Two interesting phenomena as we look to buy a home (RE agent, appraisal)

[longislander2]

We are seeing two interesting things pop up as we look to purchase our next home:

1. We expressed interest in one property that has been overpriced and on the market for about 350 days. As soon as our agent inquired, we were informed by the sellers' agent that there is suddenly another all-cash buyer interested in the property. Surprise! Surprise! It's amazing how these competing buyers suddenly pop out of thin air on homes that have languished.
2. When we were selling our home, we were told that the comps were the Holy Grail in determining its listing price. Now that we are looking to buy and are doing some serious research on recent sales to establish an appropriate purchase price, we are being told by agents that the comps aren't really that important.

Does anyone wonder why the real estate business doesn't have a better reputation?

[EngGirl]

Get ready for realtors attact You just had a bad luck with realtors, because they were not from this forum and it looks like only realtors on this forum are good - the rest of them are not good

I agree with you. I called listing agent of the house I am interested in. It priced about $40K over recently sold houses within the same neighborhood (the same floor plan) and on the market for 5 months now. It was purchased 8 months ago for the price lower than asking price by $100K on the auction and "renovated"... According to zillow pictures posted before it was purchased, all renovation include new cheap fridge and paint outside... Anyways, I saw that house go into contract and within 2 weeks it came back with the same asking price.
So, I called to see what's going on. My guess house was appraised for less and buyer walked away. It wasn't a cash buyer.
So, I told them I am very interested and received - we have another offer on the table, all cash... 2 weeks later house is still on the market...

[MartinEden99]

Yeah, I'm in the same boat on the buying side and keep hearing the same nonsense despite not seeing any of these homes go under contract for the same reasons I didn't make an offer (i.e. they are overpriced because of the lack of inventory). I've bought & sold 4 homes over the past decade due to moving for my job and I always laugh at the schtick given by realtors in every market I've been in. All of them. They think you're stupid and can't see through their nonsense. I guess for the most part it must work with their average clientele otherwise they'd probably stop using the same talking points.

But I'm sure its just the "bad" realtors as we're always told. Not the many great realtors who will spend months of personal time driving a family of 4 around looking at $100k houses until they find just the right one for them. It doesn't matter they will only net <$1500 for all that hard work...they helped a family out & thats what their job is. LOL

Sorry to bash...I know realtors & while they are good people in my book...they also have a vested interest in getting activity in the market. And they are not above bending or extending the truth...even the good realtors.

[titaniummd]

Originally Posted by longislander2

We are seeing two interesting things pop up as we look to purchase our next home:

1. We expressed interest in one property that has been overpriced and on the market for about 350 days. As soon as our agent inquired, we were informed by the sellers' agent that there is suddenly another all-cash buyer interested in the property. Surprise! Surprise! It's amazing how these competing buyers suddenly pop out of thin air on homes that have languished.

So what did you do? There is always going to be a "mysterious buyer" that is introduced into the picture. It is possible that the market has just turned around, or someone wants to bluff you.

Did you make your offer anyways?

Originally Posted by longislander2

2. When we were selling our home, we were told that the comps were the Holy Grail in determining its listing price. Now that we are looking to buy and are doing some serious research on recent sales to establish an appropriate purchase price, we are being told by agents that the comps aren't really that important.

Does anyone wonder why the real estate business doesn't have a better reputation?

Did they tell you what was important, then? Was it...Zillow? Hahaha. There has been in an upsurge in values in many parts of the country. Maybe that is what they're referencing. Pending home sales that are well above the older comps.

Comparables are used for appraisals, still.

[MrRational]

Originally Posted by longislander2

Does anyone wonder why the real estate business doesn't have a better reputation?

Do you ever wonder why all of these things seem to happen only to you?

[manderly6]

Which agent told you comps weren't important? Yours or the seller's? If it was yours you should probably look for another agent.

[MikePRU]

Originally Posted by longislander2

We are seeing two interesting things pop up as we look to purchase our next home:

1. We expressed interest in one property that has been overpriced and on the market for about 350 days. As soon as our agent inquired, we were informed by the sellers' agent that there is suddenly another all-cash buyer interested in the property. Surprise! Surprise! It's amazing how these competing buyers suddenly pop out of thin air on homes that have languished.
2. When we were selling our home, we were told that the comps were the Holy Grail in determining its listing price. Now that we are looking to buy and are doing some serious research on recent sales to establish an appropriate purchase price, we are being told by agents that the comps aren't really that important.

Does anyone wonder why the real estate business doesn't have a better reputation?

The real estate business has a bad reputation because there are far more bad & mediocre agents out there than there are good ones. Don't give your business to these people and eventually they will leave the industry because they cannot make a living at it. The consumer shares some of the blame here as well as the industry groups and government regulators.

I can't tell you how many people have complained to me about their agent but then do nothing because they would "feel bad to fire them." I had one couple call me recently about maybe switching agents and they told me they would call me again in a couple of months because they wanted to give their current agent a fair shot (she's had the listing for around 8 months already). Meanwhile, homes in my town quite often sell in under a week and the majority sell in under 30 days. I think their current agent has had more than a fair shot at this point.

Also, to speak directly to your points . . .

1. That's happening quite a bit right now in my market. Properties that have been on the market a long time are suddenly getting multiple offers. Inventory is down across the country. There's nothing to choose from except for listings that have been around forever. Also, this agent didn't tell you how much the offer was. Low ball offers happen a lot as well. They could be lying but I know in MA if they did that they'd be putting their real estate license on the line by doing so and that would be pretty dumb over what would likely be a few hundred dollars in extra commission at most.

2. Comps are important but they're not the end all and be all because they lag behind what's actually happening in the market today. I know in my area there was a sudden decrease in inventory and that's created an extremely hot seller's market. Comps from 6 months ago are not going to reflect the increase in prices that I'm seeing right now. Those comps will not likely close for a few months.

Originally Posted by EngGirl

Get ready for realtors attact You just had a bad luck with realtors, because they were not from this forum and it looks like only realtors on this forum are good - the rest of them are not good

I'm not sure what your problem is with the agents here. For the most part, the agents that post here seem very client oriented, knowledgeable, and skilled. There are plenty of other good agents out there in the world but there are far more bad and mediocre agents out there. It's easy to have bad luck choosing an agent. The odds are not in your favor.

[NinaN]

Comps are important. Look at what sold in the last 6 month and add 10%. That's where we are right now. Even as an agent and seeing what is happening here, I see new listings and think "wow, that's way overpriced". Then it goes pending in 1 day.

I don't know where or when you listed your house for sale, but there's a good chance the market has done a major move since then.

And yes, homes that have lingered on the market are suddenly selling right now.

It sound like your agents have poor communication skills and aren't properly explaining what's happening right now, or they are and you're not listening.

[chet everett]

The OP and those with negative experiences from contacting listing agents with homes that are inappropriately priced are making an UNBELEIVABLY simple mistake -- the reason these homes are languishing is quite likely becuase the interaction between the seller and the listing agent is the MAJOR problem and trying to deal with either of them is NOT going to be productive. In a huge number of these situations there is some kind of family type relationship. Imagine this scenario: elderly aunt "hires" nice nephew / niece to "help me sell" my old home "for a good price" so I can retire to some place appropriate. Is that neice really the one to give objective wake up call that price is out of whack? Maybe it is not so dramatic -- just a brother-in-law that has been asked to help sister and husband get their place sold. Do you really think he risk alienating his family? The cousins will all get into a fight and the next Thanksgiving dinner will be a donnybrook...

If you contact the listing agent directly you get sucked right into a vortex of doom. It is all emotion and desperation. If you at least have a buyer's agent that you know will keep LOGIC and business sense alive then MAYBE there is glimmer of hope that a detached third party will get to shoulder the bad news that the windfall the seller was hoping for ain't ever gonna materialize. Instead the brother-in-law being the "bad guy" and forever having to gnaw on burned turkey wings he has a shot of laying the blame on "that son of gun from Acme Real Estate" so that he still has a shot of sitting at the grown ups table come turkey day....

Do some listing agents fabricate competing offers? Probably, but the degree to which some agents employ this tactic is probably proportional to the frequency with which some potential buyers also approach even a poorly priced listing not in a business-like manner but as some weird opportunity to do a "dance" about just how out of touch a specific asking price may be. The fact is that there is no "Edmunds Guide to Used Houses" and unlike trying to set a price on a five year old Chevy with eighty thousand miles on the clock but all new rubber,a battery that'll start 'er up on the first try in subzero weather and A/C that blows cold when it is 105 maybe one guy's odd little ranch with a Tuscan Villa theme in a subdivision full a bland tract homes really will catch the eye of another sympatico who can whip out the cash to buy his dream home and the "friend of a friend" agent really is using your legitimate and realistically priced offer to get the dreamer to get off the couch and head to Merril Lynch and liquidate enough shares of google to make this cash sale happen...

[Mack Knife]

Originally Posted by longislander2

We are seeing two interesting things pop up as we look to purchase our next home:

1. We expressed interest in one property that has been overpriced and on the market for about 350 days. As soon as our agent inquired, we were informed by the sellers' agent that there is suddenly another all-cash buyer interested in the property. Surprise! Surprise! It's amazing how these competing buyers suddenly pop out of thin air on homes that have languished.
2. When we were selling our home, we were told that the comps were the Holy Grail in determining its listing price. Now that we are looking to buy and are doing some serious research on recent sales to establish an appropriate purchase price, we are being told by agents that the comps aren't really that important.

Does anyone wonder why the real estate business doesn't have a better reputation?

I am not a proponent of the real estate industry (Realtors and REAs) but in this case, item #1 is plausible. That does go to your final sentence though.

Reas and Realtors often have "pocket buyers". These are potential buyers who have formed a business relationship (formal or informal) with the REA or Realtor. Their agreement is that when a certain property, or any property gets and offer or "interest" that potential buyer gets notified right away.

So you expressed interest and voila, that pocket buyer got a phone call and now there is that cash buyer in the wings. It happens and often.

You made a mistake of telling anyone you are interested. Telling the seller or seller agent you are "interested" only hurts you. I am curious, what do you think telling the agent you are interested would do for you? Offers matter and everything else is talk.

Likely too is that once you expressed "interest" the agent wanted to see if you are serious about making an offer or just throwing out that term to see what happens. Anyone can express interest. Does the other potential buyer have an offer in? Ask that question in direct terms.

Your agent also goofed. Any information your agent needed could have been obtained without notifying the seller of your interest. Either the house is for sale or it isn't. Most relevant information is public knowledge. If it is, then a showing should let you know if you want to proceed.

Never underestimate the discussions a seller and buyer agent will have and how much of that discussion you will never know about. That too happens, often and routinely.

In the end, expressed interest is nonsense and game playing. As a negotiating tactic it is the same. You've probably heard the saying, cash talks, BS walks. Interest is BS and a smart seller or buyer will know that.

Comps are valuable and you should use what your agent provides as a guide, not the holy grail. If an agent tells you that comps dictate selling prices, when you go to buy a home, remember that and see if suddenly things like that don't apply. I bet the story changes quickly.

Comps will influence the loan process though so don't simply discount them unless you are putting down an amount to remove that influence.