Reasonable expectations for a buyer's agent in a sellers' market?
February 6, 2014 10:56 AM Subscribe
We're entering our third season of trying to buy a house in a very hot real estate market, and just lost another one. Our agent is a really nice person, but we feel like she's just not doing that much for us. I'd appreciate some thoughts on if our expectations are realistic.
This is anon due to a lot of personal info. Trying to add a lot of details so that follow up is not necessary. I really just need some thoughts on our situation and some third-party perspective. I'm leery of dumping our agent if the main issues here are really our circumstances and requirements. Also, we have a professional relationship with her husband that we are wary about making awkward.
Husband and I are in our third year of trying to buy in the San Francisco Bay Area, having lived here for nine years. We have probably bid on close to 20 properties in the last three years. We're specifically looking on the peninsula, and even more specifically looking in a fairly small area in one city - it's probably roughly 20 blocks long, hits all our walkability/lifestyle criteria and has excellent public schools (the last point is the most critical for us). We are well-qualified buyers with ample reserves for a 20% downpayment, plus extra for emergencies/remodel/etc - but we are not "all cash" or even "mostly cash" buyers. We are looking to spend up to $1.3/1.4M. I realize that sounds like a lot, but this is likely to get us a dated property that needs a lot of updates/expansion over the years.
We are not at all in the least picky in the sense of "I must have granite and stainless steel!!" or "I don't like this carpeting and have no imagination about repainting walls." We are comfortable living with very dated/sub-par surroundings for as much time as needed for DYI updates or to save for a big overhaul. Our biggest criteria are location (see my note above about being really limited) and a house with either a great layout or the potential to get there (eg not a corner lot with no yard to speak of to bump out in to). We also really don't want to pay for someone else's flip, so prefer not to buy a house that was bought last year and had a bunch of quick cosmetic stuff done.
Our agent was a referral and is the wife of someone we do other business with (he provides a service to us). We like her husband and his work a lot, which is one reason why this is awkward. Wife is super nice, friendly, responsive, but it has been three years and we are getting really frustrated with the whole thing.
Stuff we have going against us that is not her fault:
- can't pay all-cash, although we are well-qualified, 20% down, and make offers with no contingencies (this is standard in the bay area)
- small search area. A lot of this is gated for us with public schools - we want to get into a strong district, and that's something I'm unwilling to compromise on as we have one kid hitting kindergarten soon. But realistically, I am aware this is really hampering our search and that she is not to blame for that.
- Finding a property in a cheaper area (where our cash has more clout, or where there might not be as much demand for limited supply) isn't palatable to us. First, this tends to push us into lesser school districts (really are opposed to paying for private school for two kids for 12 years). It also moves us into locations that, to be honest, we just don't like very much. We are looking for a home where we can stay until the kids leave high school, not for a place we will regret for the location or need to leave within 5 years.
We've been seemingly close on a few properties, including having gotten feedback that we are top 2, 3, etc., and have been given the chance to bring up our bid (although none of these were written counters to pay $X and get the house, they were rather invitations to remain in the bidding war). We walked away from that at least three times, and did it once without success. Throughout this process I don't have a strong feeling that she's fighting/advocating for us. She's never indicated that she knows any of the list agents or has any networking connections to give us any kind of edge in the process. I don't really get from her that that she is in there trying to get our offer accepted (other than presenting it/emailing it by the deadline). For some reason I have in my head that there is some kind of "schmooze" factor to all of this, that somehow deals are getting done not just based on the bottom line of how much money is being offered. Is that a realistic expectation?
During the search, another big concern I have is just that she's not adding much value. For our last bid we asked her about her thoughts on pricing. She gave back this very generic, general answer that didn't help at all - basically gave us about a $100k+ range without saying what she thought or giving any useful advice, all of it was positioned with "of course, some buyer could come in and really want it and go with $Y or even more." Of course, she's not a fortune teller and doesn't know what's going to happen, but it feels like we're going in without having any useful guidance. She ran comps and provided them, but didn't give us any interpretation - like "based on these comps I think..."
For our last bid we also raised a question about some details that affected square footage. She basically said "good question, you should call the city and ask." I realize there's some liability here and that she is probably cautious about not telling us one thing and then having it not be true, but I felt like it was kind of a blow-off response. If nothing else, from a customer service point of view, what about confirming for us the number to call, or putting in the call but then disclaiming that we should follow up and make sure her interpretation of the response was correct? For a $1.3M sale it seems like it's worth a little more effort on her part.
We're basically at the point of deciding to shop around and talk to some other people to get their thoughts on our situation and sort of interview them (which we should have done in the first place with her, and by the way I wouldn't take a referral like this again). I don't think there's any harm in that...but can anyone give me some thoughts on whether our agent is doing a good job? Average job? Are our expectations too high? I basically am leery about dumping her if our specific constraints would make this a difficult job for any reasonable person, in large part due to the professional relationship we have with her husband and not wanting to rock the boat there.
Along those lines, has anyone bought a house in a similar market and felt like their agent did some kind of exceptional job in getting their offer accepted, or that their agent made the difference in getting it or not getting it done? Should the agent make that much of a difference?
Thanks for the thoughts/advice/reality check. This has been incredibly frustrating.
This is anon due to a lot of personal info. Trying to add a lot of details so that follow up is not necessary. I really just need some thoughts on our situation and some third-party perspective. I'm leery of dumping our agent if the main issues here are really our circumstances and requirements. Also, we have a professional relationship with her husband that we are wary about making awkward.
Husband and I are in our third year of trying to buy in the San Francisco Bay Area, having lived here for nine years. We have probably bid on close to 20 properties in the last three years. We're specifically looking on the peninsula, and even more specifically looking in a fairly small area in one city - it's probably roughly 20 blocks long, hits all our walkability/lifestyle criteria and has excellent public schools (the last point is the most critical for us). We are well-qualified buyers with ample reserves for a 20% downpayment, plus extra for emergencies/remodel/etc - but we are not "all cash" or even "mostly cash" buyers. We are looking to spend up to $1.3/1.4M. I realize that sounds like a lot, but this is likely to get us a dated property that needs a lot of updates/expansion over the years.
We are not at all in the least picky in the sense of "I must have granite and stainless steel!!" or "I don't like this carpeting and have no imagination about repainting walls." We are comfortable living with very dated/sub-par surroundings for as much time as needed for DYI updates or to save for a big overhaul. Our biggest criteria are location (see my note above about being really limited) and a house with either a great layout or the potential to get there (eg not a corner lot with no yard to speak of to bump out in to). We also really don't want to pay for someone else's flip, so prefer not to buy a house that was bought last year and had a bunch of quick cosmetic stuff done.
Our agent was a referral and is the wife of someone we do other business with (he provides a service to us). We like her husband and his work a lot, which is one reason why this is awkward. Wife is super nice, friendly, responsive, but it has been three years and we are getting really frustrated with the whole thing.
Stuff we have going against us that is not her fault:
- can't pay all-cash, although we are well-qualified, 20% down, and make offers with no contingencies (this is standard in the bay area)
- small search area. A lot of this is gated for us with public schools - we want to get into a strong district, and that's something I'm unwilling to compromise on as we have one kid hitting kindergarten soon. But realistically, I am aware this is really hampering our search and that she is not to blame for that.
- Finding a property in a cheaper area (where our cash has more clout, or where there might not be as much demand for limited supply) isn't palatable to us. First, this tends to push us into lesser school districts (really are opposed to paying for private school for two kids for 12 years). It also moves us into locations that, to be honest, we just don't like very much. We are looking for a home where we can stay until the kids leave high school, not for a place we will regret for the location or need to leave within 5 years.
We've been seemingly close on a few properties, including having gotten feedback that we are top 2, 3, etc., and have been given the chance to bring up our bid (although none of these were written counters to pay $X and get the house, they were rather invitations to remain in the bidding war). We walked away from that at least three times, and did it once without success. Throughout this process I don't have a strong feeling that she's fighting/advocating for us. She's never indicated that she knows any of the list agents or has any networking connections to give us any kind of edge in the process. I don't really get from her that that she is in there trying to get our offer accepted (other than presenting it/emailing it by the deadline). For some reason I have in my head that there is some kind of "schmooze" factor to all of this, that somehow deals are getting done not just based on the bottom line of how much money is being offered. Is that a realistic expectation?
During the search, another big concern I have is just that she's not adding much value. For our last bid we asked her about her thoughts on pricing. She gave back this very generic, general answer that didn't help at all - basically gave us about a $100k+ range without saying what she thought or giving any useful advice, all of it was positioned with "of course, some buyer could come in and really want it and go with $Y or even more." Of course, she's not a fortune teller and doesn't know what's going to happen, but it feels like we're going in without having any useful guidance. She ran comps and provided them, but didn't give us any interpretation - like "based on these comps I think..."
For our last bid we also raised a question about some details that affected square footage. She basically said "good question, you should call the city and ask." I realize there's some liability here and that she is probably cautious about not telling us one thing and then having it not be true, but I felt like it was kind of a blow-off response. If nothing else, from a customer service point of view, what about confirming for us the number to call, or putting in the call but then disclaiming that we should follow up and make sure her interpretation of the response was correct? For a $1.3M sale it seems like it's worth a little more effort on her part.
We're basically at the point of deciding to shop around and talk to some other people to get their thoughts on our situation and sort of interview them (which we should have done in the first place with her, and by the way I wouldn't take a referral like this again). I don't think there's any harm in that...but can anyone give me some thoughts on whether our agent is doing a good job? Average job? Are our expectations too high? I basically am leery about dumping her if our specific constraints would make this a difficult job for any reasonable person, in large part due to the professional relationship we have with her husband and not wanting to rock the boat there.
Along those lines, has anyone bought a house in a similar market and felt like their agent did some kind of exceptional job in getting their offer accepted, or that their agent made the difference in getting it or not getting it done? Should the agent make that much of a difference?
Thanks for the thoughts/advice/reality check. This has been incredibly frustrating.
This is just one of those situations where money talks. While an all cash offer is nice, to the seller, they're all cash deals because no matter what, they walk away from closing with their check.
Your realtor is probably not much help with the pricing, because pricing in a bidding war is wholly unpredictable. The comps aren't even much help because in hot markets, what sold yesterday at X may sell for Q or W today.
Sellers don't sell their houses to actual buyers, they make dispassionate decisions based on the offer, nothing more. I can't see that there's a schmooze factor in this, because it would be illegal for the seller's agent to disclose the bids to one realtor and not another, so it's not like someone is getting information that you're not getting.
If there's an on-going bidding war, no seller in his or her right mind will offer you a "pay X and it's yours" not if there's a chance one of the buyers will bid X + Y.
It sound to me like you have a competant, friendly agent who is responsive.
If you do decide to let your contract with your current agent lapse, when interviewing other agents, be sure to ask them, "What special things to you do to get your client's offers accepted?"
As for questions about building out, and city ordinances and square footage, while "I'm not able to say, you should call the city/county to confirm" is the exact, correct answer, I do see where having her hunt up the number would have been nice.
At the end of the day, you're not bidding enough. If you want to win the house, you're going to have to pay for it and that means more aggressive bidding.
If your agent hasn't told you this yet, then that is as good a reason as any to get a new agent, because if, after three years, you still don't have a house, that means that she hasn't told you your bids are too low, or she's told you, you just don't believe her and either way, you need someone else.
posted by Ruthless Bunny at 11:11 AM on February 6, 2014 [1 favorite]
Your realtor is probably not much help with the pricing, because pricing in a bidding war is wholly unpredictable. The comps aren't even much help because in hot markets, what sold yesterday at X may sell for Q or W today.
Sellers don't sell their houses to actual buyers, they make dispassionate decisions based on the offer, nothing more. I can't see that there's a schmooze factor in this, because it would be illegal for the seller's agent to disclose the bids to one realtor and not another, so it's not like someone is getting information that you're not getting.
If there's an on-going bidding war, no seller in his or her right mind will offer you a "pay X and it's yours" not if there's a chance one of the buyers will bid X + Y.
It sound to me like you have a competant, friendly agent who is responsive.
If you do decide to let your contract with your current agent lapse, when interviewing other agents, be sure to ask them, "What special things to you do to get your client's offers accepted?"
As for questions about building out, and city ordinances and square footage, while "I'm not able to say, you should call the city/county to confirm" is the exact, correct answer, I do see where having her hunt up the number would have been nice.
At the end of the day, you're not bidding enough. If you want to win the house, you're going to have to pay for it and that means more aggressive bidding.
If your agent hasn't told you this yet, then that is as good a reason as any to get a new agent, because if, after three years, you still don't have a house, that means that she hasn't told you your bids are too low, or she's told you, you just don't believe her and either way, you need someone else.
posted by Ruthless Bunny at 11:11 AM on February 6, 2014 [1 favorite]
Why are you using an agent at all? You've been around the merry go round enough yourself that you know how the process works. You have a limited amount of capital and a defined geography.
There's no schmoozing, it's just money. And your buyer's agent is going to get half of the commission. In a seller's market, where the seller's agent stands to make a full 7% on the sale of a $1M+ property, it is absolutely NO wonder your bids are not winning. The seller's agent doesn't want to split a $70K commission with your agent, so your bid is at the bottom of the pile, or the agent talks up the nice family who wrote a letter (instead of you and your letter etc.).
Real estate agents, in my personal and second-hand experience--don't add any value. They're just a drain on the system. Ditch yours, don't replace her, and your bid just got 3.5% higher in the mind of the agent on the other side doing the gatekeeping.
posted by Admiral Haddock at 11:11 AM on February 6, 2014 [4 favorites]
There's no schmoozing, it's just money. And your buyer's agent is going to get half of the commission. In a seller's market, where the seller's agent stands to make a full 7% on the sale of a $1M+ property, it is absolutely NO wonder your bids are not winning. The seller's agent doesn't want to split a $70K commission with your agent, so your bid is at the bottom of the pile, or the agent talks up the nice family who wrote a letter (instead of you and your letter etc.).
Real estate agents, in my personal and second-hand experience--don't add any value. They're just a drain on the system. Ditch yours, don't replace her, and your bid just got 3.5% higher in the mind of the agent on the other side doing the gatekeeping.
posted by Admiral Haddock at 11:11 AM on February 6, 2014 [4 favorites]
We are also in the process of trying to buy a house in a seller's market though we haven't been in it nearly as long as you but I feel like our realtor has added a LOT of value to this process. We also can't pay all cash and live in an area where people are paying cash for houses (mostly people coming from the Bay Area :) )
- Our realtor has been a realtor in Austin for 15 years. She knows other realtors and talks directly to them. She sent out a couple emails to all her contacts to see if they knew of any coming soon places we could get into early.
- She got our mortgage broker to call the seller's realtor on the last house we offered on because they knew each other and wanted him to be assured that we were getting approved and it could happen in the shorter timeframe.
- She brings a list of comps with her to each house we go to see so we can talk seriously about any possible offers we want to make.
- She knows electricians/plumbers/foundation guys and has had them go look at something that we had a question about. They have given us ballpark estimates to fix stuff over the phone.
- She looked up city codes for fencing because one house we were looking at we would have to put in a fence but it was on a corner lot and we wanted to know how close to the street we could build the fence.
In the end it has come down to, we just haven't been the highest offer for the places we have placed offers on but our realtor has been instrumental in making sure we had all the information we could want before we made that offer. I couldn't imagine trying to do this without her and she absolutely deserves the commission she will eventually (god I hope soon) be getting.
It sounds like you are bidding in places that everyone else is bidding (everyone wants good school districts!) so you are going to need to come up with more money or buy less house. To me three years of this means that you just flat out can't afford the houses you are looking at so you need to look elsewhere, rent, or look at smaller houses. Trust me I know how frustrating this is. Good Luck!
posted by magnetsphere at 11:18 AM on February 6, 2014 [6 favorites]
- Our realtor has been a realtor in Austin for 15 years. She knows other realtors and talks directly to them. She sent out a couple emails to all her contacts to see if they knew of any coming soon places we could get into early.
- She got our mortgage broker to call the seller's realtor on the last house we offered on because they knew each other and wanted him to be assured that we were getting approved and it could happen in the shorter timeframe.
- She brings a list of comps with her to each house we go to see so we can talk seriously about any possible offers we want to make.
- She knows electricians/plumbers/foundation guys and has had them go look at something that we had a question about. They have given us ballpark estimates to fix stuff over the phone.
- She looked up city codes for fencing because one house we were looking at we would have to put in a fence but it was on a corner lot and we wanted to know how close to the street we could build the fence.
In the end it has come down to, we just haven't been the highest offer for the places we have placed offers on but our realtor has been instrumental in making sure we had all the information we could want before we made that offer. I couldn't imagine trying to do this without her and she absolutely deserves the commission she will eventually (god I hope soon) be getting.
It sounds like you are bidding in places that everyone else is bidding (everyone wants good school districts!) so you are going to need to come up with more money or buy less house. To me three years of this means that you just flat out can't afford the houses you are looking at so you need to look elsewhere, rent, or look at smaller houses. Trust me I know how frustrating this is. Good Luck!
posted by magnetsphere at 11:18 AM on February 6, 2014 [6 favorites]
For our last bid we asked her about her thoughts on pricing. She gave back this very generic, general answer that didn't help at all - basically gave us about a $100k+ range without saying what she thought or giving any useful advice
For this reason, and because you've spent three years with this person with no results, I would ditch her. If you don't feel like they are on your side, understand your top priorities and advocate for those priorities then there's got to be someone better.
posted by St. Peepsburg at 11:28 AM on February 6, 2014 [1 favorite]
For this reason, and because you've spent three years with this person with no results, I would ditch her. If you don't feel like they are on your side, understand your top priorities and advocate for those priorities then there's got to be someone better.
posted by St. Peepsburg at 11:28 AM on February 6, 2014 [1 favorite]
Admiral Haddock, if they don't have an agent the listing agent will get full commission instead of half. No money save there. Plus the buyers won't have anyone to represent them.
posted by St. Alia of the Bunnies at 11:34 AM on February 6, 2014
posted by St. Alia of the Bunnies at 11:34 AM on February 6, 2014
People don't accept offers because of schmoozing. They are looking for the highest and best offer period.
While my experience is different than most (and for way less money), I can say that this is not 100% true. I was in a multiple-offer situation, and was actually out-bid by a couple of other parties, but my offer was still accepted.
The reason it was accepted was because my agent suggested we include a personal letter with our offer, explaining who we were, what we loved about the house, etc. etc. It helped because the seller had been living in the house for 30 years, and had a significant emotional attachment to the place. If you feel like the seller is at all emotionally involved in their sale (and many will be), then I can't recommend the personal appeal highly enough.
posted by Think_Long at 11:34 AM on February 6, 2014 [3 favorites]
While my experience is different than most (and for way less money), I can say that this is not 100% true. I was in a multiple-offer situation, and was actually out-bid by a couple of other parties, but my offer was still accepted.
The reason it was accepted was because my agent suggested we include a personal letter with our offer, explaining who we were, what we loved about the house, etc. etc. It helped because the seller had been living in the house for 30 years, and had a significant emotional attachment to the place. If you feel like the seller is at all emotionally involved in their sale (and many will be), then I can't recommend the personal appeal highly enough.
posted by Think_Long at 11:34 AM on February 6, 2014 [3 favorites]
if they don't have an agent the listing agent will get full commission instead of half.
That was my point precisely: your bid just got 3.5% higher in the mind of the agent.
The seller's agent, in a seller's market, is out to make 7%, not 3.5%, and the seller's agent is the gatekeeper.
posted by Admiral Haddock at 12:01 PM on February 6, 2014 [2 favorites]
That was my point precisely: your bid just got 3.5% higher in the mind of the agent.
The seller's agent, in a seller's market, is out to make 7%, not 3.5%, and the seller's agent is the gatekeeper.
posted by Admiral Haddock at 12:01 PM on February 6, 2014 [2 favorites]
Seconding Think Long, in hot sellers' markets you have to think outside the box, and sometimes it helps to understand who the sellers are. Some will make money-based decisions, others will have emotional attachments to the house and will care about who you are.
posted by sid at 12:10 PM on February 6, 2014
posted by sid at 12:10 PM on February 6, 2014
The listing agent is required to present all offers. The seller chooses.
posted by St. Alia of the Bunnies at 12:12 PM on February 6, 2014
posted by St. Alia of the Bunnies at 12:12 PM on February 6, 2014
I do this for a living and represent the seller.
posted by St. Alia of the Bunnies at 12:13 PM on February 6, 2014
posted by St. Alia of the Bunnies at 12:13 PM on February 6, 2014
If I were a seller, and I got even a slight impression that my agent was trying to get me to accept an offer not in my best interests because of a friendly relationship with bidding agent I would pull off the market with that agent, and complain to their broker (while getting them to allow me to break exclusivity with that agents for the pre-signed contract so I could list with another agent. In short, I don't think any personal contacts that agents might have will help/hinder.
That said, there's more than just the end price that goes into "my best interests" - if we were selling, and I had one offer for X with full cash purchase, and one offer for X+Y% with a condition on financing, that makes the choice harder. Ultimately though, if it's 1.4M with financing, or 1M without financing, unless the seller's been burned a few times by buyers getting denied at the bank, they're opting for the significantly higher price.
So it seems like you're ultimately simply getting outbid.
Your buyer's agent should be able to get the information on any houses that you've bid on to see the end closing price some short time after the sale is finalized. I think it would be a good exercise to ask to see some of these; if you've been doing this for years, that data has to be out there. This can help you examine your expectations. (making up numbers) If you're bidding 850K for a house that ended up selling for 950K (and pretend in this case you raised your bid to 875K), then you can pretty easily see why you lost out, and can either choose to put in a more competitive bid in next time, or choose to look in a different area which matches your price (which you don't seem to want to do).
Yes, perhaps your agent could be offering you better guidance if that's what you want. You might want to examine your interactions and see if you're talking your agent down from her recommendation. You agent wants to make a sale first, and wants you happy second. She doesn't want to work for free for 3 years, and the only reason she's still returning your calls is either because of her husband, or she's fallen for the fallacy of sunk costs.
posted by nobeagle at 12:21 PM on February 6, 2014 [1 favorite]
That said, there's more than just the end price that goes into "my best interests" - if we were selling, and I had one offer for X with full cash purchase, and one offer for X+Y% with a condition on financing, that makes the choice harder. Ultimately though, if it's 1.4M with financing, or 1M without financing, unless the seller's been burned a few times by buyers getting denied at the bank, they're opting for the significantly higher price.
So it seems like you're ultimately simply getting outbid.
Your buyer's agent should be able to get the information on any houses that you've bid on to see the end closing price some short time after the sale is finalized. I think it would be a good exercise to ask to see some of these; if you've been doing this for years, that data has to be out there. This can help you examine your expectations. (making up numbers) If you're bidding 850K for a house that ended up selling for 950K (and pretend in this case you raised your bid to 875K), then you can pretty easily see why you lost out, and can either choose to put in a more competitive bid in next time, or choose to look in a different area which matches your price (which you don't seem to want to do).
Yes, perhaps your agent could be offering you better guidance if that's what you want. You might want to examine your interactions and see if you're talking your agent down from her recommendation. You agent wants to make a sale first, and wants you happy second. She doesn't want to work for free for 3 years, and the only reason she's still returning your calls is either because of her husband, or she's fallen for the fallacy of sunk costs.
posted by nobeagle at 12:21 PM on February 6, 2014 [1 favorite]
What you're looking for sounds unreasonable in the Bay Area. There are so many cash buyers and people who can pay more than the asking price, and so few good school districts, that your criteria are impossible. I have many friends in your situation and the ones who planned to have children ended up buying in Alameda ($450K), and the ones who planned not to have children are in Visitacion Valley ($900K).
posted by BabeTheBlueOX at 12:24 PM on February 6, 2014
posted by BabeTheBlueOX at 12:24 PM on February 6, 2014
I'm with Admiral Haddock and credit this strategy with closing on my house purchase this past fall.
The beauty of showing up without a buyer's broker is that the seller's agent will do whatever is in their power to make sure you win the bid.
If yours is the only offer and the seller is not happy with it, the agent has the ability to reduce their commission to help make the sale - especially since they likely know the seller's lowest acceptable price!
This is precisely how we were able to get our offer accepted. The seller's broker worked super hard for us and we've become friends as a result.
The only times using a buyer's broker is advantageous in my experience is:
1. if your realtor has dibs on properties that haven't been put on the market yet
or
2. the market isn't overly hot and you are working with one of those discount fixed-fee brokers who will give you back whatever extra they got in commission.
posted by Dragonness at 12:27 PM on February 6, 2014
The beauty of showing up without a buyer's broker is that the seller's agent will do whatever is in their power to make sure you win the bid.
If yours is the only offer and the seller is not happy with it, the agent has the ability to reduce their commission to help make the sale - especially since they likely know the seller's lowest acceptable price!
This is precisely how we were able to get our offer accepted. The seller's broker worked super hard for us and we've become friends as a result.
The only times using a buyer's broker is advantageous in my experience is:
1. if your realtor has dibs on properties that haven't been put on the market yet
or
2. the market isn't overly hot and you are working with one of those discount fixed-fee brokers who will give you back whatever extra they got in commission.
posted by Dragonness at 12:27 PM on February 6, 2014
Oh, as a buyer one more thing you can do is write a lovely letter to the seller, with pictures of your family, telling them how and why you love the property. This is what one couple did that was trying to purchase my home last year. They would have totally had it if an all-cash buyer hadn't shown up without a broker. We were using Redfin to market the property, and they gave us back the rest of the commission that would have gone to the buyer's broker.
posted by Dragonness at 12:29 PM on February 6, 2014
posted by Dragonness at 12:29 PM on February 6, 2014
> While an all cash offer is nice, to the seller, they're all cash deals because no matter what, they walk away from closing with their check.
Not true - the all-cash buyer is always at an advantage:
1. The closing can happen much sooner if the parties don't have to wait for the bank.
2. In a hot market, a property may not end up appraising at the offered price and the mortgage may therefore not get approved. The seller takes a not insignificant risk by accepting an offer that is not all-cash.
posted by Dragonness at 12:59 PM on February 6, 2014 [1 favorite]
Not true - the all-cash buyer is always at an advantage:
1. The closing can happen much sooner if the parties don't have to wait for the bank.
2. In a hot market, a property may not end up appraising at the offered price and the mortgage may therefore not get approved. The seller takes a not insignificant risk by accepting an offer that is not all-cash.
posted by Dragonness at 12:59 PM on February 6, 2014 [1 favorite]
This: Admiral Haddock, if they don't have an agent the listing agent will get full commission instead of half. No money save there. Plus the buyers won't have anyone to represent them.
posted by St. Alia of the Bunnies at 2:34 PM on February 6 [+] [!]
Dump the "buyer's agent". There is no such thing anyway. Now the selling agent has just as much, if not more incentive to sell you the house because he/she will get 100% of the commission. Think about it. If your bid id competitive any you are the only buyer without a 2nd agent trying to get their cut, you look sweeter in the eyes of the selling agent.
posted by Gungho at 1:25 PM on February 6, 2014
posted by St. Alia of the Bunnies at 2:34 PM on February 6 [+] [!]
Dump the "buyer's agent". There is no such thing anyway. Now the selling agent has just as much, if not more incentive to sell you the house because he/she will get 100% of the commission. Think about it. If your bid id competitive any you are the only buyer without a 2nd agent trying to get their cut, you look sweeter in the eyes of the selling agent.
posted by Gungho at 1:25 PM on February 6, 2014
I don't think your agent is the problem, I think your requirements are the problem. You characterize yourself as "not picky," but you are adamant you must live in a teeny, tiny neighborhood and won't negotiate on that point. You should find a way (Redfin membership, MLS info feed, something) to track EVERY SINGLE HOME offered for sale in your desired location. ALL of them. And then bid on every single one that comes up and has a reasonable chance of selling within your price range. If it comes to pass that everything in your desired neighborhood, like EVERYTHING, sells over your price range, then there's your answer: you can't afford to live there. Revisit your requirements and come up with a broader search.
If you do decide to switch agents, try to get someone in the Top Agent Network; they may have access to homes before they are listed, which is the only service a buyers' agent could really be providing you with respect to finding a place (they can obviously help with inspections, closing, etc., too). That's how my wife and I found our house in SF - did a private walkthrough with our agent before it was listed and made an offer within days, no other bidders. Definitely the way to go if you can get an agent with that access. He only works in the city, though, so I doubt it would help to refer you to him.
posted by Joey Buttafoucault at 1:45 PM on February 6, 2014
If you do decide to switch agents, try to get someone in the Top Agent Network; they may have access to homes before they are listed, which is the only service a buyers' agent could really be providing you with respect to finding a place (they can obviously help with inspections, closing, etc., too). That's how my wife and I found our house in SF - did a private walkthrough with our agent before it was listed and made an offer within days, no other bidders. Definitely the way to go if you can get an agent with that access. He only works in the city, though, so I doubt it would help to refer you to him.
posted by Joey Buttafoucault at 1:45 PM on February 6, 2014
Not true - the all-cash buyer is always at an advantage:
Completely agreed, for the reasons Dragonness cites.
In no way casting aspersions on St. Alia's adherence to her own professional code of ethics ("The listing agent is required to present all offers."), there's presenting, and then there's presenting, and for the incremental 3.5% to be earned on a million-dollar listing, I'm confident the unrepresented buyers can be filtered to the top.
And, of course, in the hot Boston market, for instance, sellers' agents commonly have pre-showings by appointment with buyers who are not represented by agents. Those buyers put in the first bids and can run away with a house before the represented buyers get in the door.
Again, this is just my personal experience, but the agents I've worked with as a house hunter (and that my friends and colleagues have used on both the buy and sell side) haven't added a lot of value for the 7% (or 3.5%) they're getting.
Dump the "buyer's agent". There is no such thing anyway.
You are mistaken, though there are differences among the states.
posted by Admiral Haddock at 2:48 PM on February 6, 2014
Completely agreed, for the reasons Dragonness cites.
In no way casting aspersions on St. Alia's adherence to her own professional code of ethics ("The listing agent is required to present all offers."), there's presenting, and then there's presenting, and for the incremental 3.5% to be earned on a million-dollar listing, I'm confident the unrepresented buyers can be filtered to the top.
And, of course, in the hot Boston market, for instance, sellers' agents commonly have pre-showings by appointment with buyers who are not represented by agents. Those buyers put in the first bids and can run away with a house before the represented buyers get in the door.
Again, this is just my personal experience, but the agents I've worked with as a house hunter (and that my friends and colleagues have used on both the buy and sell side) haven't added a lot of value for the 7% (or 3.5%) they're getting.
Dump the "buyer's agent". There is no such thing anyway.
You are mistaken, though there are differences among the states.
posted by Admiral Haddock at 2:48 PM on February 6, 2014
I live on the Peninsula; I just bought a house and sold another here within the last six months.
Do not try to go without a buyers agent. The mortgage lenders are a little cagey about coming through right now, and a buyer without an agent would raise red flags for me. As a seller, we wanted a solid deal with a buyer (and an agent) who really seemed to have their shit together. Is dotted, Ts crossed, everything.
A question: Have you seen the bids she's been sending? Here is why I ask: We had multiple offers for our house, and some got thrown out right away because they were just so haphazard and sloppy. Like, they weren't signed in the right places, or they had two slightly different offer prices on different pages. It didn't give me the impression that the agent and the buyers were very serious about our place, and if they can't even bother to get the offer right, how confident am I that they have their funding together? That their agent has gone through what the various clauses in the contracts mean? I think I sound kind of pedantic and school-marmy, but I wanted to sell my house cleanly and quickly, and we had no time for crappy bids. (This may be totally irrelevant to you; your agent may be awesome at this part.)
Also, is she presenting in person? What does she tell you about what happens in the room as the offers are presented? The lack of network with other realtors does not seem great to me.
Our (otherwise excellent) agent, was really hesitant about any kind of "you could probably add on here" kinds of questions that should really be answered by the city's planning department. However, about this:
For our last bid we also raised a question about some details that affected square footage. She basically said "good question, you should call the city and ask." I realize there's some liability here and that she is probably cautious about not telling us one thing and then having it not be true, but I felt like it was kind of a blow-off response.
Seems kind of lazy to me. Our agent went to the city and pulled all permits issued for the address of the house we eventually bought, as well as the county records, so we could compare the square footages and look at the house's repair history.
You sound like you want to fire her. You should do that.
I would switch agents. Be cool, say "I think we are exhausted by this project, and we are going to take a break." It's a business thing, nothing personal. The husband knows that things aren't exactly going very well either, and if you're providing him income, he shouldn't take it personally. (If he does, that sucks, and I'm sorry.) If you resume (with a new agent), that's not really any of their business.
As for your particular situation: I suspect I know where you're looking (MeMail me and we can talk specifics; I live here too.) And yes, it's really tough. If you're looking where I think you are, the housing stock is super-limited, and it's a really hot area for young families, so some element of this is going to be luck. Personally, though, I think that your agent (and this is going to sound bad) should have been pushing you to bid absolutely as much as possible for every house you go for. I mean, your No. 1 and No. 2 criteria are (1) walkable location and (2) schools, so whether this house is worth $1.3 or $1.4 is less important that just getting it. At this point, you want to get a house. So get a house. Bid at the top of your budget when something comes up that seems good to you.
Good luck. I know it sucks out here.
posted by purpleclover at 2:59 PM on February 6, 2014 [3 favorites]
Do not try to go without a buyers agent. The mortgage lenders are a little cagey about coming through right now, and a buyer without an agent would raise red flags for me. As a seller, we wanted a solid deal with a buyer (and an agent) who really seemed to have their shit together. Is dotted, Ts crossed, everything.
A question: Have you seen the bids she's been sending? Here is why I ask: We had multiple offers for our house, and some got thrown out right away because they were just so haphazard and sloppy. Like, they weren't signed in the right places, or they had two slightly different offer prices on different pages. It didn't give me the impression that the agent and the buyers were very serious about our place, and if they can't even bother to get the offer right, how confident am I that they have their funding together? That their agent has gone through what the various clauses in the contracts mean? I think I sound kind of pedantic and school-marmy, but I wanted to sell my house cleanly and quickly, and we had no time for crappy bids. (This may be totally irrelevant to you; your agent may be awesome at this part.)
Also, is she presenting in person? What does she tell you about what happens in the room as the offers are presented? The lack of network with other realtors does not seem great to me.
Our (otherwise excellent) agent, was really hesitant about any kind of "you could probably add on here" kinds of questions that should really be answered by the city's planning department. However, about this:
For our last bid we also raised a question about some details that affected square footage. She basically said "good question, you should call the city and ask." I realize there's some liability here and that she is probably cautious about not telling us one thing and then having it not be true, but I felt like it was kind of a blow-off response.
Seems kind of lazy to me. Our agent went to the city and pulled all permits issued for the address of the house we eventually bought, as well as the county records, so we could compare the square footages and look at the house's repair history.
You sound like you want to fire her. You should do that.
I would switch agents. Be cool, say "I think we are exhausted by this project, and we are going to take a break." It's a business thing, nothing personal. The husband knows that things aren't exactly going very well either, and if you're providing him income, he shouldn't take it personally. (If he does, that sucks, and I'm sorry.) If you resume (with a new agent), that's not really any of their business.
As for your particular situation: I suspect I know where you're looking (MeMail me and we can talk specifics; I live here too.) And yes, it's really tough. If you're looking where I think you are, the housing stock is super-limited, and it's a really hot area for young families, so some element of this is going to be luck. Personally, though, I think that your agent (and this is going to sound bad) should have been pushing you to bid absolutely as much as possible for every house you go for. I mean, your No. 1 and No. 2 criteria are (1) walkable location and (2) schools, so whether this house is worth $1.3 or $1.4 is less important that just getting it. At this point, you want to get a house. So get a house. Bid at the top of your budget when something comes up that seems good to you.
Good luck. I know it sucks out here.
posted by purpleclover at 2:59 PM on February 6, 2014 [3 favorites]
What Gungho said. Also, you can usually make an arrangement with the Seller's agent (you take 1% and we'll take %4 of extra commission. You both still win and can up your bid.
posted by xammerboy at 3:20 PM on February 6, 2014
posted by xammerboy at 3:20 PM on February 6, 2014
We spent 2 years looking and bidding in the bay area. Our original agent was nice enough, and responsive enough but I just didn't get the feeling that he actually cared about getting us into a house. After our 20th or so bid was turned down, we decided to take a break. After about 6 months or so, we decided to jumped back in with a different agent. The difference was amazing. Our new agent gave us bidding advice which actually got our bid accepted. When it turned out that our house wouldn't qualify for conventional financing, he found us a lender who would do rehab loans. A year after we closed, he sent a nice email just checking in and letting me know what the comps say my house is worth if I wanted to look at refinancing. I could go on & on about our agent, but my point is, for the amount of money you're spending, you should be able to go on & on about your agent too. It's time for someone new.
posted by dogmom at 8:02 PM on February 6, 2014
posted by dogmom at 8:02 PM on February 6, 2014
I would not try to go without a buyers agent if it were me. A listing agent's responsibility is always to the seller. A buyer needs someone looking out for his or her own interests, particularly if there is negotiation to be done. Dual agency is a thing but in most cases the advantage is having an agent on each side.
BTW, your local MLS should display the final purchase price of any home you have put a bid on. You need to get your agent (or your next agent depending on what you choose to do) to let you know what the winning bids were. That will give you some idea of where you stand when you are doing the bidding.
BTW, I don't know anything about your market but do you have REOS out there? These are foreclosed homes owned by banks, or the VA, etc. That might be a way to pick up a home for less IF you are prepared to pick up any lender required repairs (the va at least will add those to the price of the home so you can pay them through your mortgage.) Just a thought. But bargains are to be had, and not all of them are trashed houses needing someone to flip them.
posted by St. Alia of the Bunnies at 9:16 PM on February 6, 2014
BTW, your local MLS should display the final purchase price of any home you have put a bid on. You need to get your agent (or your next agent depending on what you choose to do) to let you know what the winning bids were. That will give you some idea of where you stand when you are doing the bidding.
BTW, I don't know anything about your market but do you have REOS out there? These are foreclosed homes owned by banks, or the VA, etc. That might be a way to pick up a home for less IF you are prepared to pick up any lender required repairs (the va at least will add those to the price of the home so you can pay them through your mortgage.) Just a thought. But bargains are to be had, and not all of them are trashed houses needing someone to flip them.
posted by St. Alia of the Bunnies at 9:16 PM on February 6, 2014
I think any answers you're getting from people not on the peninsula are going to be irrelevant. It is hard to imagine how it is here, if you're not here.
There are some ways that a buyer's agent can help, but she is not going to compensate for you not offering a competitive bid. For instance, my buyer's agent helped me get my current place by doing a negotiation that I would have walked away from in confusion and despair had she not been there to navigate the (racially charged) waters; but at the end of the day, I also had the best bid.
So yes, a buyer's agent can be useful and a good one will have a network that gives her a heads up of stuff coming onto the market, etc. But, facts is facts. Do you know what the houses have been going for that you lost out on? Were they just going for more than you can offer? 20% down is not competitive for most of the peninsula. When I sold last year, half the offers I got were all cash. With 20% down you need to be making offers that are somehow better -- either faster or larger -- than what others are offering. So if you can't offer more money, you need to lower your standards for what you'll take in terms of square footage, etc.
One thing a good realtor should be able to do for you, and my realtor has done for me twice, is to recommend a neighborhood that meets my objective criteria. So I told her I want walking proximity to shopping, and excellent schools, and a safe and quiet neighborhood with excellent egress; and let her tell me where we should be looking. Maybe if you had a more knowledgeable realtor, she would be able to give you some ideas about other places you could look that would work for you outside of the tiny area you've been focusing on, where you could realistically find something in your range.
posted by fingersandtoes at 10:22 PM on February 6, 2014 [3 favorites]
There are some ways that a buyer's agent can help, but she is not going to compensate for you not offering a competitive bid. For instance, my buyer's agent helped me get my current place by doing a negotiation that I would have walked away from in confusion and despair had she not been there to navigate the (racially charged) waters; but at the end of the day, I also had the best bid.
So yes, a buyer's agent can be useful and a good one will have a network that gives her a heads up of stuff coming onto the market, etc. But, facts is facts. Do you know what the houses have been going for that you lost out on? Were they just going for more than you can offer? 20% down is not competitive for most of the peninsula. When I sold last year, half the offers I got were all cash. With 20% down you need to be making offers that are somehow better -- either faster or larger -- than what others are offering. So if you can't offer more money, you need to lower your standards for what you'll take in terms of square footage, etc.
One thing a good realtor should be able to do for you, and my realtor has done for me twice, is to recommend a neighborhood that meets my objective criteria. So I told her I want walking proximity to shopping, and excellent schools, and a safe and quiet neighborhood with excellent egress; and let her tell me where we should be looking. Maybe if you had a more knowledgeable realtor, she would be able to give you some ideas about other places you could look that would work for you outside of the tiny area you've been focusing on, where you could realistically find something in your range.
posted by fingersandtoes at 10:22 PM on February 6, 2014 [3 favorites]
Just an FYI: Realtors are not allowed to use contacts for "an edge" as such, once you're in the position of putting in an offer. We made an offer on house that was being sold by a colleague of our agent: they worked in the same office. We didn't get any extra info or insight or anything like that.
I assume that since you're in the Bay Area you're on Redfin. I used their site to get comps on the various houses we made offers on and tweak them in various ways. I looked at all the houses we liked or that seemed like something comparable to the one we were going to bid on. I was able to figure out that in our case, all the houses we would live in had sold for 25-30% over asking, which helped us decide what to bid on the house we finally bought. Look at all the places you've bid on over the last three years and see if you can discern a pattern. Have your agent get very detailed info about the offers you made that were rejected and why the winning bid was chosen.
We also got very general information on what we should bid: I think that a wise agent is only going to give you feedback on your numbers. They can't tell you how to spend your money. Make sure that you are writing offers that are as clean as possible. We did a pre-offer inspection to remove the inspection contingency, and had our loan underwritten to remove the loan contingency, just leaving the appraisal contingency. We didn't ask for any extras, and made our offer an easy one to accept as far as our means would allow. We offered less than 20% down and got our offer accepted on the third house we bid on.
The other thing you need to do if you want to get in this tiny, exclusive neighborhood is to start getting into bidding wars. Seriously, if you want it that bad, you need to be prepared to fight. It sucks, and it is exhausting. But you're either going to need to step up the game or lower your expectations. There are many people here in the same ballpark as you, wanting exactly the same things.
You can still fire your agent if you like. But I am not seeing anything that says she is doing a particularly poor job. It may not be a good fit though anyway. At the same time you need to give yourself every edge you can, even with a great agent.
posted by oneirodynia at 11:59 PM on February 7, 2014 [1 favorite]
I assume that since you're in the Bay Area you're on Redfin. I used their site to get comps on the various houses we made offers on and tweak them in various ways. I looked at all the houses we liked or that seemed like something comparable to the one we were going to bid on. I was able to figure out that in our case, all the houses we would live in had sold for 25-30% over asking, which helped us decide what to bid on the house we finally bought. Look at all the places you've bid on over the last three years and see if you can discern a pattern. Have your agent get very detailed info about the offers you made that were rejected and why the winning bid was chosen.
We also got very general information on what we should bid: I think that a wise agent is only going to give you feedback on your numbers. They can't tell you how to spend your money. Make sure that you are writing offers that are as clean as possible. We did a pre-offer inspection to remove the inspection contingency, and had our loan underwritten to remove the loan contingency, just leaving the appraisal contingency. We didn't ask for any extras, and made our offer an easy one to accept as far as our means would allow. We offered less than 20% down and got our offer accepted on the third house we bid on.
The other thing you need to do if you want to get in this tiny, exclusive neighborhood is to start getting into bidding wars. Seriously, if you want it that bad, you need to be prepared to fight. It sucks, and it is exhausting. But you're either going to need to step up the game or lower your expectations. There are many people here in the same ballpark as you, wanting exactly the same things.
You can still fire your agent if you like. But I am not seeing anything that says she is doing a particularly poor job. It may not be a good fit though anyway. At the same time you need to give yourself every edge you can, even with a great agent.
posted by oneirodynia at 11:59 PM on February 7, 2014 [1 favorite]
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Remember she doesn't get paid if you don't win the bid and every offer she writes is work on her part. That being said the issue could be ...is she giving you the best advice on what your bid needs to look like to be successful?
posted by St. Alia of the Bunnies at 11:07 AM on February 6, 2014 [3 favorites]