I am not interested in people’s personal addresses (mine is public record btw–look it up) but I am very interested in people showing me actual examples of experiences that did not involve different agents on each side.
I got 2 brave souls to share.
Since I would like to protect their privacy I will not give their names or addresses. I will give some general info about the deals and what part of town it was in.
DIY 1:
This cat bought an SFR repo in the greater Rancho Bernardo area. He used the bank’s listing agent and closed in mid 2009. Relevant Caveat: this unit was sold with tenants still in it and state explicitly that the listing agent will only entertain cash offers. The offer that closed was one with a 80% loan. In my estimation, this property closed at about 5% below comparable properties. As expected, the buyer corrected me and said it was at least 10%. The problem with that argument is that much of the value was POTENTIAL value, not actual. While I would not shy away from it, the market for a property with foreclosed-upon tenants is typically much softer than for vacant units (investors and buyer-occupiers just don’t like to run the risk of psycho angry tenants). However, DIY1 did well, dealt with his tenants well and made out well. Truly well played sir.
DIY2:
Purchased a house in the greater Clairemont area.
They went directly to the seller (who I guess they knew) and made an offer that resulted in the same seller net they would have gotten if they used an agent (but with less total purchase price). Note: this purchase was in mid-2003 during an accelerating boom market.
It was my observation, when running the numbers that the buyer had overpaid by a few percent but that this did not qualify as “getting screwed”. Again, as with the usual script, the buyer disputed this and told me that he was sure that the property would have sold for $38k more in a minute. He based this on the fact that a prospective listing agent had given the $38k higher price. A common feature of a boom market is that listing agents will list a property for a high price and take a 6 month listing. One way or another they get it sold because what seems high now may be very reasonable in 6 months from now. That means that while I feel very confident in my assessment (that they overpaid in mid 2003), the reality is that they were not overpaying by early 2004.
So we have an example of 2 deals where the buyers did okay (though neither wildly well or bad).
They both thought they did better than I thought they did and maybe that is part of the benefit. My lemon meringue pie is better than Marie Callender’s (to me) but would likely lose in any taste test. Its better because I actually pick the lemons and separate the eggs and whip the whites and blend the dough.
It is damn interesting though and I plan to run this past a few other agents I trust for their feedback (the deals not the pie).
I would like to hear from other people who have gone this direction.
