Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > Texas > Houston
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
 
Old 10-08-2010, 10:44 PM
 
119 posts, read 501,906 times
Reputation: 32

Advertisements

Hi, I'm looking to buy a house as mentioned earlier in my post "How to determine if your Realtor is good?". When my Realtor ask me what's my budget, do I tell him/her my real budget? Or do I tell him/her a number less than my real budget?

I'm concerned that if I tell the Realtor my real budget, the Realtor may not try to negotiate a better price for me if he/she knows that the asking price is already within my budget.

For example, let's say I tell my Realtor that my real budget is $250K. Later we find a house that we like and the asking price is $225K. Since $225K is already within my budget, I'm concerned that my Realtor has no motivation to negotiate a better price for me.

Or my Realtor may keep finding me houses where the asking price is around $250K since he/she knows that my real budget is $250K. If the house that we need only costs $225K, will the Realtor keep finding $250K houses for me since he/she knows my real budget? The higher the house price, the higher their commission is, right?

Any advice or suggestions? Thanks.
Quick reply to this message

 
Old 10-08-2010, 11:01 PM
 
Location: Buda, Texas
799 posts, read 3,678,652 times
Reputation: 288
You should tell you Realtor what price you would like to stay around..if your Realtor tries to upsell you, then they are not the right Realtor for you..Most of my clients can afford alot more then what they buy . I always search for homes approx 3-6% above the price and below what the buyer is trying to stay at because I know I can negotiate that down. I also send a preapproval letter based on the price of the current home..for instance if lender says you are approved for 250,000 and we are putting an offer in on 200,00, then the letter says you are approved for 200,000..you should be honest and get an honest agent. You will know right away if they are not.. On the other hand, if you are looking in a 250 neighborhood, can afford it and want to offer 200..I would advise you to get alot closer to what you can afford for that neighborhood so that you have a chance at the house..I hope that helps you!
Quick reply to this message
 
Old 10-08-2010, 11:08 PM
 
Location: Texas
44,257 posts, read 64,062,141 times
Reputation: 73913
I am annoyed at realtors who know the range you told them but insist on showing you homes that are above it because there's a chance they can bargain them down. How about we bargain down a house that starts off in our range?

Frankly, I think they're hoping you become emotionally attached enough to a pricier home so that even if it doesn't wind up 'in your range,' you will still buy it because, as the above realtor just said (irrelevantly), most people can afford more than the range they tell their realtor. That shouldn't matter, btw...the range is not about what I can afford. It's about what I want to spend. You're supposed to help me find that house.
Quick reply to this message
 
Old 10-09-2010, 12:17 AM
 
Location: The Greater Houston Metro Area
9,053 posts, read 17,111,665 times
Reputation: 15226
Give a range. If someone tells me $200K - $225K - they are going to get listings from $175K - $225K. They may find something they love for $190K and that would be fantastic. Chances are that if I go below $175K (given their criteria) they won't be happy with quality.

Since you are new to houston, and we have high property taxes - it's better to give a comfortable monthly payment figure that would include principal, interest, taxes and insurance - and size of down payment. That would be your ceiling.

I just executed a contract today for $153,900 - his ceiling was $200K - we obviously didn't have to go that high to find what he wanted. It depends on area, size, etc.

Again, not being familiar with the Houston area, you are going to be pleasantly surprised with prices. Have a ceiling but be open to going below it.
Quick reply to this message
 
Old 10-09-2010, 12:19 AM
 
Location: The Greater Houston Metro Area
9,053 posts, read 17,111,665 times
Reputation: 15226
Quote:
Originally Posted by SkyeAnjel View Post
You should tell you Realtor what price you would like to stay around..if your Realtor tries to upsell you, then they are not the right Realtor for you..Most of my clients can afford alot more then what they buy . I always search for homes approx 3-6% above the price and below what the buyer is trying to stay at because I know I can negotiate that down. I also send a preapproval letter based on the price of the current home..for instance if lender says you are approved for 250,000 and we are putting an offer in on 200,00, then the letter says you are approved for 200,000..you should be honest and get an honest agent. You will know right away if they are not.. On the other hand, if you are looking in a 250 neighborhood, can afford it and want to offer 200..I would advise you to get alot closer to what you can afford for that neighborhood so that you have a chance at the house..I hope that helps you!
I agree with everything but the letter. I don't care if my client is approved for 5 million dollars, it has no bearing on what they are willing to pay for a particular property.
Quick reply to this message
 
Old 10-09-2010, 02:22 AM
 
Location: Buda, Texas
799 posts, read 3,678,652 times
Reputation: 288
I'm talking about the preapproval I send with the offer. It is always for the amount of the offer instead of actual approval.
Quick reply to this message
 
Old 10-09-2010, 02:32 AM
 
Location: Texas
44,257 posts, read 64,062,141 times
Reputation: 73913
Quote:
Originally Posted by SkyeAnjel View Post
I'm talking about the preapproval I send with the offer. It is always for the amount of the offer instead of actual approval.
I think that's the best. My loan guy did that. He wrote up a new letter for each offer we placed. No reason to let the sellers see what you can afford.
Quick reply to this message
 
Old 10-09-2010, 03:35 AM
 
101 posts, read 305,638 times
Reputation: 40
If your realtor consistently shows you houses above your budget, or houses that do not meet your criterai, then as mentioned above - get a new realtor. An alternative is to set your sights on houses cheaper than your budget.. say 10% (pick any %age you are comfortable with). If you find a house for less then great, if you end up with a house alittle pricier then you are still within your budget.

I read somewhere that realtors are not particularly invested in negotiating the price down for you - they get a small reward for negotiating down for you. You on the other hand, have much more to gain form the price being negotiated down.

Having said that, why would you let your realtor negotiate for you? For the 3 houses I have closed on, I have always been the one negotiating the price - the realtor has been a consultant and has communicated the price to the seller.

Good luck with finding your new home.
Quick reply to this message
 
Old 10-09-2010, 07:16 AM
 
Location: Buda, Texas
799 posts, read 3,678,652 times
Reputation: 288
Quote:
Originally Posted by caliking View Post

Having said that, why would you let your realtor negotiate for you? For the 3 houses I have closed on, I have always been the one negotiating the price - the realtor has been a consultant and has communicated the price to the seller.
That is pretty much how I work, I know the list price is usually above what the seller really wants, I do a market analysis to be sure the house is priced fairly for the location, size etc.., then i let my buyer decide what they feel is a fair asking price and I give them an opinion on what I feel will be accepted..

Contrary to popular belief, it is not all about the price, it is also the terms of the contract..I can get a better price for my buyer if my buyer is not asking for a bunch of stuff..like closing costs, new carpet, appliances, etc..

A selling agents job is to get the best price with the best terms..sometimes accepting a lesser offer with easier terms is worth it to the seller then trying to meet the demands of a contract with alot more stipulations..
A buyers agents job is to get the home the buyer wants at the best price and terms also.
Thats what negotiation is, not trying to screw the other side but come to a place where both parties are happy with the deal and feel its a fair deal..

As for upselling a client, it is a bad idea...when I am working with someone, it is not just about them but everyone they know..If I treat them fairly, I am going to make alot more money in the future off the referrals..which is what we have to have to stay alive..
Quick reply to this message
 
Old 10-09-2010, 07:57 AM
 
1,632 posts, read 3,306,546 times
Reputation: 2074
Realtors that try and upsell their own clients are very short sighted. Seriously, are they going to be better off with an extra 3% of $20,000, or a very happy customer who will send over a referral?

I think most good realtors understand that repeat business and referrals are way more profitable than any incremental value they could get on a single contract.
Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


 
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Settings
X
Data:
Loading data...
Based on 2000-2020 data
Loading data...

123
Hide US histogram

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > Texas > Houston
View detailed profiles of:

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top