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Shady buying experience in Queens, NY - Help

We visited a house in Queens three times  It's listed as 3 family house built in 1985 for $980,000.  The third time we viewed the place, we told the agent that we would think about it and get back to him in a week to consult with our agent.  The seller's agent told us the house has multiple offers as high as $970,000 and as low as $920,000.  Then she proceeded to tell us that the house actually had to be re-priced because the certificate of occupancy stated that it's a 2 family with a walk-in but all the other paperwork has it listed as a 3 family.  The house was repriced and now the highest offer stands around $850,000 and she said the owner would sell the house for $860,000. 

I feel this is shady because this information was not disclosed to us and the listing price on the website still shows the original price.  We even confirmed the $980,000 price during our first viewing.  If we made an offer around $900k, would we have been ripped off.  Would this be caught further down the buying process?  I don't know why she is presenting this information to us now.

Given the new price levels, I still think the house can be negotiated much lower.  The agent obviously anchored the new price of $850,000 - $860,000 in our minds hoping that we would consider this a deal because it was originally at $980,000. 

Any help would be appreciated?
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March 26 2012 - Astoria
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The listing agent is breaking the law by disclosing other prices of offers to you, and disclosing what her client is willing to accept in a sale.  Your agent should be reporting this immediately to your state licensing authority.

In most states it is up to you to discover zoning issues, encroachments, or clouds on title that would prevent you from purchasing the home or negatively affect it's value.  Make sure your agent has an addendum specifiying your offer is based on the house being zoned as it is marketed and priced, since that is a specific concern to you.
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March 26 2012

Everything coming out of that agents mouth is either a lie or confidential information that should not be shared or both. Either way, if you are interested in the property it is up to you to find out all of this information. You are the one spending the money, it is up to you to KNOW if it is a three family or two family home. The sellers don't care if you pay twice what they would be willing to take for the house, they want as much as possible.

The fishy part isn't that you are being told all this conflicting information, the fishy part is that ANY of this type of information on pricing is being shared.

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March 26 2012
Hi User 438038,

The listing agent is not breaking the law disclosing prices of other offers as long as the seller, the listing agent's client instructed agent to disclose that information.

In NY state all buyers are entitled to their own representation. You should have a buyer's agent and your buyer's agent should be with you when you are viewing properties particularly when you're viewing a property for the third time.

Whether the listing agent is "shady" or not is irrelevant. A buyer should never rely only on the information the listing agent (seller's agent provides) The agent may not have known about the certificate of occupancy at the time the property was listed. In NYC all property records are public information and can be viewed on NYC.gov website via department of finance or buildings department.

In NY one of the guiding principles of real property law is "caveat emptor" meaning let the buyer beware. Due diligence is very important for a buyer in NYC. That is why you need both an experienced local buyer's agent and an experienced NYC real estate attorney.

Your agent should be advising you about a strategy and pricing regarding making an offer. After an offer is accepted but prior to signing a contract your lawyer is supposed to conduct due diligence that includes title search, investigating certificate of occupancy, zoning issues, renovations, encroachments or any other issue that is relevant to the purchase of the property and he/or she is supposed to advise you and represent your legal interests.

Good luck. My advise is make sure you have a good local buyer's agent that will represent you throughout the entire purchasing process including be present at showings rather than having you in discussions with seller's agent who's fiduciary duty and loyalty is to seller not you. You also need a good NYC real estate attorney.

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March 26 2012
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This must be going on a lot now because I experienced the same thing.  The seller agent stated that offers were 50K higher than ours of 720K then buyers appraisal came in 100K less than the 800K listed price.  So a counter offer was made contingent on appraisal which the seller broker did not want in contract.  When offer made based on appraisal, the seller agent told buyer agent that the offer was good and reneged.  
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May 11 2012
You cannot rely on any information given to you by a real estate broker and much less an agent.  You are advised to check all information independently.  As to the use of the house, only the certificate of occupancy is official.  If the house predates the C of O law, (prior to 1938), then you might depend on the classification at the NYC Dept. of Finance.  But other than that, just make the offer you are comfortable with based on your experience with looking around, and that's it.
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May 15 2012
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Great advice Daniel,
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May 15 2012

Mitchell's advice rocks.

I don't find anything particularly shady about the deal - there is often so much grey in the world of real estate. 

The owner could very well have used the property as a 3 family not ever realizing it was only zoned as a 2 family.  Or, could have known the fact precisely yet failed to tell the selling agent.

It is your duty as a buyer and your buyer's agent to discover as much as you can about a potential property.  Further fail safes will be the appraiser, the title search and the attorney involved.  But, a buyer's agent is there to protect you and can be legally liable if they miss big facts such as the above.

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May 18 2012
 
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