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Agreed. We just got an accepted offer on a property in a very hot market. We wanted to offer $20k over a threshold that we felt was where others would be, mainly to be sure we got the property. Our agent told us not to do it - to offer at or slightly over the threshold that we felt it would take to land the deal.
We offered where she suggested. We were high bidder by $1000 - it pays to round up!
Her contention was that why would we spend $20k more than we needed to?
This is why you need to listen to your agent.
-D
Just because the realtor's advice was spot on in your case doesn't mean their advice is right all the time. Did you not understand the post by Lockdev immediately prior to yours?
Well, I'm definitely not among any agents who might be feeding the frenzy now. I'd like it all to mellow out. I love to serve buyers, and buyers having to choose between crazy choices or getting nothing isn't fun for them or me.
It doesn't sound like either the OP or the Realtor are acting very knowledgeably.
Step-by-step process:
1. Most houses you find will never get to the point of submitting a bid. There are a million reasons that you can't see and can't find out, on your own, to not bid on a house. My realtor knew the age of the neighborhood, the age of the houses, the problems the houses were having, the problems the neighborhood, he knew the subpar builders of those houses, he knew what community changes were in the offing. He also had access to the additional info on the MLS not publicly revealed. He was able to articulate all the reasons to not bid in detail. If you have faith in your realtor, don't take it emotionally, move on to the next house. Otherwise, find another realtor. Do NOT think that you know better than your expert realtor! There is, unfortunately, just too much information that we have no access to.
2. Okay, we have reached the point where both you and realtor approve the house and area. Now the realtor does the real work. He looks at the comps, he looks at the age of the roof, mechanicals, what updates need to be done (if the house is ~20yrs old, the cost of updates may be prohibitive). He looks at listed, contracted, and final sale prices in the area. It is not rocket science, all these things have a number. The numbers are what your bid is built on. After a few bids, you will get to the point where you know the numbers as well as the realtor does. But you never, ever, EVER just pull numbers for a bid out of your a$$!
3. You submit your bid. It's a crazy market. Only proceed on the numbers. Before even placing the bid, you crunched the numbers, you have your lowest bid and highest bid. Do NOT deviate! Once the numbers become unfavorable, you have to keep emotions out of it, you walk away. The next perfect house will come along. There are 1.3 million houses for sale. Over 80% of that inventory is turning over every 4-7days. That is a lot of houses to pick your perfect house from.
4. You need to make your bid as attractive as you can to avoid a bidding war. Pre-approval is a plus. Having an EXPERT house inspector lined up, who for the right price will do the inspection ASAP, to allow you to agree to fewer days contracted for inspection and a quicker closing date (I paid my very expert, very booked, housing inspector double his regular rate. He did the inspection within 24hrs of my bid and gave me a report of all potential issues plus a spreadsheet detailing what it would cost to fix all potential issues in 48hrs). My home insurance adjuster was on speed dial to tell me if they saw any hiccups (it was an older roof, they came to inspect to determine if they would require a new roof). etc... etc...
Over 300,000 new realtors with no experienced flooded the market during the pandemic. 70% of the 1.5 million current realtors have never experienced a market such as we are going through today. Realtors are in the business to represent Sellers, that is easy money for them. Buyers need to perform due diligence to find one of those 3 in 10 realtors, who already have the tools and knowledge to REPRESENT THE BUYER. And get him the house he wants, for a value, that won't land him upside-down when the market cools.
HTH
OP, just find a different agent. You need an agent who is willing to work a little harder, or maybe one who is capable of explaining things to you in a way that is easier to understand.
Myself, I'd can an agent whose only input was to automatically offer $20,000 over list without any explanation about why..
Be very careful about any agency agreement you might have signed with that agent. You might have a contract that says you owe her a commission no matter what you buy. So I suggest that you get your agent to sign a release saying that your relationship is over before you buy anything, either using anyone else or buying a FSBO.
If I found a house that had been listed for two months in the market I am in, I wouldn't offer full price until I figured out why it hasn't sold. It might not work to go in with a crazy low offer, but I wouldn't automatically offer full price and most certainly wouldn't offer over asking price.
Last edited by oregonwoodsmoke; 06-23-2021 at 03:16 PM..
If the seller is telling his agent, don't bring me anything under full ask, then no, the buyers agent would be wasting his or her time writing up the contract.........
If the seller is saying "don't bring anything under full ask" then the buyer's agent can relay that information to the buyer instead of simply refusing to write the offer. Communication with your client is not a difficult concept.
And quite honestly , I would still not offer full price if the property wasn't worth the ask. I would expect my agent to write the offer I wanted to make. Sometimes a seller will change his mind about accepting a bit less when they see all the numbers written out in a good solid offer. And more than once I've known an agent to confidently relay information about what the seller or buyer wants when the seller or buyer said no such thing.
OP, if you are shopping for a super good bargain, you probably are not going to find it in this market. It's fine to be careful with your money and to try to get as much of your wish list as possible, but you aren't going to get a nice house for a price than makes all of your friends envious. If you want to buy, you are going to have to part with some of your cash.
Or else be more realistic about what you can afford.
If a real estate agent tells you to enter a bidding war, fire them.
I swear it's just like 2007 when it was real estate agents feeding the frenzy.
Just had it happen myself. Real estate agent told me to bid 50k higher than asking because there were tons of bidders and "bids are due Monday morning".
Want the rub? There were no bidders. The house is still on the market 4 weeks later and I'm sure will have a price cut, like other homes in the neighborhood have been having.
People come to us wanting to buy a home. We just help them accomplish their goal. We are advisors, not decision makers. If it's a multiple offer situation and the buyer wants to make an offer, why would that be the agents fault? Just_because you don't like something doesn't change reality. Myself andmost of my collegues around the water cooler would love the market to balance out some. Extreme markets are very stressful for everyone.
We've had enough multiple offer situations that if we're told it's multiple offers we need to assume it's true. I'm mostly a listing agent, and I think I've only had 1 listing in the last few months that didn't end up being a multiple offer situation.
Agreed. We just got an accepted offer on a property in a very hot market. We wanted to offer $20k over a threshold that we felt was where others would be, mainly to be sure we got the property. Our agent told us not to do it - to offer at or slightly over the threshold that we felt it would take to land the deal.
We offered where she suggested. We were high bidder by $1000 - it pays to round up!
Her contention was that why would we spend $20k more than we needed to?
This is why you need to listen to your agent.
-D
An escelation clause, while I don't love them, is better than just blindly bidding way over.
An escelation clause, while I don't love them, is better than just blindly bidding way over.
True, but there was only one other offer, and the seller's agent told us our offer was "solid". Again, we ended up $1000 over their offer, so you could say that even then we left money on the table. This is in a very hot southwestern market, so we wanted to try and nail things down the first time around.
RM
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Buyer's Realtor's Responsibilities
