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how do i know im making the rite offer to a property other than my realtors opinion?

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August 31 2010 - Garfield Ridge
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"You can't do anything about an unrealistic seller in any circumstance.  The property is not going to sell, end of story."

hpvanc,
This statement is NOT true. Market value is only a matter of professional opinion and very subjective at best.

Case in point, I just submitted an offer on behalf of my client/buyer on a property that I personally think is overpriced by $30K - $50K.
Yet, because of the lot size and condition as compared to other homes in the area, beautiful staging and decorating inside the house, that home draws a lot of interest from the buyers despite being overpriced and being smaller square footage wise than other homes - my buyer most likely will be outpriced by other buyers who are willing to meet the seller's price.

After the sale all the staging and the furniture will be gone, but for now buyers are wowed into a bidding war.

Therefore, your statement that overpriced homes do not sell is simply not true. 
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September 01 2010
Profile picture for hpvanc
Viv,

You can't do anything about an unrealistic seller in any circumstance.  The property is not going to sell, end of story.  The buyer having a better understanding of the market and the property before making an offer seems to be something you oppose.  If the buyer over offers base on one Realtors opinion, and the contract is canceled after paying for inspections and appraisals, the buyer loses big time, and the seller still can't sell.  If a buyer under offers on a correctly priced property based on one Realtors opinion, the buyer loses, and the seller loses time too.  So what is the problem with 2nd opinions aside from it makes it difficult to protect your commission.  Yes maybe fewer sales will get done at unrealistic prices, but I believe the only way to close those sales today is with an uninformed cash buyer, and their aren't that many lottery winners in the market.

Sellers would also be wise to seek multiple opinions, which is allowed before signing the listing contract, but is difficult for them when they don't know why a property is not selling, and are only aware that they made a serious mistake selecting their agent.  Yes that mistake may have been listing it at all if they can't get the price they want, but even then they have wasted valuable time and effort.

The OP had a legitimate question, and you don't even seem to have a common point of reference for answering.  Let me paraphrase your answer "the seller gets to decide if they want to sell no matter what price you offer, just listen to your own Realtor and only use the information they have provided, that is all you can do."  You provided nothing towards how to validate their current realtors opinion, let alone how to seek another opinion.
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September 01 2010
Wow pretty much the same answer across the board here just put differently....consider:

A) Your Realtor should provide you with a comparative market analysis, what similar properties have sold for in the same area based on facts, not opinions.
B) If you don't like your Realtors CMA then ask another brokerage to work with you & provide you with one.
C) You can run your own analysis by using the Cook County Office, lots of work & time.
D) You can ask your Realtor to submit whatever YOU want to offer.  It's your choice. 

If your offer is too low then the seller will either reject or counter offer.  More than likely the seller will reject if it's too low because he/she will think you are not a serious buyer, unless, your "terms" are VERY favorable.

Hope that helps.  Good luck!
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September 01 2010
"I know Viv your opinion is always the only one, and is based on the lowest common denominator possible interpretation of the NAR guide.  So unless the NAR decides 2nd opinions are acceptable you will never acknowledge it as an idea."

hpvanc,

Hitting below the belt, ha? Or above the neck, should I say?
YOU are the one who is using "the lowest common denominator" logic....

Imagine that NAR allowed second and third opinions....... as a result the buyer would have a possibly better understanding  of the market value of the property ...... and.....

If the seller priced the property high because the seller is convinced his/her property is worth more than other homes, what would you do about it?
Take the seller to the court?

And what IF the same seller did receive an offer from another buyer who liked the property and agreed with the seller's pricing.... would you want to establish a new law that stops that buyer from submitting an offer because in "your" mind that buyer might be overpaying for that property?

Real estate is very much like retail: some homes are sold at full prices, some at sale prices, and others at closeout prices. The seller decides what category they are in - and if the seller does receive an offer it means the property was priced correctly.





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September 01 2010
Profile picture for hpvanc
I hope the OP comes back, but I read this question as "how do I get another opinion besides my current realtor."  No one has answered that.  Some people prefer to do more due diligence upfront before making an offer.  I know your commission compensation structure makes it difficult, however you are burying your heads in the sand if you don't think some buyers need it to make a decision.

It has nothing to do with property rights, or whether a seller will accept an offer, it has to do with making an accurate offer for said property.  If the seller is completely unreasonable on price a buyer knows going that they are extremely unlikely to get it accepted, however some of them would like to insure that they are making an accurate offer.

"Unlike doctors, REALTORS are able to provide very accurate information based on the most recent sales, which are than adjusted to recognize the special features of each property or lack of them."  While the entire premise of this is questionable, but however you slice it, you are still at the mercy of one Realtor to interpret it when making an offer.  If you are in a location where it is difficult to validate that data, or you know that you do not know enough to do so, a 2nd opinion becomes a necessity.  I know Viv your opinion is always the only one, and is based on the lowest common denominator possible interpretation of the NAR guide.  So unless the NAR decides 2nd opinions are acceptable you will never acknowledge it as an idea.

Under capitalism, buyer also have a right and obligation to make demands on the sellers and their representatives (sellers representatives include the so called buyers agent) to insure that they are getting an accurate representation of what they are buying.  Capitalism only works when both the buying and selling party have solid knowledge of the product or service they are buying and selling.

So the OP wants to make sure they aren't placing a bid on a "pig in a poke" and if the transaction goes through won't be "letting the cat out of the bag."  http://en.wikipedia.org/wiki/Pig_in_a_poke
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September 01 2010

Well your agent should of provided you with some comps in the area of what has been selling. You should look at the comps and be able to at least have some idea of what the place is worth, and know if your agent is lying to you. If you do not trust your agent, you shouldnt be working with them. Go out and get a new agent. Interview two or three agents, and go with someone you feel comfortable with. This way you wont be put in this situation.

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September 01 2010
You could go to the Public Records for your county and see what recent sales have been in your area.
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September 01 2010
"When you have a serious medical issue you would normally seek multiple opinions before beginning treatment."

hpvanc,
Again, you missed the point - very bad analogy.

You get the second, third, fourth medical opinion to increase the chances of fighting off the illness because often doctors give different diagnosis.
 
Unlike doctors, REALTORS are able to provide very accurate information based on the most recent sales, which are than adjusted to recognize the special features of each property or lack of them.

Realtors respect property rights and recognize all homeowners' constitutional rights to full ownership without interference from third parties including buyers.

Comparing homeowners to illness that can be fight off with second or third opinion was in very bad taste.

  


 
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September 01 2010
"You missed my point completely.  How do you get a 2nd opinion on an offer before you spend valuable time, effort, and potentially money making the offer? "

hpvanc,

No, I think YOU missed my point completely :-)

The seller expects a full price offer, or close to it.
This is why the seller priced their home the way they did. If the seller thought their home was worth less they would have put a different sticker price - as I am sure, the listing agent suggested it.

As a buyer, you can get a second opinion, but it will NOT amount to much UNLESS the SELLER is willing to negotiate.

Just because the buyer arrived at a different price - which may be correct by the way - it does NOT mean the seller must accept that lower offer.
As I wrote in my previous post, the seller's decision will depend on many factors.

No, I did not missunderstand your point. I think that you failed to understand my point that sellers do not have to sell unless they want to. The only thing that sellers cannot do is to discriminate - the federal Fair Housing law.

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September 01 2010
Some questions I would ask:
- Can I afford it - - even if the price drops?
- Is it worth it to me at the price I offered? And monthly payment that comes along with it.
- What have comparable homes sold for recently? (your Realtor can provide this data).
- What other homes are listed in this price range?
- What was the appraised value? (if you are obtaining financing, this is almost like a safeguard that you aren't paying too much).
- What are the trends in my market?

When in doubt - err on the side of offering less.
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August 31 2010
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Vivian,

You missed my point completely.  How do you get a 2nd opinion on an offer before you spend valuable time, effort, and potentially money making the offer?  When you have a serious medical issue you would normally seek multiple opinions before beginning treatment.  If it is an engineering issue more than 1 engineer will be required to check the figures.

The actual transfer of the property is still in the future when making an offer.  And NO I absolutely do not want the government setting the price.
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August 31 2010
"Unfortunately I don't know the answer to that in the current industry structure."

hpvanc,

Establishing a "market" value of the property has NOTHING to do with current (real estate or lending) industry structure.

It rather goes to the core of property rights and the most basic right of the homeowners to sell their property at any price they choose as long as it is an arm's length negotiation and the buyer is not unlawfully forced into the transaction.

Do you have a better idea as to how pass the title to the property from the seller to the buyer?
Would you want the government to decide how much each property is worth?
I hope not.
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August 31 2010
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The most of the responders have given you good advise as far as it goes.  You should ask and carefully review how they arrived at their opinion.  I would go on to say you also need to try to validate their opinion, which may be difficult or impossible.  In non-disclosure states, public data is unavailable, if you are in Chicago as indicated by the location on this post, the public records are notoriously late and inaccurate. 

I'm not sure how under those circumstances how you do validate, unless you have been looking for a period of time, and have validated the agents opinion against what has been sold and have attained reasonable knowledge about at what price. 

Maybe the question really should be how do you go about getting a second independent opinion before either the seller rejects it or your lender rejects it based on appraisal.  Unfortunately I don't know the answer to that in the current industry structure.
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August 31 2010
I will tend to go with how you feel about the offer you made. If you feel as though it is the price you are willing to pay and you feel confortable with the terms, that is what matters. My opinion of the the transaction may be unwillfully skewed.  If you feel as though you would have paid more but could possibly lose out because you were trying to get a deal, you will only have you to blame. Knowing whether you could have paid less is a futile effort. Remember, buying real estate has more do with how you feel about the deal and less about what others opinions are. Don't base your offer solely on what others tell you do. Do your homework. Educate yourself and do what you feel is best. Often your first or gut feeling is the right one.
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August 31 2010
Confused01,

I hope that your agent armed you with all the information about the most recent sales of comparable homes in the neighborhood, compared the tax records, etc. Based on that information, you can arrive at an approximate market value of the home you plan to purchase.

Having said that, all that "scientific" analysis and all the CMAs in the world mean NOTHING if the SELLER thinks otherwise. The seller's opinion of the market value of his/her home may be very different from yours.
 
The seller's willingness to negotiate is influenced by many factors:

1) Number of days on the market - the longer the property is on the market the more likely the seller is willing to negotiate, although not always

2) How soon the seller must sell - seller who is in NO hurry will not sell untill they get "their" price, even it means no sale

3) Number of other buyers actively interested in the property and willing to seat at the settlement table

4) Terms of your offer - the highest offer is NOT necessarily the best offer if other terms are not acceptable to the seller


The bottom line is that your opinion of the market value of the home must agree with the seller's market value of their home - there has to be meeting of the minds.
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August 31 2010
If the only reason you are making any offer is because of your agent's 'opinion', I think you have a problem. Your agents job is to show you recent past comparables of properties that were similar, at least on paper, to what you are interested in. Then YOU make the decision. Trust has little to do with it. Your agent also should have been showing you a variety of similar properties in the previous weeks & months that are on the market. No one buys the first property they ever look at, at least not in this market.
 In this market there usually are dozens of somewhat similar property to view based on whatever criteria you gave your agent to search for. After seeing many/most/all of these 'similar' property, how does this one compare??? The only opinion that matters is yours. If you wrote an offer on something you now are so unsure of that you need to make a post on this site, perhaps you are not ready to 'commit' to this one.......or any of them? You can get out of any offer/contract during the attorney review if you have 2nd thoughts. Tell your attorney.

philip

philip
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August 31 2010
While trusting your agent's advice is important, it is nice to see a buyer who is engaged and active in the home buying process.

Here is a link to the Cook County property transfer website.
http://chicagotribune.public-record.com/realestate/search/cook

You can search this site to pull up data on both your property of interest and other properties in the area.  Look at what the seller paid for the property, how long ago they purchased, and how much similar properties are selling for (ideally within the last 3-6 months).

Best case scenario, you discuss this with your agent and do the leg-work together.  Your agent can pull up MLS sales data and review that in conjunction with all of the other data. 

A good agent also knows how a typical seller will respond to an offer and can help you structure yours so that you have more working in your favor than just the initial offering price.

In the chance that you disagree with your agent's opinion, they should submit an offer you are comfortable with.   At the end of the day, you are their client and their responsibility is to you.

Best of luck with your offer!
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August 31 2010
Truly, your realtor has your best interest.  Talk to him / her and listen while they explain how the values go for the property you want.  They should be able to show you recent sales in the area - sales on homes that are very similar to the one you want.  They'll explain how they figured out what your offer should be.  Look over all their supporting information.  Ask questions.  It's important that your reach a real comfort level and just explore with them the presentation they make to you.  It is a partnership and you should stay loyal and work through your doubts with them.  I truly don't know any realtor that wants to put you in a bad position value wise ~ their continuing business very much depends on your satisfaction so keep talking and working on your peace of mind.

Celia Butler
Home Loan Diva
Lending in all 50 states!
[Contact removed by moderator]
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August 31 2010
And Ryan just said what I said in 2 short and concise sentences.

I'll shut up now.
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August 31 2010
Although ideally you should hire an agent you trust (after all, this is presumably the largest purchase of your life) you don't actually have to take your realtor's word for it.
Your realtor should be showing you very clearly why they have come up with the opinion they have regarding offer price. They should be showing you the recent sold comparables they have used to determine their opinion.  That way you can question (and expect an intelligent response) why the agent chose the houses they did for comparison and see if you agree with it or not.
Ultimately, you make the decision, not your agent.  But your agent, by doing their job, should be making your job much easier.
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August 31 2010
Hopefully your Realtor gave you a lot of supporting data for the offer.  If they did, you should trust them. 
Ryan
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August 31 2010
 
Related Questions
how do i know im making the rite offer to a property other than my realtors opinion?
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Latest answer by Vivianne Rutkowski
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