Profile picture for ibcrewin

Was I misrepresented by my realtor?

I put a bid in with my realtor and I told him my max amount was going to be 320k. The property we put an offer on was listed at 359k. A long shot but he thought we had a chance none the less. He said we should offer 320k off the bat. We put the offer in and the sellers came back twice ending up at 335k. Our agent knew our max was 320k, but he kept pushing us to meet them at 335k.

I kind of feel like he knew 33-335k was going to be the final price. So,

A) Does something sound off here?
B) If my max was 320k should he have started lower?
C) Is it normal to push a client above the max for another 15k?

Thanks!
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May 18 2009 - US
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Answers (21)

Right on Linda. Why show a 320 max buyer a 359 house? You had very little chance from the start and this is how I would have communicated it. Secondly once they were not budging from 335 it was time to move on. Next..
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June 01 2009
Profile picture for rjon.101
ibcrewin

For US data there were over 1.5 million foreclosurse in the last 1.5 years and in the next 4 years there will be another 8 million foreclosures , there will be 2.5 million foreclosures in 2009 alone; data souce provided earlier. AND in at least 99% of those foreclosures , past and future,  was a  real estate agent who knew , or if they did not know they were totaly incompetant , that the person buying could not afford the loan. ( all those interest only, alt A, subprime, etc etc, loans that were made.)  The REA who earned money by closing a sale of a house in order to provide a living for himself/herself helped those who could not afford the house - buy the house... so did all the loan officers who should have known the limits of what a person would afford.  and in addition to home losses something around 25% of all homeowers are under water and owe more than their home is worth and can't sell it without begging the bank to foregive their debt (its been retermed a short sale to save dignity)  < they have my sympathy it is a tough situation to be in >  and it is  all because  a licensed REA helped them to pay more than they should, (or again if the REA did not know they were paying too much they were incompetent to advise) and the appraisers who appraised at what the lenders wanted so the loan could be made and the appraiser would keep working and not get black balled. etc etc,,

So after my ranting I will re-ask your question in a rhetoricle manner
C) Is it normal for a (saleman) to push a client above the max for another 15k?    (ever bought a used car from a used car saleman )

That said why do you doubt that there is something wrong with the situation you described, question A
A) Does something sound off here? yes as in wrong, but no as in normal operating procedures followed to closed a sale.  
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May 26 2009
Profile picture for space_acer
"The learn enough about market pricing to give reasons to buy."

Strange, they dont give any reason why sellers should not sell...


RE only goes up, why sell today when its worth more next month/year.
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May 26 2009
Profile picture for rjon.101
If you are worried about missing a good deal and where real estate is going here is some help on a good article make of it what you will.  


http://www.bloomberg.com/apps/news?pid=20603037&sid=aJjnVOs7SUW8&refer=home

date may 26,   title is 'Home Prices in 20 U.S. Cities Fall More Than Forecast (Update2)'  hope you know who bloomberg new source is .its not a fly by night web site.

and that extra 15,000 that will only cost $140 month is called reduce it to the rediculus, a standard closing technique, you can reduce it even to $140/30days  = $4.67 per day the price of a daily starbucks ,, see the trick.    But how about that extra $15,000,  it will become  an extra $30,000 or more out of your pocket if its a 30 year loan- after the tax deduction, or more depending on your interest rate. 

2 things matter
1)is the house worth it , if you are not sure you don't know enough about your market.
2)can you afford it and not be another statistic in the projected 8 million foreclosures that will occur in the next 4 years. IF 15k now , 30K later and 140 day are trivial what does it matter? or is $140 month the straw ... then walk away.
data source for projected foreclosure rates
http://www.responsiblelending.org/search/search.jsp?query=foreclosure+by+state
you can find the projected foreclosure rate for you state at this link.
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May 26 2009
Never offer more than you feel comfortable with. If the agent "pushes you" get another agent.
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May 26 2009
Profile picture for Lady Chattel
Oh Barbara, we all know that it really doesn't matter the title or who they say they represent, in the end all agents, no matter, represent themselves and their own interests, otherwise they wouldn't be human......or make a living......sure there are those who can balance the client and their needs and can add a little touch of good ethics to the mix, but based on the postings of agents and their rantings here in Zillow it is a small amount I am sure of.
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May 26 2009
Profile picture for rjon.101
Congrads , you have now learned why you never trust a realtor who wants to sell you something , actually you should never trust anyone who wants to make money by you buying or selling something. Did you really expect a comissioned saleman to be your friend and advocate. Or to even really know the value of real estate in the area you want to buy.  The realtors I know spend a lot more time on sales technique training than on developing a professional knowledge of the market. The learn enough about market pricing to give reasons to buy.  Look at all the crap they spread here on zillow about why to buy when the market is "according to news data still heading down for a long time" . They are salesmen they learn how to "close the deal" and get the commission.   Did you really expect something else.  And if you were dealing with the listing agent his job is not to help you it is to help the seller first and last.  And you may be right about the realtor knowing what the price was the owners would sell at and knew what he had to work you up to.... If listing agent he should have known, and  if  just a selling agent he may have talked with the listing agent and they figured out what to work towards.  remember  * million more foreclosures are projected by the mortgage bankers association , you will have lots of time to find a good house at the price you decide you will pay
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May 26 2009
You didn't actually say who the agent was representing. Was he/she a buyer's agent, a broker's agent or a seller's agent? You cannot assume the agent was working for you. You should have an agency disclosure to say who that person was representing.
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May 26 2009
Profile picture for space_acer
Not a long shot after all.. you are the only bidder.
The offering prices are always padded to income commissions
and other expenses.  It was always common for asking to be higher
than final prices.  

Your being financially conservative and unemotional.
Stick to your guns...


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May 26 2009
Profile picture for Lady Chattel
AzRob is spot on, never reveal your cards, your REA somehow believes you will budge perhaps so you need to play hardball, the market is in your favor.  Sure your agent is there to represent you but at the end of the day he/she wants to get paid and get the deal done.   I gave my selling agent only so much info cause I knew it may be divulged to the buying agent and it worked out well for me.   

Have your agent go for a verabal rebuttal and see what you get, if there is a bite then you can write it down, sometimes it seems more permanent to write it down and though a verbal may make them feel like you are more negotiable it is truly a pychological way to play the game and many agents will accept a verbal so they can work it out that way and then put it to paper for a final price.   

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May 26 2009
Profile picture for SAVVYBUYER
Listen to AZRob
A higher price, therefore higher commission is in everyone's interest except yours. So who do you think they are really looking out for?
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May 26 2009
The answer to your question should depend on how much do you want the house and how much you can afford? It is not a matter of the price but it is the matter of value. If you are buying a house to live in then the location will be more important than just the price. Your agent should qualify you first to know what is the max amount you can afford but the 15K difference in price is only about $140 difference in mortgage payment if you put 20% down payment. So if you really like the house and the area, then it is not the 15K difference that you should worry about but what you should weight is the $140 extra in mortgage payment and how much do you like the house. Is $140 worth it for you to buy it?? If the answer is yes, then go for it. Sometimes in life, you pay more for things you love.
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May 26 2009
If you do not believe that your realtor is 100% on your side -- you are probably working with the wrong person. I always ask my clients the maximum they are willing to pay for a property and then, depending on how that number relates to the ask price and to current market conditions, work with them to develop an offer strategy. In some cases, we will go in with their start number and offer it as final and best. In other cases, we will start lower and work toward a compromise.I will not push them to move beyond their comfort number but, rather, help them to accept the outcome -- whatever it might be. I find that it is a very odd and unpredictable market -- you never know for certain what will work until you try. I have lost a few but I have also succeeded many times in getting an offer accepted that even I thought was impossibly low!!
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May 26 2009
I think your agent showed you something out of your budget.  In my area you have to have room to bid higher when the banks counter and they hopefully will...there's 10 offers going on every home closed on here now...if your max is $320K!!! where can you go???  Did sales within the last 30-45 days show $359K or $335K for similar homes?   Did you want it or were you just seeing if they'd accept a low ball offer?
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May 19 2009
Some great comments here. Some buyers don't show all their cards&do spend more than they originally tell their agent; however, if you know your maximum comfort level -- stick to it!  You should feel comfortable with your agent and talk with him about it so he doesn't show you homes above your max. price. 

If he showed you sold comps (not just listings) that the home was worth the $335K, he was probably just doing his best to get you the home.  Ultimately, it's your decision and your agent should provide professional guidance.
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May 18 2009
Profile picture for sunnyview
I have seen this situation happen before. Your agent may have felt like 320K was a longshot to begin with. He also may have been hoping to get the seller to split the difference between the list price and the offer to make deal the a go. Many people will not walk away from a deal over 5-15K unless they simply cannot afford it. Agents will point out the small difference in a mortgage payment  for that amount and clients will often say ok. That doesn't mean your should sign, but that's what I have seen myself. If your top price on this house (or on any house) is 320K, then that's what you should stick with. I have made offers on houses where the seller has countered at full price or has been so overpriced that the 10K reduction in price that they countered with is still very far from the closed comps in the area. In any of these cases, you should make your decision based on the value of the house and not on the emotions involved. Your agent didn't necessarily do anything wrong, but may have felt that that 320K was not really your final number. Try to be clear about both what you are willing to pay for any house you make an offer on and on what you can afford in the final number. That way your agent can do the best they can to negotiate the deal based on your situation and requirements. If you feel that you cannot trust them to do that, you may need to explain how you feel to your current agent and look for an agent you can work with.
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May 18 2009
Would you believe, many buyers don't tell their agents the truth about what they can afford?  They feel if they tell their agent the truth, he/she will try to get the maximum price (higher commission) not the minimum.

While I'm sure there are exceptions, most buyers agents want their clients to get the best deal possible (hence referrals), not the worst deal imaginable (hence no referrals).

In one of my first deals (10 years ago) I had a client with a "maximum" he could spend.  The property he was interested in was very appealing in many ways to many potential buyers.  I suggested he make his best offer first as he might not get a second chance.  We made an offer based on his maximum and lost the home to another buyer who offered $5k more.

The buyer gave me a lot of grief for not advising him to go over his self imposed limit, and switched to another agent.

What I learned from that experience is to give the best advice I can (with back up comps) and suggest a price range I think the seller will go for and then let the buyer direct from there.

It is/was your agents job to do his/her best to facilitate a win/win sale.
It sounds to me like he/she did their job. 

What you were missing was a highly motivated seller.  Keep looking and have some trust and faith in your agent, just make sure you both are on the same page regarding your abilities and desires.  It's almost always a disaster when you have a Champagne appetite and a Beer budget.
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May 18 2009
Profile picture for wetdawgs
Something sounds fishy in your description as if the realtor was making the decisions not you.    Who made the decision to make the offer for $320?   Surely you signed the forms. What was your realtor's input on the $320 offer?   Did he let you know that with low offers there are often counters?

What have you learned from this experience that you can take forward to the next house?



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May 18 2009
I've been tracking a listing in a neighborhood where I am attempting to land a listing. The home had sold and has now closed. With sellers concessions, the price ended up being discounted 10 percent on (according to my client) a home that was in remarkable condition. Frankly, I was surprised that the sellers took such a large discount (considering the home), but it does happen.

I wouldn't be surprised if your agent thought you could get the house for 10 percent less than list. But you should not feel pressured into going beyond not only what you can afford, but also going beyond a payment you are comfortable making every month for the next 30 years!

I think offering 320k on a 359k house was the maximum discount, so it's unlikely that offering less than 320k would've worked anyways.

Move on to the next deal. This house was not meant for you.
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May 18 2009
Did you get a copy of the comps on what the homes were sold for in the area? Seller does have a right to counter back on any offer or terms of the offer. I understand where you are standing, you need to have trust in your Realtor if you think he/she is not working in the best interest you should hire someone that will work for you. In regards to offer lower than $320K you should have discussed the strategy you are going to play out or stay firm with your current offer price. If the seller wants to agree let them come back to your offer price.
Don't feel pressured, its a big commitment and think thru this before you sign off.
Good Luck
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May 18 2009
Your Realtor SHOULD negotiate for you,SHOULD keep all such comments completely to him/herself.

BUT for others reading, I would recommend you never show your cards. Offer what you want, and if asked if you will pay more later simply shrug your shoulders and say, "I don't know."

There is never a reason to lay all your cards on the table. the two Realtors may compare just to try to get the deal done.
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May 18 2009
 
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