When Making an offer on a house do you go by what realtor says? (Chandler: for sale, real estate)

[Sunshinegirl7]

Here we are again with a realtor that we like but we aren't stupid, so we have been viewing a lot of houses with her and getting an idea of what exactly we want and want to pay. When we find a house we are interested in she says she will pull the comps, Well I know how to look also for houses that are similar in the same area, what sold in that area, etc. I don't have the access she does but I do know how to look. We did look at a house that was priced $45,000 higher than what one a few houses with same specs sold for a few months ago and I told her it was priced too high and she said no, but then two days later she said Yes that house is priced to high I looked it up. So now we find a house that we LOVE and based on all the houses around it and within a few streets, I feel that it's priced about $30,000 to high. She told me NO it's priced very good, she keeps going by square feet and telling me by price of the square feet that is a good price. IT's updated yes but not anything fancy, they just put $15,000 in but all I see is new carpet, paint, counter top in kitchen and tile in the kitchen for backsplash. I love the house and I told her what I would offer and she said You won't get it and told me to offer $8,000 less than the price. I told her I don't think so. I am already annoyed with this, ok if I don't get it then I don't get it, I will move on. I remember when I heard someone say to offer list price or right below and when they did the agent said THEY LOVED the offer, ok that comment tells me a lot. That was not a house that didn't end up being bought by potential buyer because of stuff found out during inspection, so I want to make sure I do it right. I think I should say my offer and say that's final so don't even counter offer because she already said they will counter offer so my guess is she will say I was approved for so much more so I can pay it, I don't trust anyone when it comes to this, or should I? Is realtor business like a car salesman?

My ideal house would be a fixer upper with the right layout that I can have it eventually the way I want years down the road.

The areas we are looking are Chandler zipcode 85226 and Ahawautkee or in between. The house I found was in zipcode 85224.

[GeneR]

The quick answer is: No I wouldn't let the realtor decide what a house is worth to me. I was a real estate broker for a few years so here's my take on this.

I would ask the agent to show me the comps. I would ask the realtor to show me the history of sales on the property you are considering. That should include what current owners paid, how much of a mortgage they had, etc. That would tell me what the current owners owe on their mortgage. If someone bought a house in 2004-2008 you know they paid top price before the burst of the bubble. If they bought after that you might get a more honest picture of the current worth figuring very, very little appreciation since purchase.

Any good agent will give you any property sales and mortgage history you ask for. If they don't say good bye.

Also, have you signed a buyer representation agreement with your agent? This binds the agent to work on YOUR behalf, not the sellers. The agent also is bound (with or without an agreement) to present ANY OFFER you make whether they like it or not. As a buyer I look for an agent with a certification to be a BUYERS REPRESENTATIVE (ABR-which stands for Accredited Buyer Representative).

Your agent will be paid by the listing broker when a deal is complete. Chances are they will make anywhere from 2.5 to 3% of the sales price. They don't pocket that amount.....about half of that goes to their broker. So selling a house for 5-thousand or 15-thousand more isn't a huge gain in their income.

[Sunshinegirl7]

I haven't signed anything yet with her. The house was bought in 2005 for $390,000 and they want $308,800 right now for it, houses all around it are going for low $200,000's, some for $250,000's. the house was updated with new carpet, has a pebble tech pool, we saw some flaws like on the cement around pool it was peeling up a little and the windows were older, All paint was fresh but that can be any house. I think I should offer $285,000, when I told her before seeing it for 2nd time I went from $295,000 to $285,000 in my mind.

[KurtAZ]

I have found Realtors to be, or are becoming, more and more irrelevant as time goes on. You have Real Estate sites where you can do comparisons, you can get on the Maricopa Assessor's map and find out details about a property and there are some Realtors' sites that actually have a link to the active MLS that you can use at no cost. We listed a home we had as a rental and received more than enough attention just listing it on Zillow. Sure there are some contracts they handle...mostly listings and offers....but the title and mortgage companies handle everything else.

Our last agent we used advised us to make "over the list price" offers (this was about a year ago) even on new builds...the home we ultimately bought was at list price and using a mortgage, even though he told us we weren't going to get it without a cash offer. Take the things an agent tells you with a grain of salt.

[PhxMan500]

Gene's advice is spot on (though I would disagree with the dates of the bubble. Home prices have had a significant spike since 2011). Your representative ultimately will submit whatever offer what YOU want to present, but it is also her duty to not get your hopes up and give you a reality check if warranted. She should be willing to present valid reasoning on why she thinks the value is higher than you think, and there are many factors more significant than price per square foot.

Ultimately, this is your decision, and your agent works for you.

[AJSherant]

It is good you question what your realtor says. If they are skilled and know what they are doing they will be able to back up what they say with data. Comps are a matter of opinion but as a Realtor you should understand the market to make a more accurate judgment on value. The final say comes down to you as well...if you don't want to make an offer don't and if you know how much you want to offer stick with it!

[AlohaFriday]

Based on surrounding list prices, the house you're looking at sounds high.

However, keep a couple things in mind.

1. Comps are based on what has SOLD in the area, list prices are not really that relevant.
2. While you're in escrow, you will get an appraisal and that will help you feel good about your decision. Based on the appraisal, you can go through with the original offer, re-negotiate the price or walk away if it's not a good deal. Banks won't loan more than the appraised value, so that does protect you a bit.

Is the house you're looking at substantially larger than those that surround it? I'm wondering if that's why your Realtor says the price per square foot is good.

But if you don't like your Realtor, find a new one. This is too big a decision to feel like you're getting ripped off.

[Sunshinegirl7]

The house is 2377 Square feet with a 6778 square foot lot. The houses surrounding it are a tad smaller and the one right next door is for sale too and is 3 bedrooms not 4 and is $259,900 but has pretty much the same specs just the $308,800 has more square footage inside but smaller lot than the $259,900.

Are fixer uppers hard to find at GOOD deals out here? I really would love to find my own and pay $175,000 -low 200's and just put money into it and make it my own. I found one in Tempe that is $310,000 and they REALLY fixed it up like crazy and just bought it last year for $233,000 and put a new roof, all new inside cabinets, tile, etc. I LOVE the house but the front of the house is really boring, I am wondering if I could stucco an old house like that? or do something unique to spice it up? I would love to find a deal like that, do they exist right now in good areas?

[jimj]

You can still find deals but you will have to really put some time and effort in and probably widen your search area. From what I've seen out here in West Valley the market is flat at the moment and there still are some foreclosures to be had.
As for the house you're talking about now? If a significant amount of homes around it had sold near the $300k asking then your agent might have something but I'd say you've probably hit the price pretty much dead on.
I was once told by an AWSOME agent we had years ago "you don't get if you don't ask" which means there's only one way to get the price you're thinking and that's to offer it. Worst case they say "no".

One other thing (before it comes up) I always roll my eyes when I hear the sentence "well you don't want to insult them with your offer". I've heard this several times over the years on BOTH sides of a house sale.

It's business, if being offered money insults a person then they need to either 1.Stop doing business. 2.Allow someone who's comfortable doing business handle things.

[stevek64]

Originally Posted by Sunshinegirl7

I don't have the access she does but I do know how to look.

Unless she's writing the check to buy your potential future home, I'd tell her what I feel it's worth if my gut told me what the agent was telling me didn't sound right, as long as my offer was close/within reason to other recent comps and tell her write up the contract.....that's our offer. Sometimes agents seem to forget who they are working for. If an agent didn't listen to my needs in this regard, I'd find another agent and wish her the best.

Didn't she give you full access/a portal to the MLS to do your own comparison shopping/checking comps on current offerings? If not, I'd find another agent.

The agent we used was very open, gave us full access to the MLS to help us search when we were looking for homes.