First off, I don’t want to imply that all RE agents are crooked etc. Lawyers and stock brokers get picked on, but most are honest. I don’t know that any RE agents are crooked.
But perhaps because I have toured so many houses and considered offers more than the average # of times, I have seen a few “outliers.” Most of my friends who buy houses tour 2, 3, or even 4 and buy one. They don’t tour hundreds. Both my agents have told me I am “not” the average buyer. The average buyer does not tour over 100 homes before they buy. I am the same with cars and women. That is just me.
The first time I bought a house 7 yrs ago, I toured 60+ homes and made 17 written offers in a major seller’s market. Towards the end, before I bought my house, I had an experience that opened my eyes to the problem with my assumption that all selling and buying agents play fair and honestly.
I wanted to put in a bid on a house I liked. The selling agent was not very nice nor cooperative, but we, and over a dozen other people, put in our bids. I did not get the house. After the sale, my agent found out that the selling agent also represented the buyer. Now it was a closed/blind/sealed bidding situation, or whatever it is called, so we did not know how to place our bid to ensure that we got it. But of course the selling agent knew everybody’s bid. So one buyer had an agent who knew everybody else’s bid and the other dozen or so folks were playing blind. When escrow closed the house sold for exactly $50k more than my own bid. Go figure.
To show you how green I was as a first time buyer, and ignorant/clueless, the house I bought was staged. I did not realize that. I had never heard of staging before. Staging really works people. Look at me.
Anyway, that “dual agency relationship” opened my eyes to my ignorance and assumptions on fair play. So this time around, I started a little more mindful that things I or my agent are being told by selling agents may be not quite true. Whether we call it negotiation tactics or dishonesty does not matter. As SDR says “so what.” I am informed enough now to be looking out for such things. I think particulalry in a market like this, where RE agents need to pay their own mortgages, there is more pressure to sell and do whatever it takes to generate interest. My view is that the ways these agents I described went about it had the opposite impact they desired.
SDR. It is not that I am being emotional by walking away if I detect any other third party interest and are not willing to get into a bidding war. In this market, I don’t have to. In fact, this time, I have taken my emotions out of the equation. I have written my “10 commandments of home buying” and no matter how much I love a house, I am sticking to them. That way, I don’t get caught up in my own blind emotions and think rationally in an emotional situation with the help of a rule book.
The first time I bought, every house had multiple bids and if you did not write an above asking non-contingency cash offer with 3 months free rent back from the get go, you were out of luck. This was early 2000 in the bay area. In some markets, like Los Altos (which I gave up on back then), many homes had 30 bids and a few were selling for twice asking. I had no choice, but to either compete for a home, or rent and sit it out. People here would have said rent, and they would have been right. 4 yrs later, the market had dropped quite a bit and I was under water in my San Jose house I paid $100k over asking for to get. I am back above water now, even in this market, but would have been better off buying stocks (wait, that is not true, I would have lost even more on that one, I bought just before the stock crash . . . I mean correction).
In this market I just don’t have to compete. I think you touched on this. Of the homes I “considered” an offer on, I really only loved 2 (the electronics one and the stretch one). In those cases, no matter how much I loved them, I was turned off by the selling agent’s comments. The first was outright bad conduct IMHO. The second, well she told my agent they had that all cash no contingency offer richchex just referred to earlier. To be honest, on that particular house, I could not afford to compete even if I wanted to. It was at the absolute top of my range at low asking. But I like to think I would have still walked. Why get into a bidding war in a buyer’s market? Seller’s market sure, but buyer’s market?
Of course, as you indicated SDR, if I like the house I should not let a rule get in my way. You are right. But only 2 fit that bill so far, not the others I listed. That one house with 10 offers was not going to be my house. It was going to be an investment. It was tiny and not what I was looking for. It was for sale 3 doors from one I was looking at. We walked over saw the price and immediately started talking offer. The sole one I actually wrote an offer on was a tear down on a magnificant lot/neighborhood.
Either way, I think I will take your advice and write an offer if I like the house enough. If another higher offer comes in (whether true or not) I don’t have to respond by upping mine. I can just (i) say to the selling agent “please consider mine a back up offer” or (ii) withdraw and tell the agent “please call my agent if it falls out of escrow.” But I will not compete. Not in this market.
Have you ever noticed on eBay with multiple auctions of the same exact item? One has 15 bids and another that closes just 1 hr later for the same item has 0 bids. People feel that if there is competition for something, it must be worth the extra price to get it. I am the guy who waits the extra hr and puts in 1 bid and pays the lower price for the same item.
Ok, homes are not identical (well unless you live in my neighborhood of 5 interiors, 4 exteriors, and 4 exterior colors). But with 200+ homes for sale in RSF, I have enough choices to ensure I don’t pay more than I should.
I did find my dream house down there, but it was that last one and even with her, I refused to play outside my self induced comfort zone. Indeed what you described is exactly what I observed. The house was on the market 4 months the first time I decided I wanted to write an offer. No offers had come in. When we said we wanted to write one, suddenly there was a cash offer. We walked and 2 more months went by. What happened to that other offer, it never went into escrow. So we were going to try again. Again, suddenly 2 offers were comming in that day. Again we walked. Again those other two never materialized. Just weeks later my agent took another client through that house as a favor for another agent and boom, no offers pending. Now, it seems to have actually sold.
Yes, on that one, I should have just written my offer and let it sit. Next time, if I find that dream house, I will take your good advice SDR and write a formal offer. Anything short of that dream house, however, as soon as I detect the game, I won’t play. I just dunt wanna.
If there are real offers on the table fine, but if there are none, selling agents should not mislead. Why drive away buyers? In a market like this, buyers will be less patient with things like that and will walk, because they can. And after all the words I have written on this thread, this was the point of my original tome of a post.
