2017 4:28 pm

Using here-say through a mutual friend and then drawing conclusions on what the seller wants (to sell directly to you) isn't doing you any good. Of course any seller would rather sell direct once an agent find him a buyer - but so what? That's usually illegal and certainly always immoral. The agent (or lack there of) is up to the seller to decide on in any case.

If you feel the agent could be doing more to bring the deal together simply tell him that. If you feel it is over-priced and feel the last offer you gave was your best offer and what you felt fair - tell the agent that. If you feel you can get a better property for the same price - move on.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by 8foot7 » Mon Jun 19, 2017 4:33 pm

DaftInvestor wrote:Using here-say through a mutual friend and then drawing conclusions on what the seller wants (to sell directly to you) isn't doing you any good. Of course any seller would rather sell direct once an agent find him a buyer - but so what? That's usually illegal and certainly always immoral. The agent (or lack there of) is up to the seller to decide on in any case.

If you feel the agent could be doing more to bring the deal together simply tell him that. If you feel it is over-priced and feel the last offer you gave was your best offer and what you felt fair - tell the agent that. If you feel you can get a better property for the same price - move on.
^This. You had to know offering $355k on a $410k list had a low chance of happening. You and seller are still very far apart and your second offer raised by a few thou and had an appliance grab. Whether or not you are right or seller is right about market value, it's clear you are not meant to be in this house right now. If you are as dispassionate about this house as you claim, then simply move on and find another place and let the seller's house be the seller's problem.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by livesoft » Mon Jun 19, 2017 4:39 pm

If one had their own buyer's agent, then one can ask the buyer's agent to find out more about the Seller's agent. For instance,

For all homes sold or listed by the Seller's Agent in past 2 years:
original asking price
time on the market before sale or delisting
intermediate mark downs
final sales price

Such info might give one insight on how the Seller's agent advises clients (both buyers and sellers)
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by 8foot7 » Mon Jun 19, 2017 4:47 pm

There are two factors in the real estate market: price and time to sell. Price is self explanatory. Time to sell, or cumulative days on market, is an important factor. One must understand the average and median days on market for a neighborhood or community, whether one is a buyer or seller, in order to fairly evaluate whether a price on a home is high, low, or just right. It may well be that houses in OP's desired location sell in an average of 120 days at 5% under list price, in which case one can understand why sellers would reject OP's lowball-to-them offers after just 35ish days. Sellers may want to beat a longer cumulative days on market figure by setting an aggressive price, but that's up to seller. But those in this thread who are saying the house is definitively overpriced because it has sat for 5 weeks after 2 offers well below list price are incorrect in asserting that fact unless they have an understanding of how long houses sit on the market in that one particular area.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Wed Jun 28, 2017 6:42 pm

An update for anyone interested...

The sellers offered a counter price last night of $385,000.
Our last offer was $362,000.
They want to close by the first week of August so they can move to Florida.
The ball is now in our court, and we are thinking of offering $370,000 final offer.

Also, the agent has dropped commission to 4%. Agent also said he is concerned the house will not appraise at the future selling price, which could kill the deal.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by livesoft » Wed Jun 28, 2017 10:00 pm

I'd offer $362K again. Just because they counteroffer lower does not mean that a negotiation splits the difference.
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Wed Jun 28, 2017 10:08 pm

livesoft wrote:I'd offer $362K again. Just because they counteroffer lower does not mean that a negotiation splits the difference.
I would be willing to do this, but my wife really wants the house at this point. I'm willing to go up to $375,000 to buy this house, so I think we are there. To me there is not much difference between $362,000 and $375,000 over the course of a 15 year mortgage. I'm just hoping mortgage rates go down in the next month.

livesoft
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by livesoft » Thu Jun 29, 2017 6:17 am

Add a bank appraisal / loan contingency to your offer.
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Doug E. Dee
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by Doug E. Dee » Thu Jun 29, 2017 7:36 am

livesoft wrote:Add a bank appraisal / loan contingency to your offer.
Good point, maybe it will appraise at $350 :)

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by Lafder » Thu Jun 29, 2017 7:50 am

If you are willing to pay 370, go ahead and counter with that.

They paid 355 plus possibly spent more than 15k finishing the basement. So they are attached to the amount they have in the house, even if it has little impact on current market value.

I think the best price would mean you are both happy enough. And yes the appraisal contingency as well as an inspection contingency on the offer are important.

They may not agree to the 370k, but it is closer to the asking price and the difference in cost between 370 and your current offer won't matter 10 years from now.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by bluebolt » Thu Jun 29, 2017 7:52 am

athan wrote:
livesoft wrote:I'd offer $362K again. Just because they counteroffer lower does not mean that a negotiation splits the difference.
I would be willing to do this, but my wife really wants the house at this point. I'm willing to go up to $375,000 to buy this house, so I think we are there. To me there is not much difference between $362,000 and $375,000 over the course of a 15 year mortgage. I'm just hoping mortgage rates go down in the next month.
Right. What's more important, saving $8K or getting the house? At this point, sounds like the latter based on your wife, so I would do just what you are doing.

If you want to nearly guarantee the deal, you should offer $375K if you are already willing to pay it. Here's why:
Seller offered $385K counter to your $362K. $373.5K is in the middle. If you counter with just slightly more than that at $375K, seller will believe he won the negotiation and accept. He will also likely accept $370K, but might feel he "lost" the negotiation and not accept it.

If you did end up losing the house over $5K, you (and your wife) would probably be more upset than the scenario where you overpay by $5K and get the house.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by mrc » Thu Jun 29, 2017 7:57 am

athan wrote:... but my wife really wants the house at this point.
That changes things, eh?
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by MindBogler » Thu Jun 29, 2017 8:46 am

livesoft wrote:Add a bank appraisal / loan contingency to your offer.
Always!

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by livesoft » Thu Jun 29, 2017 8:56 am

And choose an appraiser who will come in low in order to give you negotiating leverage.
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by researcher » Thu Jun 29, 2017 9:08 am

athan wrote:I'm willing to go up to $375,000 to buy this house, so I think we are there. To me there is not much difference between $362,000 and $375,000 over the course of a 15 year mortgage.
Then why aren't you making an offer for $375K?
You already acknowledge that there is not much difference between these offers.

This is what, the third round of negotiation? The previous two failed and you pissed off the sellers the last time.
Time to stop the BS and offer $375K, which is still $10K lower than the latest counter.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by BW1985 » Thu Jun 29, 2017 9:46 am

livesoft wrote:And choose an appraiser who will come in low in order to give you negotiating leverage.
I thought the lender chooses the appraiser? When I purchased my home the lender arranged for the appraisal, paid for it directly then added it into the closing fees.
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by livesoft » Thu Jun 29, 2017 9:52 am

BW1985 wrote:
livesoft wrote:And choose an appraiser who will come in low in order to give you negotiating leverage.
I thought the lender chooses the appraiser? When I purchased my home the lender arranged for the appraisal, paid for it directly then added it into the closing fees.
So what? You can ask the lender to give you an appeaser who will come in low.
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by deltaneutral83 » Thu Jun 29, 2017 10:01 am

I have never considered the seller's feelings or their costs or anything else that happened in the past when making an offer on real estate. I couldn't care any less that the sellers paid $355k in 2012 and put $15k in it for a $370 BE (which isn't even true once they pay the realtor). They already got smoked compared to the the national average if they get $390k or less, tough break. The fact that the seller has relayed to you that "they want to move to Florida by August" is moronic on their part if true. If untrue, well, that's just strange. RE is one of those things where you want to cross your "t's" and dot your "i's". The synthetic drama of this situation is comical to me though.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Thu Jun 29, 2017 10:57 am

bluebolt wrote:
athan wrote:
livesoft wrote:I'd offer $362K again. Just because they counteroffer lower does not mean that a negotiation splits the difference.
I would be willing to do this, but my wife really wants the house at this point. I'm willing to go up to $375,000 to buy this house, so I think we are there. To me there is not much difference between $362,000 and $375,000 over the course of a 15 year mortgage. I'm just hoping mortgage rates go down in the next month.
Right. What's more important, saving $8K or getting the house? At this point, sounds like the latter based on your wife, so I would do just what you are doing.

If you want to nearly guarantee the deal, you should offer $375K if you are already willing to pay it. Here's why:
Seller offered $385K counter to your $362K. $373.5K is in the middle. If you counter with just slightly more than that at $375K, seller will believe he won the negotiation and accept. He will also likely accept $370K, but might feel he "lost" the negotiation and not accept it.

If you did end up losing the house over $5K, you (and your wife) would probably be more upset than the scenario where you overpay by $5K and get the house.
I like your line of thinking here with offering $375. My wife and I are thinking the best course maybe to offer $370 for the house, and $3,000 for the basement furniture and exercise equipment. That way they feel like we met them in the middle, and it is less money overall toward the house appraisal.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by livesoft » Thu Jun 29, 2017 11:37 am

deltaneutral83 wrote:I have never considered the seller's feelings or their costs or anything else that happened in the past when making an offer on real estate. [...] The synthetic drama of this situation is comical to me though.
This is so true, but it is fun to sort of negotiate vicariously through the social media that is bogleheads.
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by hookemhorns » Thu Jun 29, 2017 12:10 pm

Sounds like the seller has unrealistic expectations and possibly isn't listening to the advice of their realtor. Not much you can do about that. The offer/counter behavior so far suggests their price expectation is still quite far from yours, or apparently what anybody else will pay.

My family had a similar story last year. My parents have a vacation property and tried to buy the neighbor's house preforeclosure with frankly a generous offer (way more than I would have offered). The neighbor kept holding out for a ridiculous price and ultimately the bank did foreclose upon them and they got nothing. Can't fix stupid. :oops:

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by deltaneutral83 » Thu Jun 29, 2017 12:49 pm

livesoft wrote:
deltaneutral83 wrote:I have never considered the seller's feelings or their costs or anything else that happened in the past when making an offer on real estate. [...] The synthetic drama of this situation is comical to me though.
This is so true, but it is fun to sort of negotiate vicariously through the social media that is bogleheads.
Leverage is leverage. When I have it, I use it, when I don't, I acknowledge that I don't, and make as unemotional decision as I can and move on. I never understand buyers who feel so much pressure. Yes moving twice in 12 months is a pain, but you can always rent and put more time on your side. Of course when you have a spouse breathing down your neck that makes things much more difficult.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Thu Jun 29, 2017 1:02 pm

deltaneutral83 wrote:
livesoft wrote:
deltaneutral83 wrote:I have never considered the seller's feelings or their costs or anything else that happened in the past when making an offer on real estate. [...] The synthetic drama of this situation is comical to me though.
This is so true, but it is fun to sort of negotiate vicariously through the social media that is bogleheads.
Leverage is leverage. When I have it, I use it, when I don't, I acknowledge that I don't, and make as unemotional decision as I can and move on. I never understand buyers who feel so much pressure. Yes moving twice in 12 months is a pain, but you can always rent and put more time on your side. Of course when you have a spouse breathing down your neck that makes things much more difficult.
I don't feel pressure, other than from my wife. I would be happy staying in our townhouse for a few more years, since I can walk to work currently. My wife would have been happy paying $385 for the house over a month ago. I guess the boglehead philosophy is embedded in some of us.

On the other hand, I think that most people do not understand the boglehead philosophy of using leverage to save a little bit of money. Especially when $15,000 will not cause us to use PMI, or even switch from a 15 year to 30 year mortgage. Most people would probably say, "If you want the house, just spend a little more to make sure you get it."

Patience is a difficult emotion to control when dealing with a property you love (or in my case your spouse loves).

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by livesoft » Thu Jun 29, 2017 1:12 pm

We used a buyer's agent to help with our home purchase. Even so, I always told her I hate the house I was buying. After the closing, she asked me, "I'm not sure why you bought this house that you don't like very much at all. Do you like it now?"
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Fri Jun 30, 2017 6:32 am

Ok...we agreed on a price with the seller. We settled at $370,000 plus $4,000 for theater room furniture and washer/dryer. We are also letting them stay until September 1st, so 1 month rent free. Not a big deal.

I feel like we overpaid by about 5 grand, but I'm sure the seller feels the same way, if not worse. I guess that is the sign of a good deal.

Now the fun begins with pre-approval for a mortgage. I am leaning towards an online company called Garden State Home Loans. Rates are low and online reviews are great. 15 year fixed term.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by amarone » Fri Jun 30, 2017 10:33 am

livesoft wrote:We used a buyer's agent to help with our home purchase. Even so, I always told her I hate the house I was buying. After the closing, she asked me, "I'm not sure why you bought this house that you don't like very much at all. Do you like it now?"
We recently sold our home and the buyer's agent forwarded an email from her client stating they "fell in love with the house" to our agent, who promptly forwarded it to us. Now who had the emotional upper hand in negotiations?

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by crit » Sat Jul 01, 2017 8:17 am

If my realtor forwarded my email to the seller's realtor without my express permission, my next stop would be a lawyer.

Doubtlessly that realtor made you sign papers, and those papers said something about fiduciary responsibility. To you.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by hand » Mon Jul 03, 2017 8:23 am

crit wrote:If my realtor forwarded my email to the seller's realtor without my express permission, my next stop would be a lawyer.

Doubtlessly that realtor made you sign papers, and those papers said something about fiduciary responsibility. To you.
While I love the sentiment, this I believe is the crux of the "fiduciary responsibility" fallacy. This duty seems to be unenforceable and therefore legally non-existent.

1) We all know that sharing negotiating information is unethical, but how do you prove losses as the basis of a lawsuit?
2) How does one determine whether closing the deal is of more or less fiduciary importance than getting the lowest price? If closing the deal is of primary fiduciary importance, then almost any behaviour to undermine you and close the deal meets the fiduciary standard!

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