patrick.net

I have to say that I agree with azrob. When you guys go buy a used car, do you expect the dealer to tell you exactly what he paid for it? Or what the current market price is for that make and model?

Come on--it's not that hard. Do your research, come up with what you value the house at and bid low enough that you still have room to negotiate and remain below the number you think the house is worth. Whether there are 0 bids or 100 bids shouldn't change a thing. You bid what you think the house is worth--and no more. If you choose to raise your bid above what you think the house is worth, it's not the realtor's fault--it's YOUR fault.

In 2000 I was selling my home as a FSBO and had general interest from a few buyers. But it dragged on and I listed the home for two months with 5% added to cover the commission. The listing contract excluded all of the FSBO visitors and I notified all of them that they were excluded from the listing contract. I continued trading emails with two FSBO buyers until one of them lost one income and dropped out. Near the end of the two-month listing contract, the agent called with an offer, which was below my latest FSBO offer after his commission. He called back that same day with a full list price offer, which I accepted - it gave me several thousand more over the FSBO offer.

The FSBO buyers were willing to go higher but I took the agents offer, expecting his help in moving the deal to closing. Big mistake; he all but disappeared, leaving me to handle the buyer's home inspector visits and several other questions. But it did close at the full list price. Later I learned he had lied to his buyers, letting them believe they were competing with another agent's buyer.

In buying and selling six different homes, I have met only one truly qualified RE agent; even he was playing games but lived up to his word when pushed.
RCharles

We said "no our offer stands as is, along with its deadline" when told to submit our "best and final" because there was a competing offer for the house. They caved and we got the house--without blindly handing over another 5-10K. We assume either the other offer didn't exist or was less all along.

A friend of mine put his house up for sale recently. They received multiple offers - and were selling FSBO. The realtors who submitted offers were condescending asses who insisted that before they submitted the offer my friend sign an exclusives sales agreement. He didn't.

He called the people who said that they were interested in offering and told them that the sales price was solid, it was first come/first served and that if they were going with a realtor they would have to pay the commission above and beyond the price he was asking. A realtor told him he'd never sell that way and would be blacklisted by the local NAR.

He ended up getting his sales price plus $10k, their buyer's commission was added above the price, and the buyers were happy. The realtor who had threatened him was not - it was a case of him having to be right, not him having to sell the house. That realtor actually tried to get the name of the buyer's agent to get him to back out.

I realize that Realtors believe that they're necessary. Sometimes they are, like when a person can't show the house themselves 'cause they live out of town. But the sellers still have to do alot of work and the realtor doesn't do much. IMHO, of course.

I recently saw a good deal of rotten behavior on the part of listing agents, on the property I purchased recently. The trustee of the estate and I became friends out of the deal, and the things she said had me amazed.

1) Her agents told her she shouldn't list on the MLS, then...
2) Told her the highest offer was 50k (for a 3 bedroom, 1 bath 1/2 acre flat and usable horse property in a great part of Canyon Country) from investor "friends" of theirs, then...
3) After she insisted it get listed on the MLS and was, and I put in a full-price (210k) offer with 20% down, they tried to get her to instead accept a 120k offer from more "friends" of theirs. She accepted my offer and then...
4) They have done everything they could since, to queer the deal - not telling her when papers under deadline needed to be signed, not answering or returning phone calls from my agent, not returning her calls, giving her no info at all on what was happening. Everything she learned, she got from me. They didn't even let her know when the property passed the appraisal over asking price.

Honestly, I have little respect for the average agent. What I have seen the past 25 years revolts me, and I have only mentioned what happened on my own deal in the past month. I respect MY agent who has been scrupulous and honest, but he was a friend of mine years before he became my agent, so we have a different relationship than most.

Well, back in January, we loved a house and responded with an offer $100 over asking. Of course, we found issues during the inspection that had us backing out. We have no regrets are quite lucky. The latest house "has someone else interested". I said, let me know if that doesn't work out, see ya.

repo4sale says

I want to see the CASHIERS CHECK BIGGER THAN THE ASKING PRICE ATTACHED TO THE OFFER!

These guys look like they should be selling used cars at the We Finance Used Car Lot.

Perfect accessory for today's Real Estate "professional".

azrob00 you are using a classic straw man. If you advertise an asset well below market then yes you are likely to see more interest. What does this have to do with the question asked? If you re-frame the question to suit yourself and you can always claim you are right.
It is interesting that you have never seen or heard of multiple offer fraud if you are a RE "professional". I bid $20k under for a property that had "multiple offers" and mysteriously I won. There are several hundred articles in mainstream newspapers that have discussed the issue over the years. So is everyone else stupid as you claim or is a look in the mirror in order?

what m1ckey6 said.

m1ckey6 says

azrob00 you are using a classic straw man. If you advertise an asset well below market then yes you are likely to see more interest. What does this have to do with the question asked? If you re-frame the question to suit yourself and you can always claim you are right

What question are you referring to? The original poster?

I think there are some pretty shady agents out there, and then as azrob00 said, there are agents that list for well below market to generate interest. It's an asking price. It's not a selling price. They are taking offers on the house. You make an offer and then they decide which one is going to work for them. If they need to sell quickly and you've got a dozen contingencies that will take time to meet but are offering more money, you're probably not going to win.

A buyer is looking for the best offer that meets their needs as well. Buying a house includes a bunch of different aspects.

It seems that everyone is looking for the cheapest house on the market, and then trying to offer even less. Then bitching when they don't get it, because they hear others are offering less and getting those houses. Those others are most likely offering on houses listed at close to market, not at some massive discount.

It's just part of the buying process, you should evaluate what the house is worth and put a bid on it based on that. That is a fair offer. If they counter with "lots of bids on this house already!", it shouldn't effect you. Your bid is based on the value. If you're trying to buy a house from someone who WANTS it, you're going to over pay, always. People who want something, will pay more than market value for it.

Of course, if I was a seller, I sure would want others to know what the bids were. Nothing creates emotional attachment, like when you think you're going to lose a house, and others are getting into a bidding war over it and you can see what they are valuing the house at. Hiding bids puts the onus on the buyer to evaluate what THEY think it's worth and what others might consider it's worth. When you see what others are offering, you'll re-evaluate and likely offer even more, and a real bidding war will start.

Of course that would just open up a whole new shady business of hammering someones house value down into the ground. Having 8-10 low balling a house, and making it so that anyone with a realistic offer is going to redo their offer to beat the highest low baller.

If you've got legitimate buyers, letting them know what the other is offering is going to really going to help your bottom line. Of course the downside is horrendous. Organized low balling would just decimate the market. I'm betting the downside is far greater than the upside everyone would be hoping for here.

We made an offer on a fixer. It was an REO. Our offer was based purely on what our realtor believed it was worth. We agreed with her market analysis. We then factored in repairs. The banks realtor got back to us (two weeks later) and said there were multiple offers, and we were to submit our "highest and best offer." We liked the house, so we offered a few thousand more. Two more weeks go bye. They countered us with an over the listing price offer. That's when we got angry. We rejected their counter. We moved on and kept looking at other houses. One week later, our realtor calls us and asks if we're still interested in the original house. We said yes. However, we told her to make an offer LOWER than our first original offer. She was silent at first and then burst out in laughter. She said no one had ever done that before! She submitted the offer and it was accepted by the bank. The house is now ours and we couldn't be happier!

Azrobb 00 wrote: "As for rentals, same thing. The last time I advertised my one remaining rental on craigslist, I had three parties show up to rent it at the same time, and they bid it up by $50 a month, even in this poor rental market."

I am a landlord and I just rented one of my houses out on the 1st. The management company had several tenants show up and on a particular day I just happened to be there going through applications that they approved (FICO, jobs, no evictions, etc.) As I was going through these applications, there were 3 couples that came into the office at the same time. I would never even think of bidding up the price like you did. I believe that is unjust, unfair and unethical. You are a vulture and I wouldn't be able to sleep at night if I did something like that. I have immaculate homes and I get great tenants. The management company and I treat my tenants with respect, not people to be preyed upon with bidding wars for a property that is worth X amount per month. I have never had an eviction and only 2 late payers in 17 years of being a landlord. My advice to anyone renting would be to run as fast as you can if the landlord is putting the squeeze on you to bid up the price of a rental property.

tatapu70,

azrob00 was setting up a strawman argument by citing a case where he would get bona fide multiple offers by listing the house at a low teaser price exactly for the purpose of instigating a bidding war.

Does this contrived counterexample prove anything about the prevalence of multiple offers for listings that are just "competitive" with other listings, rather than teaser listing? No, it does not, and that's why m1ckey correctly called it a strawman argument.

justme says

azrob00 was setting up a strawman argument by citing a case where he would get bona fide multiple offers by listing the house at a low teaser price exactly for the purpose of instigating a bidding war.
Does this contrived counterexample prove anything about the prevalence of multiple offers for listings that are just “competitive” with other listings, rather than teaser listing? No, it does not, and that’s why m1ckey correctly called it a strawman argument.

I agree that there are unscrupulous real estate agents. No doubt about it. But, I disagree about the strawman.

Think of it this way. Would you be more likely to bid on a property that is priced below market value or above market value? Below market value, of course. And so would everyone else. So, it makes sense that those properties get the most action and visibility. I don't find the counterexample contrived at all. Do we know that there is a prevalence of multiple offers for listings that are just "competitive" with other listings? Or are they mostly on below market value properties? Note-I'm not saying everyone listed below market value on purpose. Maybe they underestimated the value, maybe they had a poor realtor, who knows?

In any event, who cares. Like many others have said--it's easy to win that game. Don't raise your offer.

I posted a modest proposal similar to Vain's, on a different forum.

AB 1721 (Koretz-D) Prices: overcharges
Prohibits any person, at the time of sale of a commodity, from charging, as defined, an amount greater than the price, or computing an amount greater than a true extension of the price per unit, that is then advertised, posted, marked, displayed, or quoted for that commodity.

http://www.sen.ca.gov/sfa/2003/_03_DL03.HTM

Why shouldn't this law be applied to houses, and compel the seller to sell at their listed price, exactly?

After all, if you go to a grocery store, and a carton of milk is priced $1.99, the checkout clerk will take your $1.99 for it - instead of saying that there are multiple offers for this carton, and to put down your highest and best.

If real estate cannot be sold at higher than posted price, it would force all listings to have realistic pricing and prevent bidding wars.

tatupu70 says

Would you be more likely to bid on a property that is priced below market value or above market value? Below market value, of course. And so would everyone else.

I disagree - I bid what I value the house at. Listing price don't mean diddly to me. Now, the other side of the coin is, REwhores refuse to submit an offer (on REO's especially) that THEY fell is below what THEY feel is "market value". SO it is REwhores that have an issue. "Market Value" will only be known when the buying programs are removed.

alex says

If real estate cannot be sold at higher than posted price, it would force all listings to have realistic pricing and prevent bidding wars.

So, you need a law to prevent you from bidding too much?

Bap33 says

“Market Value” will only be known when the buying programs are removed.

I disagree. There is a different market value with the incentives, but there IS a market value...

alex: housing isn't a commodity. You might want to dig out an economics textbook, housing is an asset class.

I don't like the low teaser listing prices, and I especially don't like really low prices that aren't market as auction or bid on the mls, because they give unrealistic ideas as to market price. Mark as auction or bid, and then who cares, you've disclosed your intentions. Then again, you have unrealistically priced short sales, which the bank will later come back with a higher price on. So it is what it is, hardly worth crying like a small child about.

All of this "they should have to sell at list price, it's so unfair that somebody outbid me"waah waah waah, won't some cries to go with your whaaaamburger? Or you could just try growing up, offering what you are willing to pay, and walking away if that doesn't win; If they don't truly have other offers, they will take yours as it is.

Regardless of how the laws are written, housing prices will be able to fluctuate and people will find ways of offering more than the asking price by having little add on items to their offers. They will get creative.

People will always try and get a little more for their house, it's special in some way to them. Or they think they can get extra because someone else thinks it's special. Whatever, the reasons, they will try and get the most for their house possible.

That being said, as a buyer, it's simple. Do your own research. It's your largest purchase you will ever make, *DO* research. Find out what it's value is. Offer that value, or less if you think you can get it.