OT: Any realtors here?

[temery]

I am buying a house and hate the negotiating games. With that in mind - as a %, what is the average accepted off compared to asking price? 5%, 10%, ... 15%

I know it varies, but what would an average be?

 

[Scot-e]

I am an ex-developer and I can tell you that it never hurts to ask for a discount. There is no standard. If the Buyer asked for something too low I just refused to respond to the offer- ask for as mush as you feel you can get away with and they will come back to you with something. It is s a huge purchase (as you know) and a little negotiating can go a long way- don't fear it-embrace it.

 

[husky99]

Funny you ask, bought a house today.. well they signed off on our bid.. thing is we paid more then asking. Two other bids... ourr agent said 96you to 97%the of asking is what people want. But that is all up to the town

I am buying a house and hate the negotiating games. With that in mind - as a %, what is the average accepted off compared to asking price? 5%, 10%, ... 15%

I know it varies, but what would an average be?

 

[Dann]

Funny you ask, bought a house today.. well they signed off on our bid.. ****ty thing is we paid more then asking. Two other bids... ourr agent said 96you to 97%the of asking is what people want. But that is all up to the town

how quickly will the uconn flag be put up over the front door? congrats on the purchase!

 

[Dann]

I am buying a house and hate the negotiating games. With that in mind - as a %, what is the average accepted off compared to asking price? 5%, 10%, ... 15%

I know it varies, but what would an average be?

still up in the springfield area tom? i used a relator (rented a house from him actually) for 3 of my years up there off campus. want me to see if hes still doing it?

 

[husky99]

Thanks, process sucks. Day one the flag will fly

how quickly will the uconn flag be put up over the front door? congrats on the purchase!

 

[husky99]

I am buying a house and hate the negotiating games. With that in mind - as a %, what is the average accepted off compared to asking price? 5%, 10%, ... 15%

I know it varies, but what would an average be?

Tom, zillow rocks. Tells a ton of info. Like how long it was really on the market and if they had it last year also on the market. Also tell you what they payed for it, plus tax history..probably already know all this

 

[Dove]

Lots of factors set that initial offer...

Hoes the house need work?
How old are the guts? (furnace, roof, septic system etc...)
How close are the neybas?
How big is the lot?
How's the curb appeal?
How long has it been on the market and how many offers have come in? The less the better.

10 to 15% off asking should be the average entry point.

 

[B1GEast]

My wife and I are agents on the side, real estate for the most part has become very micro, as they say location, location, location is very true. In some very desirable spots, you can still see multiple offer situations, but even then, bids are not too far above listing prices.

I would not rely too much on zillow or some of the other so called real estate sites as the information on properties are not always accurate, read the fine print on these websites, they indicate that it's up to the property owners to confirm that the information is accurate.

The problem with pricing is that there can be so many bank owned and short sale houses on the market that they negatively affecting market analysis and there's just no way around that, price is one thing, value is another and value become very instrinsic

Tom, I will email you my thoughts on pricing as I don't want to get into specifics on a forum,

 

[dogpause]

For Tom, or anyone looking for a mortgage, call me at 860.940.9262.

 

[dapriest]

Here are some random thoughts for you (I've bought many houses over the years and been involved in others).

1. Unless you know the real estate agent personally, and trust them personally, then I would treat them at arms length. Remember that they get paid by the seller, and they don't get paid unless the deal goes down. Because of that arrangement, they have a severe conflict of interest - I always advise people that real estate agents "work for the deal." Essentially it's the seller and the two agents working to get you to buy the place. Are there honest real estate agents out there who will warn you away from bad properties, advise that you offer less, thereby risking the deal, hire an inspector who is likely to turn up deal-killing issues? There might be. I haven't bumped into any. Assume that everything you tell them about your actual max bid and so on will be immediately conveyed to the other agent.

2. The housing market is horrible. There are millions of shadow inventory homes that do not show up in official stats. These are houses that are owned by banks that aren't reflected in market saturation numbers. You, as a qualified buyer, are holding most of the cards. Remember that.

3. If you are in a rush or if you are set on a single house, that significantly lowers your ability to get a great deal.

4. I'd say starting at 20% under asking wouldn't be outrageous - they could always counter offer - 95% of people won't be so offended that they wouldn't consider a second, higher offer. In this economy, I'd stay away from any home that has multiple bids on it. Why get in a bidding war when the market is this wide open for buyers?

5. Remember that selling agents will often schedule showings that overlap to give the illusion of demand. I had that happen once. A house had been on the market for 3 months. I go to look at it. Another buyer is just leaving. Lame. If you feel panicy, or if you make a panic bid, you lose. I'd recommend against making any offer that you haven't sat on for a day.

6. Don't pay for a bank appraisal until after you do your home inspection. Agents and bankers will push for you to get the appraisal "ASAP" after a signed deal is in place. Why? All that does is commit more of your money. Once you pop down the 400 for an appraisal, it's a sunk cost and if it turns out that the inspection turns up a deal killer, you're out the appraisal money on a house you never bought.

7. YOU pick the inspector. Do some research and find a completely independent inspector. DO NOT use one suggested by either agent, as agents generally pick inspectors who will green light a house. You want somebody to flag everything, no somebody who is going to ignore issues to make sure that the deal goes through.

8. We're in a very poor economy. Banks are not lending. Unoccupied houses are sitting vacant. You can score a great deal on a house, but you have to be patient, and not be set on one house. It's like the person who starts the conversation with a car dealer with, "I have to have a red car." EEEEEEEEE. Not good.

9. Put as little down as possible. Generally, the real estate contracts used by NAR folks are garbage and give you the right to get out for silly little reasons. They're essentially drafted to protect the NAR agents and the deal. They don't want litigation, so they draft the things so that buyers can walk away for little or no reason, thereby freeing up the house for sale and allowing the buyer to leave with his money to go buy another house.

Good luck. You can get a great deal on a house - do your research, don't be in a hurry, and remember that it's a very bear market.

 

[Adesmar123]

nice post...dapriest

 

[husky99]

Dapriest very good post. Agents are not your friend even if it your aunt or brother.. they want to be paid and will say what you want to hear... some to many agents are slimy and late on their car payment ... never never use their home inspector ..

Here are some random thoughts for you (I've bought many houses over the years and been involved in others).

1. Unless you know the real estate agent personally, and trust them personally, then I would treat them at arms length. Remember that they get paid by the seller, and they don't get paid unless the deal goes down. Because of that arrangement, they have a severe conflict of interest - I always advise people that real estate agents "work for the deal." Essentially it's the seller and the two agents working to get you to buy the place. Are there honest real estate agents out there who will warn you away from bad properties, advise that you offer less, thereby risking the deal, hire an inspector who is likely to turn up deal-killing issues? There might be. I haven't bumped into any. Assume that everything you tell them about your actual max bid and so on will be immediately conveyed to the other agent

 

[husky99]

Also do not get emotional connected to any home you are interested in. There always can be issues (roaf or foundation

 

[BlueMAB]

Don't forget you have up to 72 hours (possibly more) AFTER signing your mortgage to back out with no additional penalty.

The percentage off the asking price you offer depends, IMO, largely on how long the house has been on the market.

Ask the agent for the property history. Not just the current listing, but all listings, because the Days On Market will only show up for the current listings. It's very common for houses to be on the market for 6 months, expire, relisted under a different listing number, two to three times. I've seen sales that "closed" within 30 days. But in researching the history, they were actually on the market for over 2 years. Also, don't just look at the Days On Market, check the date it was listed. A property can be listed for a week, "withdrawn" for 6 months, while the sign sits out front and the agent potentially continues to market it, then listed again for a week. The DOM will show 14 days, rather than 6.5 months.

the longer it's been on the market, the lower my offer would be.

 

[B1GEast]

Here are some random thoughts for you (I've bought many houses over the years and been involved in others).

This post is totally absurd.

1. Unless you know the real estate agent personally, and trust them personally, then I would treat them at arms length. Remember that they get paid by the seller, and they don't get paid unless the deal goes down. Because of that arrangement, they have a severe conflict of interest - I always advise people that real estate agents "work for the deal." Essentially it's the seller and the two agents working to get you to buy the place. Are there honest real estate agents out there who will warn you away from bad properties, advise that you offer less, thereby risking the deal, hire an inspector who is likely to turn up deal-killing issues? There might be. I haven't bumped into any. Assume that everything you tell them about your actual max bid and so on will be immediately conveyed to the other agent.

Real estate agents build their business on referrals, there is absolutely no reason for an agent not to work for their clients best interest, this is absurd.

2. The housing market is horrible. There are millions of shadow inventory homes that do not show up in official stats. These are houses that are owned by banks that aren't reflected in market saturation numbers. (Bank owned properties are counted in market data.) You, as a qualified buyer, are holding most of the cards. Remember that.

This really depends on what price range you are in, on the lower end there are a lot of houses on the market (quantity), there are not as many quality houses on the market on the lower end as owners are holding out on selling until market conditions improve. If you are looking in the higher end there is good value to be found.

3. If you are in a rush or if you are set on a single house, that significantly lowers your ability to get a great deal.

What does get a great deal mean? Most people buying now are getting great deals, there are motivated sellers out there

4. I'd say starting at 20% under asking wouldn't be outrageous - they could always counter offer - 95% of people won't be so offended that they wouldn't consider a second, higher offer. In this economy, I'd stay away from any home that has multiple bids on it. Why get in a bidding war when the market is this wide open for buyers?

Pricing is not based on a certain percent, it's based on what comparble properties recently sold and what the current state of the market is, basing it an 10, 15 or 20 percent mey be too high, it may actually be 30 percent.

5. Remember that selling agents will often schedule showings that overlap to give the illusion of demand. I had that happen once. A house had been on the market for 3 months. I go to look at it. Another buyer is just leaving. Lame. If you feel panicy, or if you make a panic bid, you lose. I'd recommend against making any offer that you haven't sat on for a day.

What agent has this much time, "illussions of demand" really? If the property is nice then there will be a lot of action on it, if the buyer wants to keep looking, then they may miss out.

6. Don't pay for a bank appraisal until after you do your home inspection. Agents and bankers will push for you to get the appraisal "ASAP" after a signed deal is in place. Why? All that does is commit more of your money. Once you pop down the 400 for an appraisal, it's a sunk cost and if it turns out that the inspection turns up a deal killer, you're out the appraisal money on a house you never bought.

Appraisals are done to determine if the price of the property appropriate, if you agree to pay X amount, the bank wants to make sure it's actually worth what you want to pay, basically it's a way for the bank to protect it's investment.

7. YOU pick the inspector. Do some research and find a completely independent inspector. DO NOT use one suggested by either agent, as agents generally pick inspectors who will green light a house. You want somebody to flag everything, no somebody who is going to ignore issues to make sure that the deal goes through.

The bank selects the appraiser to ensure the transaction is at arms length.

8. We're in a very poor economy. Banks are not lending. Unoccupied houses are sitting vacant. You can score a great deal on a house, but you have to be patient, and not be set on one house. It's like the person who starts the conversation with a car dealer with, "I have to have a red car." EEEEEEEEE. Not good.

It's not that banks don't want to lend, it's that underwriting requirements are more strict, banks hire agents to sell their REO assets.

9. Put as little down as possible. Generally, the real estate contracts used by NAR folks are garbage and give you the right to get out for silly little reasons. They're essentially drafted to protect the NAR agents and the deal. They don't want litigation, so they draft the things so that buyers can walk away for little or no reason, thereby freeing up the house for sale and allowing the buyer to leave with his money to go buy another house.

Again, this is I don't understand the logic here. If you can put as little as you can, that's always good, but underwriting standards now more than ever require qualified buyer to put more money down, if you qualify for FHA or CHFA they can help with down payment assistance.

Good luck. You can get a great deal on a house - do your research, don't be in a hurry, and remember that it's a very bear market.

Again, there is a big difference between Price and Value, you pay for what you get./quote]

 

[BlueMAB]

BEC-
I agree, some of that post is absurd, but I think you misunderstood other parts.

When he talks about inspectors, he's talking about Home Inspectors, not appraisers (I think). Many appraisers are hired by AMC's not rather than the banks. Thank Dodd-Frank for that, and the increased costs that it brought with it.

When he said put as little down as possible, I think he meant in terms of a deposit, not money down on the purchase, but I could be wrong.

I also couldn't agree more on Zillow. Horrible website.

 

[gibhunter]

What's wrong with zillow? It lets you know when the house last sold, what the property taxes are, what are comparable ball park values of houses in the area. I think it's a great supplemental tool to use with a typical real estate website that just shows you property info without taxes, length on the market and the date of last sale. Yeah, sometimes the prices may be off, but usually they are fairly close to market value.

 

[dapriest]

Real estate agents build their business on referrals, there is absolutely no reason for an agent not to work for their clients best interest, this is absurd.

Absolutely no reason? You said you're an agent, right? A buying agent doesn't get paid unless his client buys a house. The amount of time and energy that a buying agent must expend to get paid increases with each house he/she shows his client. Ergo, the buying agent has a tremendous conflict of interest. Same is true of a selling agent - the higher the starting price, the more time and effort is required to get paid. First house I sold the local agent in CT told me to put it on the market for 145. We had paid 125ish a few years before. Hot market, several upgrades. I told him to list it at 170 or pound sand. He said OK. We sold it for 165 four weeks later. Of course, at 145 I'm sure it would have sold in a week.
If you don't understand that conflict of interest, then I direct you to Upton Sinclair - "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"
The 6% commission paid by the Seller, split 3% to both the Buying Agent and the Selling Agent, is a relic that needs to be buried in the back yard. S O.O. N

 

[suzyq]

I think the problem with Zillow is is "disconnectedness". It's all done electronically. So if you own a trailer in a neghborhood of mansions it's likely to be "valued" higher on zillow. It's very erratic..

It's silly to tell someone to stay emotionally detached from a home purchase ( a car very often too ), as it's the biggest investment you'll ever make, and a "home" is all about emotion. Congrats to those who are able to only see sheetrock and 2x4's but most of us purchase a home based on attraction which is without a doubt emotional. If you know you"love" a house then you just need to take a step back in the negotiations.

Never get into a bidding war unless it's 1990 and there are no homes to be found. We were looking for a home about 5 years ago. We fell in love ( oh that damned emotion!) with a house that was probably a bit overpriced and offered slightly less than asking price. A day later the realtor calls with the info that someone else has made an offer and to " make your last best offer". We said "that IS our last best offer". The other couple "won" , and bought the house. It is currently on the market for 58K less than they paid and a deal at that price just fell through.

In this market it's a bit of a crapshoot, but the buyer who isn't stuck with a house to sell is in control.

 

[husky99]

Suzyq, i get it, of course there is emotion. What i was getting at was two months ago we got into negotiations for my house withwas a buyer. There was a house my wife loved( really really loved) it went under contract the morning we thought the buyer was going to except our last offer. My wife was heart broken. The deal did not happen because of bank issues on the buyers side. Houses come and go on this market, but my wife had all her eggs in a basket before it was a done deal...

 

[B1GEast]

Absolutely no reason? You said you're an agent, right? A buying agent doesn't get paid unless his client buys a house. The amount of time and energy that a buying agent must expend to get paid increases with each house he/she shows his client. Ergo, the buying agent has a tremendous conflict of interest. Same is true of a selling agent - the higher the starting price, the more time and effort is required to get paid.

It's all relative, you have clients that are buying and clients that are selling, there's an ebb and flow to real estate, just like any commission based endevour. I don't know why you have such difficulty grasping that.

First house I sold the local agent in CT told me to put it on the market for 145. We had paid 125ish a few years before. Hot market, several upgrades. I told him to list it at 170 or pound sand. He said OK. We sold it for 165 four weeks later. Of course, at 145 I'm sure it would have sold in a week.

Big deal, so now you're the expert.

If you don't understand that conflict of interest, then I direct you to Upton Sinclair - "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

There's no conflict of interest, no one forces the client to sign the agreement, there are people that buy and sell houses without the use of a realtor, so your quote by Sinclair doesn't apply, sorry.

The 6% commission paid by the Seller, split 3% to both the Buying Agent and the Selling Agent, is a relic that needs to be buried in the back yard. S O.O. N

Most transactions today are at a 5% level, again, people have the ability to go there own way.

 

[8893]

Hmmm...I've been through the house buying and selling rodeo a few times and I thought dapriest had some pretty valid suggestions and observations.

I do agree with Suzy that, for most people, emotion inevitably plays a big part, just as it does in any decision that is based on attraction. The thing to remember is that there is always another house. We had at least three "dream house" deals fall through at various stages--including two that cratered while under contract--and, like Suzy, we've gone on to see that it was very much for the best (for us) in each instance.

I totally agree never to trust any real estate agent. I've known more than I can count, have used several, and many are very good friends. None of them ever did anything whatsoever of value for us in the process when we were buyers. Count on doing all your own leg work, including finding your own houses. Think of them merely as a necessary part of the process that you will need to provide you access to the listings you want to view. Sign up only for a limited representation for the day that you view the house that they have listed.

Zillow is really flawed. It is useful for whatever facts it reports, but its estimates of value are worthless imo.

 

[husky99]

Hmmm...I've been through the house buying and selling rodeo a few times and I thought dapriest had some pretty valid suggestions and observations.


Zillow is really flawed. It is useful for whatever facts it reports, but its estimates of value are worthless imo.

the Zestimate is a joke......but tax history, Price History, and Maps and Views helped us big time. sure is all the info 100% correct, no. but does help on finding what houses sold in the area, when and what price.....

 

[Robertelamin]

I bought my first house last year. Real estate agent was awesome but the bank was awful. One of the most frustrating things ever. Good luck Tom.

 

[Robertelamin]

And it was USAA which is probably the best financial company you could possibly deal with....

 

[Hoophound]

And it was USAA which is probably the best financial company you could possibly deal with....

Next time call dogpause.

 

[jleves]

If only there were sites on the Interwebs that you could check to see if people had good or bad experiences with agents and lenders.

We bought a house about a year and a half ago - just about the perfect time as I understand that many houses in this area (socal) are starting to get multiple offers and it's pretty common to go above listing price now.

For the record, we didn't get a normal agent - we used redfin.com which turned out to be a great way for us to buy. While the company get the commission, the agents are salary based so it's in their best interest to find you what you want fast as opposed to finding you things that may benefit them for other reasons than helping you find what you want. Now, I'm not so deluded to think they don't get bonuses on sales but for the most part, it's a good model to work from. We also got back close to 2% of their commission back in closing costs so we really only paid about 4% overall. It cannot hurt you to check them out.

We found a great lender through the redfin site and rechecked with yelp and google. They were as fantastic as their reviews said they would be. It's really not hard to check these things.

 

[Hoophound]

Hmmm...I've been through the house buying and selling rodeo a few times and I thought dapriest had some pretty valid suggestions and observations.

I do agree with Suzy that, for most people, emotion inevitably plays a big part, just as it does in any decision that is based on attraction. The thing to remember is that there is always another house. We had at least three "dream house" deals fall through at various stages--including two that cratered while under contract--and, like Suzy, we've gone on to see that it was very much for the best (for us) in each instance.

I totally agree never to trust any real estate agent. I've known more than I can count, have used several, and many are very good friends. None of them ever did anything whatsoever of value for us in the process when we were buyers. Count on doing all your own leg work, including finding your own houses. Think of them merely as a necessary part of the process that you will need to provide you access to the listings you want to view. Sign up only for a limited representation for the day that you view the house that they have listed.

Zillow is really flawed. It is useful for whatever facts it reports, but its estimates of value are worthless imo.

Wow. Either you guys have had bad Realtors or you totally underestimate the job. I hope it is the first. I have spent years as a very high volume broker and I buy and sell property in other states regularly. I find, use and appreciate the input of an agent in nearly every transaction I do. Local knowledge is imperative. I even bring agents in on deals that I don't need them for just to hear their opinion. You should call and talk to several agents before dealing with one. When you find the right one you will know it. They will put you at ease and say things of value. Keep dialing until you find that person. I know agents with MBAs, law degrees, even degrees in medicine. The field is full of soccer moms and slime balls but it is also loaded with true professionals. Find one.

 

[Dove]

So, Tom. Whacha thinkin'? Great stuff here.

I strongly recommend a complete home inspection and if you are looking at a well do not go without a flow test. We had a selling agent ignore our concerns when the flow test yielded a well going dry after 30 minutes and a recharge that was awful. We brought in a well company for $200 and they left with raised eye brows and shaking their heads. We dodged a bullet there as we were almost closing on that one.