But yet, another real estate horror story (listings, sellers, fee)
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You had your home listed at $339k and you had an offer at $310k. That is only 9% below the listed price. That was a good offer, provided that the buyer was qualified or pre-approved, with a good earnest money deposit, and reasonable down payment.
In my opinion, that was a good offer and should have been countered, and you may have ended up with a sale at around $322.
At that time the market price was probably around $339. The buyer made a reasonable offer of 10% below listing price and most likely had a target of 5 to 6% below list. Buyers are looking for bargains, and your buyer probably perceived your home to be worth more than 339, but still made an offer within a reasonable range of listed price. The recent appraisal of $370 should have been used (and perhaps it was) as both a marketing tool and a negotiation tactic.
If a home is priced at or slightly below market price then a home in a good location and in good condition, comparable to the area, should sell within the average days on market in your area, and within 5% of the listed price.
However, if the market is rapidly declining then if it's listed right at market price (what the other Solds were priced at) then the market could drop below you during that average DOM time.
As has been stated no one should guarantee that a home will be sold within a given amount of time because there are too many variables in this market where the inventory exceeds demand. Your realtor may very well have thought that the home could sell during that time.
From what you've said, it appears that the agent had the home priced about right in the beginning; you missed an opportunity to negotiate a fair price; and the market just dropped out from under you.
I'm sure you realize that a big part of your headache and frustration was caused by buying the other home prior to getting this one sold. You're not the first one to do that, and won't be the last.
Do you really have to sleep in that empty house? That in itself can cause you a lot of misery.
What I suggest is that you ask your agent to do a new CMA for you. Look at the Active (competition) the Pendings (under contract-not closed) Solds (escrow is closed and this is where the market currently is) and the Expired (prices at which people couldn't sell their home and they took it off the market.
Also look at the average percent of Sold price to final Listed price. That tells you about what to expect if your home is listed near the current market price.
She should do that for you at least once a month. She may have a good idea in her mind of what's happening, but you need to see it on paper.
If there are other vacant comps in your area, have your realtor take you to visit them so you can have a good idea of what your competition is like.
I need to explain the contract i have with her. Im not really sure but here's what i have. I paid her $1000 up front,this covers all advertising open houses,it appears like a normal listing to me,she does it all i think. Commission then is 3.5%. She gets the $1000 no matter what and what ever realtor sells gets the 3.5%. Saves me money, i think! This is thru Global marketing.
I have flat rates and there is NO WAY on this planet that someone can provide all of those services for $1,000. You are not saving any money here, and in fact I think you just cost yourself a lot.
Other problems i feel,ive never seen a contract from either bids, she has counter verbally? Very hard to get on the phone, has shown up on a saturday for open house, no notice to me, no input on open houses, whats good or bad that i can improve on or how many showed up,one nite at 730 a agent shows up for a showing i didnt know, she said your realtor didnt tell you? Nope. And of course last nite she didnt show after calling me at 4 saying the $285 was coming over after work to look again, i waited till 930 with nothing not even a call.
We don't do verbal negotiations here in OR. That is concerning to me. This is not the "real estate way." You need to sit down and look over your listing contract and see what it says. I also suggest you look over the state agency disclosure form that she gave you and see what her fiduciary duties are to you. Then I suggest you have a conversation with your agent.
Other problems i feel,ive never seen a contract from either bids, she has counter verbally? Very hard to get on the phone, has shown up on a saturday for open house, no notice to me, no input on open houses, whats good or bad that i can improve on or how many showed up,one nite at 730 a agent shows up for a showing i didnt know, she said your realtor didnt tell you? Nope. And of course last nite she didnt show after calling me at 4 saying the $285 was coming over after work to look again, i waited till 930 with nothing not even a call.
We don't do verbal negotiations here in OR. That is concerning to me. This is not the "real estate way." You need to sit down and look over your listing contract and see what it says. I also suggest you look over the state agency disclosure form that she gave you and see what her fiduciary duties are to you. Then I suggest you have a conversation with your agent.
Verbal offers are fairly standard here.. Verbal contracts.. Never..
Not a chance I want to drive back and forth to see my realtor (or have them drive) 4-5 times during an offer/counter process.
I always make an offer over the phone, with a 24 hour period after acceptance of that verbal offer to get together to sign an official offer and hand money. If I cant trust the realtor and/or the seller enough to wait 24 hours to get a contract and hand money in hand, without them changing the offer, then its a sure sign up front that its someone I dont want to deal with, signed or unsigned contract.
Sorry for your disappointment, and please help me understand. You paid $1,000 up front, to cover the marketing expense? That is the first I ever heard of that, and certainly not the normal that I have seen. I would love to get listings that way and could make several promises,ecpecially with being paid up front. I always or usually agree with the Captian, and with a good agent, and proper comps, you should have some peace of mind, and why are you spending nights at the old house?
Sorry for your disappointment, and please help me understand. You paid $1,000 up front, to cover the marketing expense? That is the first I ever heard of that, and certainly not the normal that I have seen. I would love to get listings that way and could make several promises,ecpecially with being paid up front. I always or usually agree with the Captian, and with a good agent, and proper comps, you should have some peace of mind, and why are you spending nights at the old house?
If an agent wanted $1,000 up front, I'd scratch my head trying to figure out why I just shouldnt spend $1,000 in advertising costs on my own...
I've never heard of taking money up front to market a property, and then only making $1000 (minus brokerage, minus taxes) off of the sale. I'm not sure how this agent plans to cover all of the marketing expenses with that $1000. I would ask for an itemization, if I were you. In addition, if she is only making $1000, no matter what price you sell your house for, what incentive does she have to go above and beyond, to be available to you, and to get you the best price for your home? She has absolutely nothing invested, so she has nothing to lose. You, on the other hand, do.
One more thing, if there is a large concentration of distressed properties in your area (foreclosures, pre-foreclosures, etc.) then they will most certainly bring down the values of the surrounding properties. It is quite possible that your agent is well aware of the state of your market with regard to distressed properties. If that is the case, then it should been an issue prior to listing, and she should have shown you data to present a realistic picture of your market prior to listing. Sorry to say it, but if you are in an area saturated with distressed properties, then your chances of selling go decrease. Assuming that your agent was aware of a situation like this, then no wonder she took $1000 up front. If that was the case, she knew she wasn't going to sell it!
Growing up my father always taught me to offer low so that it will open up a negotiation. When my husband and I were in the process of buying our first home, we used this strategy and we were surprised to hear that the seller had gotten emotional about it, started to cry, and turned down the offer without a counter-offer. Note, that this was not during the current market down turn where I expect more sellers to be emotional.
As I read more threads about low ball offers, current real estate horror stories, etc. where it doesn't appear that the sellers are counter-offering, I do wonder why. I asked my husband if he had any thoughts - like could it be a certain age group that were not taught/versed in negotiation? I am grasping at straws and don't have an answer myself. The only thing my husband offered was that negotiation is a skill commonly used among everyday people in other countries, but not in the US.
Jaindow makes an excellent observation here. Our society is accustomed to fixed pricing. Grocery stores, gas stations, car wash, beauty salons; you name it and it's all fixed prices. New homes were in this category until recently.
The exceptions have been flea markets, garage sales automobile sales, and resale houses, where negotiating is common place. And how often does the average person participate in any of these purchases? Very seldom of course. Negotiation is not taught in school, just as money management is not taught in school. In fact one of my grand daughters doesn't like math. She said she doesn't see the use for it. She told me that if they were teaching her uses for the math such as money management that she could relate to, then she would like it better.
As Jaindow said, many other countries negotiate most everything. I spent over 35 years traveling to foreign countries and in the beginning it was difficult for me to grasp the negotiation process. But I quickly learned that they treat it as a game. They enjoy the process and become highly proficient at it.
Also, people in the U.S. farm areas, I'll use Tennessee because I'm from there, are very proficient at negotiating because they do it all the time. They sell horses, cows, farm equipment, and all kinds of other used items. They really enjoy the process.
I remember my cousin wanting to buy a horse that my dad wanted to sell. The horse was worth about $1,000. My cousin told my dad that he'd give him $25 for that "ole nag". My dad told my cousin that he wouldn't even know how to ride a horse of this quality. (My cousin rode Tennessee Walking Horses in competition, and he was a horse trader.)
Neither was insulted; they enjoyed the banter and good natured insulting. They both knew the game and they played it well. My cousin knew the value of horses and he was always out to get a bargain. They ended up making a deal for $700. My dad was happy to get rid of the horse, and there was room for my cousin to turn around and sell the horse for around $900 to someone else. Trading was part of how he made his living.
I still haven't mastered the game of negotiation, but I keep trying, and every day I learn something new.
Pghquest, I'm flattered that you agree with me 100%. Seriously. I also agree with a lot of things that you post.
I just read the op's explanation of the compensation agreement, and I'm concerned.
A realtor can ask for a retainer, but most don't. One can ask for $1000 up front to cover expenses in case the home doesn't sell, and have the $1000 credited against the commission when it's sold.
This isn't the case however. The agent is only getting $1000 period, if someone else sells the house. So it's a money losing situation for her, unless she sells the house herself. That is troubling, in my mind.
It is only a small percentage of homes where the selling agent finds the buyers. Selling agents try to find them but their main job is to market the home to thousands of other agents and home buyers so the odds are greater that one of those thousands of other agents will bring the buyer.
However, if the selling agent has a buyer that wants to buy a home at a bargain, and if the agent were to convince the seller that their home was worth less now, then the selling agent may very well increase the odds of bringing the buyer. I'm not saying that is what is happening, but it something possible for an unscrupulous, dishonest agent.
She hasn't brought you any of the offers, and doesn't show when promised. It appears from your statements that she is violating her fiduciary duties to you.
You really need to see the comps in your area. You can call other agents. Ask them to come over to view your property and discuss the possibility of taking over the listing if you cancel it. Do not give any details about the other agent's activities to them. Do not talk about the other agent at all. Just say that you are contemplating making a change. That's all you say.
What you want from these agents is a presentation on how they will market your home, and ask for a CMA that includes the Actives, Pendings, Expired, Solds within the past 3 months.
Talk to about 3 agents from different companies. It's important that you have a feeling of trust; that they are providing you with the comps that you need and are telling you what the market is doing; that they don't promise you a high price; and that they have an aggressive written market plan.
If you find that these comps do not agree with what the agent was trying to get you to sell the home for, then send a letter (or hand carry it in) to her broker detailing the reason for canceling the listing, and get the broker to release the listing in writing. The listing belongs to the broker and can only be released by the broker in writing. Don't accept a verbal.
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