Seller/developer claims to have a competing offer on house that we're interested in, the day before we're due to meet with her-- is this suspicious?
April 15, 2011 9:18 PM Subscribe
Do real estate sellers ever falsely claim to have a competing offer to drum up a sense of urgency and drive up your own offer? That would be really unethical, right? But is there any way to verify their claim of another offer?
My spouse and I are in our late 20s and have started thinking about buying a house (a townhouse in Philadelphia, if it matters). We've been meaning to enlist the help of a professional to represent us as buyers but for now we've just been going to open houses on weekends. Last week we saw this one house we really, really liked and which we could see ourselves buying. Some details about this property: it was built new in 2007 and has been intermittently on and off the market for three years with no buyer. The price has come down 15% since then. I think it's a great house but I can understand why the developer has had trouble selling it: it's a relatively large and opulent and yet in a run-down neighborhood. It's not very child-friendly and yet it's in a place in which a lot of buyers of large houses have families. All this is to say that I think the long time on the market is explainable but it could be a great buy for the right person.
After meeting the seller/developer (same person) at the open house we decided to make another appointment with her so that we could get more specifics on this property. Since my mother has offered to help us out financially, and we want to include her in the selection process, we have also invited her along; this was also going to be an opportunity for her to take a first look. Earlier this week we scheduled a visit for tomorrow, Saturday. Just tonight the seller wrote asking us to give her a call. In the call she said that 1) she had received another offer on the house and that 2) she hadn't accepted it yet and was still really interested in us, and that 3) we were still on for our meeting and visit tomorrow. My initial reaction of aaahhh, there's been another offer, we need to act quickly! was followed by a sense that the timing was fishy. This house sits on the market for 3 years and just tonight she gets an offer?
The seller knows we're very interested and also can probably tell that we're inexperienced. We weren't intending on moving that fast and suddenly my spouse (who really loves this house) is scheming about how to outbid this phantom competitor. So my questions are:
-is this other offer likely to be real?
-do real estate agents actually make up competing offers? I would think that professional ethics would bar this but I've seen it happen before (in a rental situation though). can we ask her to verify it-- or better yet, can we verify it on our own?
-what kinds of questions should we be asking? would getting a real estate agent to represent us be helpful at this stage?
One possible scenario I can imagine is that the seller uses the low price to make it look like a steal, and then tries to nudge it up by trying to get you to outbid the fake bidder. The asking price really is remarkably cheap (and much lower than what it was 3 years ago).
Thanks for any guidance.
My spouse and I are in our late 20s and have started thinking about buying a house (a townhouse in Philadelphia, if it matters). We've been meaning to enlist the help of a professional to represent us as buyers but for now we've just been going to open houses on weekends. Last week we saw this one house we really, really liked and which we could see ourselves buying. Some details about this property: it was built new in 2007 and has been intermittently on and off the market for three years with no buyer. The price has come down 15% since then. I think it's a great house but I can understand why the developer has had trouble selling it: it's a relatively large and opulent and yet in a run-down neighborhood. It's not very child-friendly and yet it's in a place in which a lot of buyers of large houses have families. All this is to say that I think the long time on the market is explainable but it could be a great buy for the right person.
After meeting the seller/developer (same person) at the open house we decided to make another appointment with her so that we could get more specifics on this property. Since my mother has offered to help us out financially, and we want to include her in the selection process, we have also invited her along; this was also going to be an opportunity for her to take a first look. Earlier this week we scheduled a visit for tomorrow, Saturday. Just tonight the seller wrote asking us to give her a call. In the call she said that 1) she had received another offer on the house and that 2) she hadn't accepted it yet and was still really interested in us, and that 3) we were still on for our meeting and visit tomorrow. My initial reaction of aaahhh, there's been another offer, we need to act quickly! was followed by a sense that the timing was fishy. This house sits on the market for 3 years and just tonight she gets an offer?
The seller knows we're very interested and also can probably tell that we're inexperienced. We weren't intending on moving that fast and suddenly my spouse (who really loves this house) is scheming about how to outbid this phantom competitor. So my questions are:
-is this other offer likely to be real?
-do real estate agents actually make up competing offers? I would think that professional ethics would bar this but I've seen it happen before (in a rental situation though). can we ask her to verify it-- or better yet, can we verify it on our own?
-what kinds of questions should we be asking? would getting a real estate agent to represent us be helpful at this stage?
One possible scenario I can imagine is that the seller uses the low price to make it look like a steal, and then tries to nudge it up by trying to get you to outbid the fake bidder. The asking price really is remarkably cheap (and much lower than what it was 3 years ago).
Thanks for any guidance.
You can never verify anything an agent tells you, don't let the seller drive your offer. 3yrs on the market and only down 15%? They're not serious about selling.
Play your "walk away" card. Don't burn the bridge, just play the card. Show them you aren't going to be pushed around. There are lots of perfect houses out there.
posted by rhizome at 9:42 PM on April 15, 2011 [3 favorites]
Play your "walk away" card. Don't burn the bridge, just play the card. Show them you aren't going to be pushed around. There are lots of perfect houses out there.
posted by rhizome at 9:42 PM on April 15, 2011 [3 favorites]
Response by poster: Hey thanks, this is very helpful to hear. To clarify the seller's position: this person is a developer who bought the property as a run-down wreck, rebuilt/renovated it, and is now trying to sell it. She's the realtor and the owner. And, in a twist, she lives right next door to this place: she bought and fixed up two row houses and now lives in one. So if we actually bought the place we'd be buying her as a neighbor. Hard to believe that she'd tell blatant lies to a possible neighbor, but maybe that's the way it is.
posted by ms.codex at 9:52 PM on April 15, 2011
posted by ms.codex at 9:52 PM on April 15, 2011
There are many, many savvy buyers who refuse to participate in a bidding competition. After looking at the house tomorrow, I would politely tell the agent that you are one of those people. "We're not interested in placing a competing bid. If your other offer doesn't pan out, let us know." Our county tax assessor's website allows us to pull comps in the neighborhood, check yours to see if you can. You want to compare the cost per square foot to other properties sold recently in the same neighborhood, and use that information to determine the fair market value. Memail me if you need further info on that, as that would be the main indicator of what you should pay. Your offer should be at least in the mid range of those comps, no matter how much nicer the property is than the rest of the neighborhood.
posted by raisingsand at 10:00 PM on April 15, 2011 [6 favorites]
posted by raisingsand at 10:00 PM on April 15, 2011 [6 favorites]
Run, don't walk, away. There are lots of places for sale. Take your time. This "other offer" will most likely "fall through" (unless someone else falls for that crap).
I had a similar experience when I bought my place years ago. My friend told me to ask if there were any other offers and, if not, offer 10% below asking. My buyer's agent (who's supposed to be working for me, but actually gets paid more if I overpay), sat my wife and I down and gave us a presentation about what a great deal it was, and we should really offer full price for it. I was a very painful decision, and very difficult to get my wife on board, but we stuck to our offer, and it was accepted. I love our house, but, in retrospect, I wish we looked around more.
Please, take your time. The market is not going to take off again any time soon, so don't rush yourselves.
posted by electro at 10:05 PM on April 15, 2011 [1 favorite]
I had a similar experience when I bought my place years ago. My friend told me to ask if there were any other offers and, if not, offer 10% below asking. My buyer's agent (who's supposed to be working for me, but actually gets paid more if I overpay), sat my wife and I down and gave us a presentation about what a great deal it was, and we should really offer full price for it. I was a very painful decision, and very difficult to get my wife on board, but we stuck to our offer, and it was accepted. I love our house, but, in retrospect, I wish we looked around more.
Please, take your time. The market is not going to take off again any time soon, so don't rush yourselves.
posted by electro at 10:05 PM on April 15, 2011 [1 favorite]
I am no expert but I have bought and sold homes, and from what I have read and my experience, in a down market like this one, you should not be offering at the asking price, not to mention ending up paying above the asking price due to a bidding war.
rhizome is right - you should always be ready to walk away from the deal, and show it, so they know that you are serious and you will be an effective negotiator.
If you love this house, don't say so, but make an offer that's 10-20% below the asking price. Ignore the talk of the other offer and if they counter by saying that the other person is willing to pay the asking price, just say "all right, well, let me know if it doesn't work out with the other person."
Not only might the other buyer not be real, but not all buyers are created equal - they probably would rather have you buy the place. Especially if the realtor lives next door, she has a vested interest in having good/nice neighbors. If you are good/nice people and you have decent credit and are pre-approved for a mortgage, you have a lot going for you, and this realtor is going to be drooling over the prospect of finally selling this house. Remember that you have the upper hand and play hardball!
posted by treehorn+bunny at 10:14 PM on April 15, 2011 [1 favorite]
rhizome is right - you should always be ready to walk away from the deal, and show it, so they know that you are serious and you will be an effective negotiator.
If you love this house, don't say so, but make an offer that's 10-20% below the asking price. Ignore the talk of the other offer and if they counter by saying that the other person is willing to pay the asking price, just say "all right, well, let me know if it doesn't work out with the other person."
Not only might the other buyer not be real, but not all buyers are created equal - they probably would rather have you buy the place. Especially if the realtor lives next door, she has a vested interest in having good/nice neighbors. If you are good/nice people and you have decent credit and are pre-approved for a mortgage, you have a lot going for you, and this realtor is going to be drooling over the prospect of finally selling this house. Remember that you have the upper hand and play hardball!
posted by treehorn+bunny at 10:14 PM on April 15, 2011 [1 favorite]
A lot of this depends on what you are shopping for. Just for the benefit of others on this thread, in our area anyway there seems to be a bit of competition for investment homes-this would be from folks trying to score major deals.
Whether or not there is an actual other deal on a house, train yourself not to fall in love with a specific house. Best thing to do is make the offer you can live with, and if someone else makes a better offer, so be it. There are lots of other houses out there these days! It is okay to negotiate to a point (and a good realtor WILL be a good negotiator-by all means shop for one)but no, you do not need to get into a bidding war in most markets these days.
(hubby is a realtor and this is what I am observing. I myself am no expert but he has been in the business over a decade.)
posted by St. Alia of the Bunnies at 11:10 PM on April 15, 2011
Whether or not there is an actual other deal on a house, train yourself not to fall in love with a specific house. Best thing to do is make the offer you can live with, and if someone else makes a better offer, so be it. There are lots of other houses out there these days! It is okay to negotiate to a point (and a good realtor WILL be a good negotiator-by all means shop for one)but no, you do not need to get into a bidding war in most markets these days.
(hubby is a realtor and this is what I am observing. I myself am no expert but he has been in the business over a decade.)
posted by St. Alia of the Bunnies at 11:10 PM on April 15, 2011
There's really no reason for the seller to stop showing the house just because she has an offer. Lots of offers tank at some point and continuing to show the home is to her advantage. For instance, she could have an offer but the buyer has no chance of getting decent financing. There are tons and tons of reasons that an offer is never going to yield a purchase.
Go, take a good long look.
Here is what you need to share with your spouse. You do not want to overpay for a house. If you overbid, you get to overpay each month for the next 30 years. So yeah, you might lose a house or two to people who overpaid. That's better than paying out and being upside down on a house you cannot sell. It's hard, but don't get emotionally attached to houses during the search/offer/mortgage process. There are too many ways the deal can go sour - not the least of which is you overpaying because you LURVE that one house.
posted by 26.2 at 11:42 PM on April 15, 2011 [1 favorite]
Go, take a good long look.
Here is what you need to share with your spouse. You do not want to overpay for a house. If you overbid, you get to overpay each month for the next 30 years. So yeah, you might lose a house or two to people who overpaid. That's better than paying out and being upside down on a house you cannot sell. It's hard, but don't get emotionally attached to houses during the search/offer/mortgage process. There are too many ways the deal can go sour - not the least of which is you overpaying because you LURVE that one house.
posted by 26.2 at 11:42 PM on April 15, 2011 [1 favorite]
Our county tax assessor's website allows us to pull comps in the neighborhood, check yours to see if you can. You want to compare the cost per square foot to other properties sold recently in the same neighborhood, and use that information to determine the fair market value.
This. You may be amazed at the amount of information you can find online about what people have paid for houses recently.
You need to know two prices:
1. the max price you can pay. To find this, you need to look at your budget and your savings to figure out what down payment you can (comfortably) afford, and what monthly payments you can (comfortably) afford, and then talk to a lender and see how much those two numbers will qualify you to borrow. Bear in mind that you'll need extra money for closing costs and repair costs and incidentals when you move in, so don't burn your savings all the way down for the downpayment.
2. the fair market value of any house you're offering on. To find this, do what raisingsand suggests. You want to find comparable properties that have sold recently. They should be comparable in terms of location, square footage, and other distinguishing features of the house (for example number of bathrooms, offstreet parking space, etc). Try to find at least three and write up a sheet with their statistics written down (sale price, square footage, bad/bath, yard?, garage?, location, etc). Suppose the seller is asking $200K for this house, but you can see that it has fewer bathrooms and is in a worse location than one that sold two weeks ago for $180K. Well, now you have a rationale for lowering your offer to below $180K. (and so on). You'll need to make judgment calls about how the variables affect the price, but the more comps you can assembly the more you will get a sense of what the right price is.
You need to know these numbers before you can decide whether to offer on this house. Maybe it would be fun to try to figure the numbers for this house, just for fun practice. Don't get stampeded by the idea of outbidding other people. Either you should make an offer or not, based on your own finances and the fair marker value of the house, but the other bidders have no bearing on that.
posted by LobsterMitten at 11:48 PM on April 15, 2011 [1 favorite]
This. You may be amazed at the amount of information you can find online about what people have paid for houses recently.
You need to know two prices:
1. the max price you can pay. To find this, you need to look at your budget and your savings to figure out what down payment you can (comfortably) afford, and what monthly payments you can (comfortably) afford, and then talk to a lender and see how much those two numbers will qualify you to borrow. Bear in mind that you'll need extra money for closing costs and repair costs and incidentals when you move in, so don't burn your savings all the way down for the downpayment.
2. the fair market value of any house you're offering on. To find this, do what raisingsand suggests. You want to find comparable properties that have sold recently. They should be comparable in terms of location, square footage, and other distinguishing features of the house (for example number of bathrooms, offstreet parking space, etc). Try to find at least three and write up a sheet with their statistics written down (sale price, square footage, bad/bath, yard?, garage?, location, etc). Suppose the seller is asking $200K for this house, but you can see that it has fewer bathrooms and is in a worse location than one that sold two weeks ago for $180K. Well, now you have a rationale for lowering your offer to below $180K. (and so on). You'll need to make judgment calls about how the variables affect the price, but the more comps you can assembly the more you will get a sense of what the right price is.
You need to know these numbers before you can decide whether to offer on this house. Maybe it would be fun to try to figure the numbers for this house, just for fun practice. Don't get stampeded by the idea of outbidding other people. Either you should make an offer or not, based on your own finances and the fair marker value of the house, but the other bidders have no bearing on that.
posted by LobsterMitten at 11:48 PM on April 15, 2011 [1 favorite]
My apologies to all the honest realtors out there for what I'm about to say. I worked in a service industry connected to real estate and I found the industry in general to be totally untrustworthy. It was, I think, considered good business practice, to behave in a way that many other people would think unethical, but they would see as appropriate. Gazumping, lying about counter offers, not disclosing what they knew, even when asked, about issues with the house (and under Australia law, you have to). They were bad payers too, the cheque signer was always out, and they made it a practice not to pay for 3 months, even on a 7 days terms contract.
Assume they are unethical and untrustworthy, and take nothing for granted. If you have an issue, and a compromise is made, get it in writing.
Also, for your spouse, falling in love with a place is the most expensive thing you can do.
posted by b33j at 11:50 PM on April 15, 2011
Assume they are unethical and untrustworthy, and take nothing for granted. If you have an issue, and a compromise is made, get it in writing.
Also, for your spouse, falling in love with a place is the most expensive thing you can do.
posted by b33j at 11:50 PM on April 15, 2011
We recently bought a house but had looked at other houses and even went so far as making an offer on another couple of houses before finding ours. Our other offers fell through in the other two cases for different reasons, but in all 3 cases (including on the house we're now in), the real estate agents claimed they were about to receive other offers. As far as we can tell, none of these other offers ever actually came through and I'm pretty sure we were lied to by the estate agents each time.
posted by hazyjane at 11:54 PM on April 15, 2011 [1 favorite]
posted by hazyjane at 11:54 PM on April 15, 2011 [1 favorite]
What I planned to do if a seller claimed to have another offer on a house I was interested in, was to get a friend to ring them up and inquire about the house (obviously pretending to have nothing to do with me) and ask if there were any offers on it yet. I figured there was no incentive for the agent to lie to the friend as well.
posted by lollusc at 12:22 AM on April 16, 2011
posted by lollusc at 12:22 AM on April 16, 2011
I should clarify: I mean that there would be no further advantage to telling the friend there were TWO offers on the place rather than just admitting to my one, unless there really were two. If the agent is especially untrustworthy, they might even tell the friend that no one has made an offer yet, in the hope this will make the friend more likely to come and view the place. Then you would really know where you stand. (I.e. not to trust anything the agent says).
posted by lollusc at 12:26 AM on April 16, 2011
posted by lollusc at 12:26 AM on April 16, 2011
Response by poster: Thanks for all the replies, esp. the advice on just ignoring counteroffers, real or imaginary, and focusing on comps. b33j, I think you're right: probably best to assume untrustworthiness, ugh. The price/sqfoot is actually pretty impressive compared to other houses in the area, but in part that's because it's significantly larger. It's such a buyer's market that I'm totally prepared to walk away on this one... now I just have to convince the spouse, who is rather unhealthily attached!
posted by ms.codex at 12:32 AM on April 16, 2011 [1 favorite]
posted by ms.codex at 12:32 AM on April 16, 2011 [1 favorite]
(In a traditional sale) the seller pays 3% commission to their realtor and 3% to yours - that is, realtors are free for the buyer.
Since this home is essentially FSBO, the owner won't pay a seller's commission to herself, but ought to pay for the buyer's (your) realtor.
Find yourself a realtor. It shouldn't cost you anything. Plus, they'll have access to the MLS (their listing service), and will be able to find the right home for you.
realtor is a registered trademark with each letter capitalized and the ® symbol appended.
posted by panmunjom at 2:33 AM on April 16, 2011
Since this home is essentially FSBO, the owner won't pay a seller's commission to herself, but ought to pay for the buyer's (your) realtor.
Find yourself a realtor. It shouldn't cost you anything. Plus, they'll have access to the MLS (their listing service), and will be able to find the right home for you.
realtor is a registered trademark with each letter capitalized and the ® symbol appended.
posted by panmunjom at 2:33 AM on April 16, 2011
REALTOR®s add 3-6% to the cost of the transaction and work for the seller practically every time - legally and ethically. There's already one in the mix. Anyone with a web browser has access to the MLS.
posted by randomkeystrike at 5:49 AM on April 16, 2011 [1 favorite]
posted by randomkeystrike at 5:49 AM on April 16, 2011 [1 favorite]
There's enough inventory in houses out there that should should be able to line up 3 that you like. You can give them an offer and simply say "take it or leave it," and not play that whole back-and-forth game.
That's what we did with our house - we told them that we'd pay $X for it and if they didn't want to accept the offer we just go on down our list and make an offer on the next house. They weren't happy but they accepted it. Since we knew we had a good deal we didn't try to negotiate further after the inspection like some people do.
posted by Ostara at 9:14 AM on April 16, 2011
That's what we did with our house - we told them that we'd pay $X for it and if they didn't want to accept the offer we just go on down our list and make an offer on the next house. They weren't happy but they accepted it. Since we knew we had a good deal we didn't try to negotiate further after the inspection like some people do.
posted by Ostara at 9:14 AM on April 16, 2011
Every house we had a serious interest in, we were told there was another offer. True? Not true? As you said, the timing is fishy. The fact that it happened over and over, though, makes me pretty sure that most or all of those other offers were fake.
posted by Knowyournuts at 9:47 AM on April 16, 2011
posted by Knowyournuts at 9:47 AM on April 16, 2011
Never fall in love with a house, especially a reno like this one, until you've had the place inspected! Major, expensive to fix issues are routinely covered up for sale.
Remind your spouse this house (or any other) might have been on the market so long because of a major defect as yet undiscovered.
posted by jbenben at 10:06 AM on April 16, 2011 [1 favorite]
Remind your spouse this house (or any other) might have been on the market so long because of a major defect as yet undiscovered.
posted by jbenben at 10:06 AM on April 16, 2011 [1 favorite]
REALTOR®s add 3-6% to the cost of the transaction and work for the seller practically every time - legally and ethically. There's already one in the mix. Anyone with a web browser has access to the MLS.
Buyer's agents legally work for the buyer(there is a contract they sign and everything) and negotiate with the seller's agent, who works for the seller. Dual agency is when one agent tries to fill both roles. It can be done but for the buyer it's probably better if they have their own rep.
posted by St. Alia of the Bunnies at 11:48 AM on April 16, 2011
Buyer's agents legally work for the buyer(there is a contract they sign and everything) and negotiate with the seller's agent, who works for the seller. Dual agency is when one agent tries to fill both roles. It can be done but for the buyer it's probably better if they have their own rep.
posted by St. Alia of the Bunnies at 11:48 AM on April 16, 2011
PS even realtors get a realtor lots of times when they go to buy or sell property. It's just better if you do.
posted by St. Alia of the Bunnies at 11:49 AM on April 16, 2011
posted by St. Alia of the Bunnies at 11:49 AM on April 16, 2011
St Alia,, yeah, I know, but I think it varies by state, and I think "dual agency," which prevails in my state, is a bit of a joke. I know I'm probably oversimplifying. But since they all work on a % of the sale, I think realtors are not wired for getting the price down, and they don't really do anything in negotiation that an intelligent buyer can't do. Their main function, which the better of them are very good at, is bringing buyers to the seller. If the buyer and seller are already in contact, I just don't see the value, esp. if the seller is a realtor and therefore should know the mechanics.
YMMV, and there may be really great "buyer's agents" out there. I just haven't met one, and I trip over a realtor every time I walk out my door due to my chamber of commerce associations.
posted by randomkeystrike at 1:01 PM on April 16, 2011
YMMV, and there may be really great "buyer's agents" out there. I just haven't met one, and I trip over a realtor every time I walk out my door due to my chamber of commerce associations.
posted by randomkeystrike at 1:01 PM on April 16, 2011
Every time you interact with a Realtor(TM) - substitute "Realtor" with "Used house salesman".
Use the same mindset as if you were interacting with a used car salesman. It's the same game.
posted by veryblue1 at 2:24 PM on April 16, 2011 [3 favorites]
Use the same mindset as if you were interacting with a used car salesman. It's the same game.
posted by veryblue1 at 2:24 PM on April 16, 2011 [3 favorites]
I found out that if the seller lists the house on the MLS then they are agreeing to pay the buyer's agent's fee. We have bought three homes and found that making an offer is only the beginning of whole of work - inspectations, negotiating over what turns up in the inspectations, getting work done before closing. getting all of the required paperwork in place. Even when we found the house ourself, I was still grateful to have an agent helping, although we are lucky to have a relationship with an agent who has proven himself trustworthy and fair over time.
posted by metahawk at 7:24 PM on April 16, 2011
posted by metahawk at 7:24 PM on April 16, 2011
You know how there's no other houses on the market that will suit your needs, and never will be? Oh wait. Never fall in love with a specific property and get involved in a bidding war, fabricated or not. ( in this case it's fabricated) It's a buyers market; if you don't get this one, you'll soon find one more suited your needs, and without the negatives you mentioned as well. The longer you look, the more experienced at this you'll become, and the better the final result. I have friends who invest in real estate with the firm rule that they never buy property for more than 80% of the asking price, and they require a positive cash flow from the property on closing. They simply wait until the right deal comes along, and one always does.
posted by PareidoliaticBoy at 7:55 PM on April 16, 2011
posted by PareidoliaticBoy at 7:55 PM on April 16, 2011
I recently bought a house in Philadelphia, and while I think my realtor was great and entirely trustworthy everyone else we dealt was a nightmare, including my neighbors to one side.
Get a really really thorough inspection, the worst horror stories I've heard (including my own) were all rehabs. Check that they got building permits on the work they did, you can ask the Department of Licenses and Inspections and they will probably tell you.
posted by sepviva at 9:11 PM on April 16, 2011 [1 favorite]
Get a really really thorough inspection, the worst horror stories I've heard (including my own) were all rehabs. Check that they got building permits on the work they did, you can ask the Department of Licenses and Inspections and they will probably tell you.
posted by sepviva at 9:11 PM on April 16, 2011 [1 favorite]
As per Sepviva - "Check that they got building permits on the work they did"
I can not nth this enough!!
Far as I know, this is not part of the regular inspection, but you must do it and compare it to what you actually see in the house.
Lots of work with no permits = No Bueno.
posted by jbenben at 9:16 PM on April 16, 2011
I can not nth this enough!!
Far as I know, this is not part of the regular inspection, but you must do it and compare it to what you actually see in the house.
Lots of work with no permits = No Bueno.
posted by jbenben at 9:16 PM on April 16, 2011
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I'm confused by your question "do real estate agents make up competing offers?" and am unsure how it applies in this case if it's the SELLER making up lies in this case, but the general answer would be "yes." As in, don't count on a realtor being honest.
The price NEEDS to be cheaper than it was 3 years ago. 3 years ago was before the bubble burst.
I agree the timing is extremely suspect, to the point of being unbelievable. I'd show up for the appointment. If you don't like the place, of course, it doesn't matter. If you do like the place, I'd play it one of a few ways, depending on your personality and how sadistic you want to be:
- say nothing about the "other offer." Make the offer you were going to make anyway - I have no idea what it's worth, but I'd offer 80-90% of what it appraises at, less if you think it's going to be a tough property to sell. It's come down 15% since 2007 when it was new? HA! Have you researched the DIVE real estate values have taken?
- if they mention the other offer, smile knowingly, maybe even laugh a little. Otherwise, see previous step.
- make them blink. Say "well, it looks nice. Too bad you have the other offer; we would have liked it." And start walking. Make them chase you down the sidewalk. Oh, they won't literally do that, but they'll signal that "We'd really like to see your offer too." In this case, offer 10% less than you were planning to before. :-)
- Whatever you plan to do about making an offer, as you're leaving make sure they know about the other houses you're going to look at. And if you don't have other houses lined up to look at, GET SOME.
There are no mind tricks in negotiation. The person who is most willing to walk will get the most of what they want.
By the way, don't forget that you may love the place and be willing to overlook the problems you mentioned, but one day you'll probably sell the place. You REALLY need to get a bargain, because it sounds like it'll be a tough place to sell, even in a better market.
posted by randomkeystrike at 9:40 PM on April 15, 2011 [8 favorites]