Should I Get a Real Estate Attorney Instead of Using My Buyer's Agent? (Terrell: loan, new house)
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I've seen so many homes, and in cases in which my agent has stated a verbal offer that is in line with the comps (the comps usually being lower than the asking price), the sellers have rejected it flat out--saying that the comps do not apply to their particular home, because it's so unique, etc. etc. I'm sick of hearing that. A related issue is that some of these homes are historical, and need almost EVERYTHING done to them, and the sellers have asking prices in line with similar homes that have already been fixed up.
About 80% of the properties I sell were built before 1930 and I have a lot of experience with sellers of historic/old houses. Not having your own agent wouldn't help your offer be accepted. If your agent called me with a verbal initial offer on a listing, my sellers would never take your offer seriously. It would be rejected without further consideration 99% of the time. There's a lot more to an offer than the sales price; sellers want to see that offer. It's much easier to brush off a verbal offer. Give them something they can hold in their hands and see with their eyes. It's all about first impressions. Once you have the seller's attention, then you can consider working verbally - keeping in mind that you don't have a deal until it's in writing and both parties (you and the seller) have been notified that you have a contract. Is there a reason you're making verbal offers?
With regard to historic properties, you're right - there should be a noticeable (and sometimes significant) price difference between a fixer-upper and its move-in ready counterpart. Some of those houses need all the work you can imagine and some are fully rehabbed. Depending on the house and your tastes, you could be looking at $100K to rehab. You mention electrical and HVAC, but don't forget foundation work, plumbing, perhaps some roof work; you may want a bigger kitchen or an extra bathroom. I could keep going...it adds up.
While I'm on the subject, I had an interesting situation with a listing I just sold (built in 1874 with an amazing view of downtown). When you get an offer accepted and it's time for the inspection, make sure the inspector has experience with old houses. (Hopefully you chose an agent who has a lot of experience with historic homes.)
From a previous thread I have some idea of where you've been looking. Have you expanded your search at all, geographically?
Again, thanks for your advice. Kevin, I would not try to cheat a listing agent out of their commission. I was only thinking that going directly to the listing agent would help my offer be accepted in a situation in which a seller is having a difficult time selling his or her home, and the listing agent would not have to split the commission with a buyer's agent. I appreciate your advice. It does seem to be sound and I am rethinking the idea of going it alone.
Oh, don't get me started on "comps". I've seen so many homes, and in cases in which my agent has stated a verbal offer that is in line with the comps (the comps usually being lower than the asking price), the sellers have rejected it flat out--saying that the comps do not apply to their particular home, because it's so unique, etc. etc. I'm sick of hearing that. A related issue is that some of these homes are historical, and need almost EVERYTHING done to them, and the sellers have asking prices in line with similar homes that have already been fixed up. When I THINK and do the math concerning the tens of thousands of dollars it will take to get the homes in modern working order (new electrical, A/C and duct work, etc.) if I were to tack that amount on to the inflated listing price, the home would cost way more than the neighborhood can support, and a buyer at that price would not be able to sell in the next 20 years without losing money. All of this just to say that there's some logic involved in the "lowballing" that one sees going on.
Thanks. I'm glad that you didn't take offense. Too many times these real estate threads turn ugly, because people take offense to what I, and others say, but the reality is that myself, Sylvie and a few others on here are in the trenches every day, so while everyone thinks their situation is unique, it's not. There's really no unique situation. We see this stuff every day and know how it'll play out.
For comps, they're different for each property. For newer homes, they're pretty easy to do. For a lot of historic homes, I don't even bother with them, as each is SO different that you can't really determine what comps are. Last year alone I sold two in King William like this. I had one priced at $2.8 million that comps told me should be $800,000, but there was absolutely nothing like it in Texas. Buyer agreed and paid a ton for it (can't disclose sales price on that one). On another, I had it listed at $1.5 million. The agent I competed against told him that he'd have to price it at $800,000 based on comps. I sold it for full price in a little over three months. (I don't ONLY sell those level of homes - but they're the best examples).
The bottom line is a home is worth what someone's willing to pay. Sometimes it's more than comps, sometimes less. The best thing to do is find a buyer's agent that you TRUST and that "gets" you and what you're looking for. Use someone with experience. I hear a lot of horror stories about Realtors, and they're usually pretty accurate, but when you dig deeper, you find out that they were using a friend's sister's cousin, or the first person they called off a sign and just blindly trusting them.
Sometimes that works, but the best thing to do is interview a few and go with your gut feeling, because it rarely leads you wrong.
In many ways, the Real Estate Agent industry is a Syndicate. Realtors(R) don't like change, and invest a great deal of money so things don't change.
The MLS does provide good information to properties available, and market values.
I totally agree, and always use independent inspectors and appraisers who aren't part of the food chain. Only a real estate lawyer will look out for your interests and no one has an absolute lock on the truth.
Glad the OP is reading all the threads before doing anything.
Only a real estate lawyer will look out for your interests and no one has an absolute lock on the truth.
This is a lie. Either you're horribly uninformed, or have had a bad real estate experience. Either way, what you've said is a flat out lie.
The contract between the client and Realtor is VERY implicit in stating that by signing, the Realtor is acting SOLELY in the best interest of the client. Realtors encourage clients to kill deals EVERY DAY, that would benefit the Realtor, but aren't in the client's best interest.
We're contractually obligated to act as their fiduciary, and can be taken to court if we don't. We're in a heavily regulated industry, and while you may hear horror stories, the top agents in town, for the most part, are some of the most ethical people I've ever been around.
One question, Kevin, related to your post stating that the 1.5 million dollar property appraised. Does that suggest that if the home had been listed for $800,000 (in line with the comps), and optioned for that amount, that an appraiser would have come in and miraculously appraised its value at 1.5 million? (i.e., what evidence would there have been to appraise it that high?) I would think not, which makes me question the apraisal process and kind of confirms what the poster above said about the real estate industry being a syndicate.
Actually, Proffer, even *I* can answer that - especially with the new rules/laws pertaining to appraisers. They have to follow a pretty strict set of guidelines now, and if they "fudge" the appraisals can actually get themselves into some pretty severe hot water. Was it done before? With some of the bigger builders, without any doubt in my mind. With the individual sales, to an extent, because the Realtors all knew who the more "generous" appraisers were - but to suggest that even under the "old ways" they could essentially double a home value....nope. I've seen first-hand where an appraisal would come in under (or over) a contract price. If over, everyone was happy - if under, then the buyer would either have to come up with the difference in cash, or the seller would have to lower the price to the appraised value.
Sorry to burst your theory there.....
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