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Wednesday, December 21, 2005

Another Offer Submitted (Updated)

I put in an offer yesterday on a condo that looks like it's in pretty good shape. The listing said the seller needed a quick close, which is what caught my eye. When I talked to the listing agent, I was a bit disappointed to learn that the seller was looking to close around the middle of January. That's almost a month away and not really what I would consider a "quick close." However, I submitted an offer anyway, at about $35,000 under the list price. Based on my research, that would still net the seller about $15,000. I haven't gotten a response yet, but they have until 4:00 PM today. I am preparing myself mentally for the "this offer is ridiculous" call. I plan to point out that my offer is not contingent on financing and is about as close to a sure thing as one can get. I won't be falling out of escrow.

The previous property I made an offer on is still for sale. If it's still available tomorrow, I will submit another offer. Supposedly, this is another seller who wanted a quick close.

UPDATE: Just got the call and yes, the exact words used were "ridiculous offer." I made my speech about my offer being a sure thing and the agent said sarcastically, "and all she has to do is give up $35,000 of equity." I replied "She wants a fast close and everything comes with a price." (By the way, I came up with my figure by taking 76% of the listing price.)

One thing she did say was that the fact that I was not using an agent would not save the seller 3% commission because she had a listing agreement that specified she would pay 6% commission no matter what. Well, either the seller signed the worst listing agreement in history or that agent is lying. The listing agreements I have seen say the full commission will be paid to the listing agent only if the agent also acts as a buyer's agent. She would not be acting as my agent and therefore should not get paid for doing so.

Oh well.. Another one to put in the file for follow up in a week or two.

5 comments:

Anonymous said...

Shaun,
This is a fantastic blog. I appreciate the candor and the true life drama that you've been posting about. Also, you've made me see why my wife and I would not be able to do this right now. We're having trouble with our own house and I don't know if I'd be able to put up with the headaches you are. Thanks so much and keep up the good work.

Dunwoody1015 said...

Shaun,
For the ones that you send in another offer on, I like to drop my price everytime I send in a new offer. I usually send in a new offer once every thirty days the property sits on the market. I love it when the agent calls me back and says, "Are you serious? The seller didn't accept your first offer why would you send in a new offer even lower." I say, "I don't think the property is worth what it was 30 days ago. You should have taken my first offer." :))

I have had them come back and we eventually negotiate something in between. However, it does get the message across that I am here ready to buy this property and every day you wait to accept my offer you lose money.

Trisha#1 said...

Regardless of whether your offer is satisfactory to the agent, I don't think they should be so snide. The truth is, they never know who they're dealing with. And, besides, everyone deserves to be treated with respect!

It seems like the agents you've talked to are trying to shame you into increasing your offer.

Shaun said...

Anon - Thanks for the kind words. No one is going to give you money for free, so anytime you try to make more, you should expect some headaches. It becomes easier to handle if you look at yourself as a problem solver. You take care of the headaches other people don't want to deal with. Still, you need to have the right temperment :-)

Dunwoody - Interesting. I was actually thinking of slightly raising my offers, but you have a point. I don't expect these properties to sit around as long as 30 days, so I don't know if I will be able to have that sort of pricing power.

Trisha - She was a bit snide, but she did make an effort to close on a friendly note and she wished me a Merry Christmas. The way I look at it is it's their job to get the best price for their client, so if they try to get me to increase my offer via shame, so be it. They're just using the tools they have available.

To be fair, I am somewhat embarrassed by my offers, so the agent is able to shame me - I just live with the shame and don't change the offer :-) It was either Kiyosaki of Dolf DeRoos that said if you aren't embarrassed by your offer, you're offering too much...

Brandon said...

The agent probable wasn't lying about the contract having a 6% total commission regardless of how it sells. Its built in to the promulagated contract that is mandatory for realtors to use. Its not mandatory for the public. The owner can write their own contract and require the agents to use their form (think reo forms). Or they could just rewrite that portion of the listing agreement.
As always consult your attorney.

The other agent is ALWAYS going to not like the low offers, as if they look bad presenting it to the seller. If the agent is getting steamed with you just think what they are advising there client to do. I have have seen a well written letter to the seller explaining the offer and why its fair turn a "hell no" from the agent to a "ok" from the seller. Sometimes you have to get to the source to determine the solution.

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