Profile picture for LinusK

Still in the market

Looking at 4 houses this afternoon. Have no buyer's agent - I made appointments with the listing agent for each house.

I've been reading up on 'procuring cause' - any advice or input appreciated.

After my experience with the last one, I'm trying to remind myself that while it costs sellers nothing to list their houses, it also costs me nothing to make an offer.
  • October 25 2007 - US
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Answers (21)

Profile picture for robin398
If you made the appointment to see the property with the listing agent that agent is not representing you. Procuring cause starts when you are asked if you are being represented by a realtor. With that being said, procuring cause basically means who showed your the home first. If a listing agent knows of a procuring cause situation then he is entitled to disclose all facts pertaining to the transaction to all brokers or agents involved.

If you are interested in a certain property then that listing agent will also act as a dual agent.
  • October 25 2007
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Profile picture for chuckdog24
>>it also costs me nothing to make an offer<<

I beg to differ. Yes the offer costs nothing but I can say first hand that "offer process" can absolutely cost you as it did us.

Here's a recap of our springtime home offer joy:
1) Had an offer accepted for a home
2) Paid $545 for inspection & $325 for appraisal
3) Appraisal came in $13k less than our offer
4) Sellers refused to negotiate & sent their lawyer after us
5) Bank declined the loan & we paid an additional $350 for our lawyer to deliver that doc to their lawyer
6) Weeks later the sellers indicated that they still wanted to sell to us but needed to validate the 1st appraisal. We ordered a second appraisal for $325 given the amount that we already had invested in the offer.
7) Sellers denied our appraisal based offer (average of the two) & demanded $5k above the highest appraisal.
8) That finally ended in May & the house is unsold but now listed for $100 less than the higher appraisal.

So, "it also costs me nothing to make an offer"???
I beg to differ.
PS: Good luck to not find delusional sellers cause they're certainly out there!!
  • October 25 2007
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Profile picture for Bette Defarm
"the house is unsold but now listed for $100 less than the higher appraisal."

I know it's small comfort, but they must be in a world of regret every day it hasn't sold.
  • October 25 2007
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I would either find another agent to represent you or use a real estate lawyer.
The listing agent is representing the seller, and even if he/she agrees to be a dual agent , are you going to feel completely comfortable with him acting in both of your interests.
Prior to becoming an agent, I used dual agents twice, and it left a sour taste in my mouth both times. I don't recommend it.
If you have a solid real estate background and know procedures and really know how to negotiate, then maybe...tread cautiously.
  • October 25 2007
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Profile picture for chuckdog24
Yes, cabin, it is... Only it's small comfort is in a spiteful way & that's not how anyone "wants" to be. Rates are back down to within 1/8% of what our lock rate was so part of me is tempted to go back with a new agent and a lowball offer but I don't dare add to the $1500+ loss & frustration regarding those sellers.

We have 20% down, great credit, no house to sell & didn't break stones about the inspection issues & that was our reward. Argh!!!!

No question that we'll be using a new "buyers" agent the next time around.
  • October 25 2007
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Profile picture for LinusK
***I beg to differ. Yes the offer costs nothing but I can say first hand that "offer process" can absolutely cost you as it did us.

The last time I made an offer, I hired an appraiser to appraise the property BEFORE I made the offer.

The appraisal came in at 87% of the list price, and I included the appraiser's report along with my offer... which was rejected without a counter.

So what I mean when I say it costs nothing to make an offer... is that I'm planning on making lowball offers, and if the seller isn't serious enough to make a reasonable counter, I'll move on to the next one.

In other words, I feel like I need to have some confirmation that the seller is serious about selling his house, before I start paying for appraisals, inspections, etc.

Also... is there any reason you didn't include language that the house must appraise as a contingent clause in your contract?
  • October 25 2007
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Profile picture for LinusK
***If you are interested in a certain property then that listing agent will also act as a dual agent.

There seems to be a ton of disagreement regarding procuring cause among Realtors. As far as I can tell, in my state (TX), a buyer always has a right to obtain a buyer's agent, regardless of where he is in the process. If I'm wrong about that, though, I'd be pleased to know.
  • October 25 2007
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Profile picture for Bette Defarm
"No question that we'll be using a new "buyers" agent the next time around."

Good luck with that! I've interviewed so many that can't answer the most basic questions...I hear you have a better selection in your area of CT. I need someone who understands the future building plans of my town or I'd work with someone further away.
  • October 25 2007
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Profile picture for LinusK
*** I would either find another agent to represent you or use a real estate lawyer.
The listing agent is representing the seller, and even if he/she agrees to be a dual agent , are you going to feel completely comfortable with him acting in both of your interests.
Prior to becoming an agent, I used dual agents twice, and it left a sour taste in my mouth both times. I don't recommend it.
If you have a solid real estate background and know procedures and really know how to negotiate, then maybe...tread cautiously.

No offense, Ira, because I know there are good buyer's agents out there... but using a BUYER'S agent is actually what makes me uncomfortable.

Between secret buyer's agent bonuses, hidden in the "agent only" fields in MLS, and the fact that so many agents insist it's the SELLER who's paying their fee (not me), the idea of using someone who may sell me out is scarier than dealing with an agent I KNOW is on the other side.

Plus, I'd really prefer to do most of the work of finding my home myself... and the idea of paying someone $6000+ for the few things I really could use a Realtor for... just doesn't appeal to me. $500 or $1000 per hour is not a reasonable fee for what I'm looking for.
  • October 25 2007
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Profile picture for chuckdog24
Linus, >>is there any reason you didn't include language that the house must appraise as a contingent clause in your contract?<<
That's yet another reason why we won't be working with that agent anymore. As we signed the offer papers she verbally told us that she included an appraisal contigentcy but we were caught up in the moment & didn't catch that she never put it on the contract.

Your appraisal process actually sounds like more $ "exposure" rather than less & it only has value if your bank approves of the appraiser & the report.

In the future we'll do the following:
1) Wait for the % of delusional sellers to go down
2) Hire a better agent
3) Do better comp homework (tapping on that "better agent" to do some work)
4) Be sure that the appraisal contingentcy is in our offer
5) Order the inspection after the appraisal comes back
6) Have sufficient time in the contract to do #5
7) Never go back to sour sellers with another offer. If they don't like what we have to offer then, NEXT!!

We had a problem getting our bank to do a 2nd appraisal with no contract to base it on. How are you getting around that? Also, how is it not costing you money with your offer process? If your hit rate is as high as 25% for your offers then you're in worse shape than we were with "offer costs".
  • October 25 2007
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Our (CA) appraisal contingency is right in the contract. An agent would have to check a box to make the contract noncontingent on appraisal.
  • October 25 2007
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Profile picture for LinusK
Chuck... I'm just a regular buyer, not a pro. I did the appraisal thing first, last time, because although I really liked the house, I suspected it was overpriced, for its zip code. And I wanted a professional opinion. It turned out I was right, but it also turned out it didn't matter, because the sellers didn't have to move, and the sellers are only interested in selling if they can net enough to buy a bigger, better house in a better part of town. So I 'wasted' the appraiser's fee in the sense the sellers didn't care what the appraiser said. But on the other hand, I also avoided offering too much, which could have led to more money and time wasted, and a deal that wouldn't have closed in any event.

***We had a problem getting our bank to do a 2nd appraisal with no contract to base it on. How are you getting around that?

I hired the appraiser myself. With all the pressure on appraisers to "hit the number" I'm not comfortable relying on the bank's appraiser, alone.

***As we signed the offer papers she verbally told us that she included an appraisal contigentcy but we were caught up in the moment & didn't catch that she never put it on the contract.

This is a good example of why it's so important (to me) not to rely on others to do things for me.

***Do better comp homework (tapping on that "better agent" to do some work)

Running comps is one of the things that would be most valuable to me in terms of having an agent. It seems like you pretty much have to have access to MLS to get reliable comps where I live. (The zestimates are hopelessly inaccurate).

***Wait for the % of delusional sellers to go down

In Austin, prices have only just barely begun to fall. I expect there are any number of sellers out there who're still expecting double-digit appreciation for each and every year they've been in their homes... and it's going to take a while for them to realize they're not going to get it.
  • October 25 2007
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further, in az there are many choices of who pays for the appraisal... mark seller pays... or worst case seller pays, buyer reimburses at close... if the contract fails you aren't out the cash for an appraisal... and, btw, the sad stories above are reasons to use a good agent, such as Marci or myself...
  • October 25 2007
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Profile picture for chuckdog24
Linus, right on my friend, I'm just a regular buyer too who's a touch bitter about learning the ropes the hard way.

azrob's suggestion to have the seller pay for the appraisal makes great sense so long as they order that appraisal thru your banks list of approved appraisers. He's right on the money about the need for a good agent too. Many things constitute a good buyers agent but some that I'd highlight would be:
* Strong on analizing comp values/gathering comp data
* Looks out for buyer's interests
* Strong negotiator
* Fair, honest & straight forward
* Doesn't create panic with their client (ours kept us paniced about loosing our deposit $ when the home didn't appraise)
  • October 25 2007
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Oh azrob, you did it again. You better watch it, people might think you like me. LOL
  • October 25 2007
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Profile picture for chuckdog24
azrob has a crush on Marci... La la la la la (sorry, Pinks similarly called me out a while back & I'm passing it on..)
  • October 25 2007
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Profile picture for Alan May
In Illinois, the buyer's LENDER traditionally pays for the appraisal... (since they're the ones who really want it anyway, they want control over the appraisal)...

Linus... procuring cause only refers to which BUYER's agent is entitled to the buyer's side commission... if you're not using a buyer's agent, then the discussion over procuring cause doesn't exist. There is no contention that YOU found the home yourself.
  • October 25 2007
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LMAO chuckdog, last time he typed my name in a postive way it was a typo.
  • October 25 2007
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Profile picture for retired13
I agree with the first agent accessment. Never use a listing agent to look at a house and than another agent to write it. Your be setting yourself up for a bad transaction. Agent don't like being used and you don't have any right to not disclose your plan to use another agent to write your offer.

Trust me your treading dangerous waters as a buyer. Lots of agent would delibertly encourage the seller to counter you full price or if another offer comes in, do anything they can to get that other offer accepted.

big no no. Be up front with the agent. If you want your own agent get them to show you the homes and make them do the work.

If your not working with a agent and have seen the house with the listing agent. You very smart to us them for the offer. They can be flexable too on there commission and sometime will kick in to put the deal together. Dual agency is just fine. Buyer agent just don't want you to belive this because they want a piece of the action. It not about you its about their pocket book.
  • October 27 2007
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Profile picture for LinusK
Thanks for the tip.
  • October 27 2007
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Profile picture for marciaharris
"Plus, I'd really prefer to do most of the work of finding my home myself... and the idea of paying someone $6000+ for the few things I really could use a Realtor for... just doesn't appeal to me. $500 or $1000 per hour is not a reasonable fee for what I'm looking for. "

The bottom line on this is that the seller has already agreed to pay a certain percentage of commission that is to be split between the selling Realtor and the listing Realtor, so that commission is being paid not matter what. You aren't paying the $6000 and it will be paid to someone whether it be the listing Realtor who is representing both sides of the transaction or a buyer's agent that you hire to represent you. There are horror stories out there for buyers and sellers in every different scenario. There are Realtors who can fairly represent both sides of the transaction and there are Realtors who are grossly incompetent and couldn't represent themselves fairly in their own transaction.

It does make sense to use a Realtor for representation when buying or selling a house, but it makes equal sense to really go out there and interview the Realtors to find one who you can trust and who is qualified in the market you are looking in. Just because they have a license doesn't automatically mean they are qualified to meet your specific needs.
  • October 27 2007
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