patrick.net

cash talks BS walks!

The selling realtor is ethically obligated to present all offers to the sellers. Whether or not they will depends on the realtor.

I would think you really can't anticipate what kind of realtor, and what kind of seller you're dealing with until after you've gotten into negotiations with them.

My advice to you is to find yourself a buyers agent in the area you like/trust, and submit your offer. The buyers agent costs you nothing (the selling agent pays for it out of their commission), and the selling agent may be less likely to try any funny business when there is an honest, motivated broker on the buying side of the transaction.

Good luck with your purchase, and if I can offer any advice about renting/managing/maintaining your new rental unit, please let me know. I'm too happy to help out.

Dear Malkovich

my advise: firstly I think the idea of a duplex is dam good. i would get into one with out a dividing wall and if you do share a wall try to make sure it is the garage or some place. may be that you are diff from me but a man likes his private time and this sure helps.

now number 2: fixer upper is a blessing in disugise. you can make it custom to your needs and clean it up as you go. as long as they is one room whereabouts you can sleep and cook your meals in cleanliness then you will be okay. you fix one side and sleep in the other

make your offer to BOTH the owner and hes agent in writing. make sure always to do this.

Malkovich says

What is the best strategy to present a low-ball offer? For example, say I found a place I'm interested in that is around $400K and I would like to offer $300K (and possibly negotiate just a little up from there).

1997 prices + inflation (30-40%), so find out what homes in your region went for back in the day... cause thats where they are heading. You might save $50-100K.

http://www.housingbubblebust.com/OFHEO/Major/NorCal.html

JodyChunder says

make your offer to BOTH the owner and hes agent in writing. make sure always to do this.

Yes. Never trust the Realtor to relay the information, you need to submit to both. Make sure to inform the seller on the written offer you have submitted to both so that the seller can see if the Realtor is doing their job.

Katy Perry is correct. If you want to make an offer that is, say, 25% off the asking price, you better have all cash to go with that. I have no problem making low~ball offers. The way I work is I deal directly with the listing agent. Bringing in another agent will not work in your favor with that much of a discount. The listing agent will not have any incentive to present your offer in the best light. If you are able to contact the seller, then make your offer to both of them, to make sure your offer is seen. Another thing that might help is to have no contingencies of any kind. Of course, you have to be willing to take a risk. If you find out, later, that the duplex is falling apart you will be stuck with it, but putting an inspection contingency on a purchase offer that is 25% below the asking price must have some sugar from your side, otherwise, the seller won't agree to it. Another thing, and this applies to your situation: duplexes are few and far between (in most areas) and are therefore, tough to get comps on. Sellers know this. Let them know that you know this. By removing contingencies you will have no need for comps. Obviously, you need to do your homework before hand and make sure that the amount you are offering is truly a bargain price for the property you intend to buy.
This is what I would do if I were in your shoes. You should choose the method that you think will work for you. I wish you good luck in negotiations.

Thanks, everyone, for your informative replies.

I won't be making a cash offer nor am I willing to submit an offer without contingencies. At the very least I'd scope the sewer and have someone inspect the foundation, plumbing, wiring, etc. This obviously costs money. Money which I would not want to spend if a seller is not going to meet my price.

I suppose if a property is truly overpriced then one of two things will happen: 1. It will languish on the market for several months. The seller may or may not come to grips with reality. 2. Some "investor" or other buyer will come in with an offer at the asking price and they'll be the suckers - I prefer to be on the other side of such a deal.

WillyWanker (nice name) you are absolutely correct when you say the comps are sparse at best for multis. For the previous year I found a total of about 10 within a $50-100K range in the zip code and neighboring areas of the property I am looking at.

I think also with the way the market is going (which is "Who the F knows?") it is also difficult to properly gauge the worth of a property. For example, how relevant are comps from 2009? Are prices today more or less? Hard to say, particularly in the thousands of micro-'hoods in the cities of the Bay Area.

Thanks again.

Malkovich says

the houses are in decent, albeit transitional, areas (North Oakland/South Berkeley)

I live in Florida. I know nothing about CA real estate, but even I know that you want to stay out of Oakland, CA. Isn't that the murder capital of the world? I hear each year they have a contest to see if they can get a higher body count than last year.

Oakland is the 6th most dangerous city in America and the #1 most dangerous city in California.

http://xfinity.comcast.net/slideshow/news-mostdangerouscitiesinamerica/6/

Oakland, Camden, NJ; Baltimore, Detroit... all great places to live if your a gang banger.

Well I lived in Cypress Park for 3 year. I am still alive. met good souls there. still stay in touch. good looking homes. good people are everywhere. so are bad ones. to many snobby attitudes

Can't speak for those other cities but the neighborhoods in Oakland vary widely from multimillion dollar homes in the hills to the ghetto to everything in between. There are a lot of interesting transitional neighborhoods in Oakland. To me it is a good opportunity to find a duplex I can afford in an area I would feel comfortable living in.

I figure if you really don't care if you get it or not when they ask for more money, offer less than your original offer, along with a note that the longer you wait, the lower the prices on housing gets.

when submitting lowball offers I always add one line:

Because I am acting as my own agent, this offer reflects a 3% reduction in the RE agent fee. (Or cuts the RE fee in half, as appropriate)

This should get the seller's attention (the agent's attention too)!

Hey now! Don't be knocking Oak Town you Guys it just has a bad rap.

Great location great weather and Awesome culture. Just don't sell drugs on the street corner and you'll be fine

StoutFiles says

JodyChunder says

make your offer to BOTH the owner and hes agent in writing. make sure always to do this.

Yes. Never trust the Realtor to relay the information, you need to submit to both. Make sure to inform the seller on the written offer you have submitted to both so that the seller can see if the Realtor is doing their job.

Another newbie question: How does one go about getting the name and address of the seller? Thank you.

Well, the address of the seller is usually pretty obvious!

It's usually that very house that is for sale. Just send them a letter. Or heck, go knock on the door.

For names, there are a bunch of possibilities. You could use a county website to see who has been paying property tax for that address. You could also try a reverse telephone directory on the web. I think some of them let you enter an address and go from that to the name and phone number.

Thanks Patrick. I am actually looking at duplexes and tri-s.

In some rare cases the MLS listing does say the owner lives in one of the units. But I get the feeling most the multis I am looking at are owned by small-time landlords that do not live on the premises. Sometimes the houses are completely vacant.

The county website sounds like a good idea though. Thanks.

Low ball the fuck out of them-all they can do is say no...or maybe something a little more colorful?

gammer99814 says

when submitting lowball offers I always add one line:

Because I am acting as my own agent, this offer reflects a 3% reduction in the RE agent fee. (Or cuts the RE fee in half, as appropriate)

This should get the seller's attention (the agent's attention too)!

That's ridiculous! The selling broker is going to get the commission agreed upon in his listing agreement no matter what you offer, or how much you "mark down" your offer. If you have a buying agent, the selling agent will pay for that out of their commission, if you don't have a buying agent, the selling agent will double end the commission, and there isn't anything you can do about that as a buyer.

If you want half the selling agents commission, become a realtor!

APOCALYPSEFUCK is Tony Manero says

Take a shit on the lawn.

Correction: LEAVE a shit on the lawn. Taking someone else's shit could be considered theft punishable by prison time.

You're welcome.

sorry propmgrjay, I have done this on both sides of the transaction and it works by writing it into the contract to superscede any previous contract. when I am provided a lower offer, I also write in that as part of the acceptance, the realtor takes a portion off their proceeds to offset the lower sales price. It sure puts a stop to countless back and forth negotiations.

I have done this in CA, NC, SC, TN ! you should hear them squeal when they make so much less for doing nothing. LOL. I got one agent down from over 20K to under 10K on my sale, saved 15K for the seller on another property.

RE agents are going the way of the DODO, the computer has changed the business. you only need an agent if you are unfamiliar to the area.

North Oakland is solid. That's not really the hood. I dont think any offer for 25% below asking price is gonna go through unless the property has been on the market for ages.

toothfairy says

North Oakland is solid. That's not really the hood. I dont think any offer for 25% below asking price is gonna go through unless the property has been on the market for ages.

It's different where I live.

lol

propmgrjay says

That's ridiculous! The selling broker is going to get the commission agreed upon in his listing agreement no matter what you offer, or how much you "mark down" your offer. If you have a buying agent, the selling agent will pay for that out of their commission, if you don't have a buying agent, the selling agent will double end the commission, and there isn't anything you can do about that as a buyer.

Who cares? He drops the offer by 3% regardless, to make it plain, "I will not pay 6% when I'm not using my own agent...you only get 3%". (and don't give me that "buyer's agent is free bullshit) Whether or not the seller agrees to uphold the listing contract and fork over 6% after the sale, and take it in the ass on his sale proceeds as a result, is their problem. But the buyer gets his point across and pays 3% less.

Or the selling agent can go into caniptions, as the seller tries to argue for the buyer's offer and questions the commission structure of the contract they signed.

Either the buyer pays 3% less, or at the very least he gives the selling agent fits and sets the seller against their own agent. Either way, I score a victory for the prospective buyer, even if the latter is merely a karmic victory.

And BTW I work short sales for a living, and realtors constantly cough up commission to get deals closed. At some point the months of work they've put in necessitate they accept a cut rather than torpedo the deal. And my company absolutely refuses to pay more than 3% to any one agent, regardless of the structure of the contract. If the agent refuses to give up the contractually-agreed upon 6% (when they state they are representing both sides) then our investors simply decline the short sale. Faced with either fucking over the seller, their own client, by refusing to take less than 6% just for themselves, or rewriting the damn contract and closing the sale, agents always opt for the latter.

toothfairy says

North Oakland is solid. That's not really the hood. I dont think any offer for 25% below asking price is gonna go through unless the property has been on the market for ages.

Mmm.. *parts* of North Oakland are solid, yes. That still doesn't mean there aren't irrational sellers out there.

For example, this place: http://www.redfin.com/CA/Oakland/410-45th-St-94609/home/1403725

I am not interested in this property but it is a fine example of a stupidly overpriced listing. I looked at it. The entire first floor needs to be stripped to the studs (actually, most of it already is) and completely redone. I didn't get in to see the upper flat but from the pics it also looks like a shithole in need of some major renovation as well.

The exterior stucco is falling off the building and there may be some foundation issues - there are several angles that are way off - you can see them just by looking at the exterior.

The "house" in back, which is more like a shack, is a tear-down - the roof is caving in. Not to mention there is a protected (and very grumpy) tenant living there. The garage is the only thing on the lot that doesn't look like it is going to topple over at any moment.

$435K? I would say more like $300K, if that.

Again, I have no interest in such an extensive project but am merely using this as an example of a property that is priced at least 25% too high and is in need of some ultra-lowball offers to bring the seller and listing agent down to earth.

But I could be wrong...

yeah hard to say on that one. I'd probably be interested if it were priced at 300k. You need to do 3 kitchen remodels not sure how many baths but you could be looking at 100k in fixing costs.

But the location is pretty spectacular being walking distance to MacArthur Bart. Buying a fixer in that area might be a good investment because those will probably go up in value.

just noticed this one in the same area is much nicer but looks like it's already pending
http://www.redfin.com/CA/Oakland/486-41st-St-94609/home/528112

Yes, the 4plex at 496 41st is probably a decent deal. A Redfin realtor had written it had foundation problems but couldn't have been that crucial as it eventually sold. I wasn't interested as I want to owner occupy and prefer 2BD and a garage.

I was actually keeping a close eye on the property next door: http://www.redfin.com/CA/Oakland/482-41st-St-94609/home/1855152 It started at close to $500K then had a couple decreases in price. Was wondering what the final sale price would be. Went pending at $415K.

You should offer $300K on the 45th street property. Fix-up the main duplex as you like and completely gut the structure in back and turn it into some green/sustainable cottage. Some modern water wise landscaping would be the cherry on top. Sounds like you have the know how - why not?

I can do fixer uppers but I like to take my time so there's no hurry to get it rented. Not sure I'd want to have to carry the mortgage on that place while trying to fix it. At the speed I work It could take up to a year to get the thing completely done.

Plus I already have my
I have my hands full with a fixer I bought in the spring
and the last thing I need is another 3 more kitchens to redo :)

Schizlor says

Who cares? He drops the offer by 3% regardless, to make it plain, "I will not pay 6% when I'm not using my own agent...you only get 3%". (and don't give me that "buyer's agent is free bullshit) Whether or not the seller agrees to uphold the listing contract and fork over 6% after the sale, and take it in the ass on his sale proceeds as a result, is their problem. But the buyer gets his point across and pays 3% less.

There's nothing you can to to reduce what commission the selling broker receives. No matter how you try to rationalize it in your own head. If the seller signed a listing agreement with a 6% commission of the final sale, there's absolutely nothing you can do to prevent them from getting that.

If you submitted an offer to me for a property I owned, I would laugh really hard (that's how I respond when I encounter stupidity), then I would reject it.

Your hatred for realtors/brokers has nothing to do with the contract the seller signed with his broker, and nothing to do with what the seller will accept as an offer to purchase.

gammer99814 says

sorry propmgrjay, I have done this on both sides of the transaction and it works by writing it into the contract to superscede any previous contract. when I am provided a lower offer, I also write in that as part of the acceptance, the realtor takes a portion off their proceeds to offset the lower sales price. It sure puts a stop to countless back and forth negotiations.

Hi Gammer, I'm not clear on exactly what you're saying you've done. Are you saying that you wrote an offer that supersedes the sellers listing agreement? That can't be what you mean. Ofcourse you know you can create a contract with the seller that makes a contract with the seller has already signed with their realtor null/void.

gammer99814 says

RE agents are going the way of the DODO, the computer has changed the business. you only need an agent if you are unfamiliar to the area.

That's not true at all. It is true that many people no longer need a realtor because technology has increased access to information, and as that has improved, many people have become much more knowledgeable about buying and selling real estate, but not everyone is in that boat. While there are many people in the market who are actively buying and selling, most people aren't actively involved in real estate, and those people, whether they end up choosing to use one or not, frequently need one.

The average home buyer has become much more knowledgeable, and that's a great thing. I also anticipate a lot of poor performing realtors will be pushed out of the industry, which I also think is a good thing, but the Realtor definitely will not completely go away... Not during my lifetime, anyway.

You could do your own taxes too... And if you do, good for you. But you can't be a jack of all trades, and be a master of all of them. There will always be people who need/want a tax preparer, an attorney, and a realtor to assist them. I do know, however, that it's cool to hate realtors on patrick.net. That doesn't bother me. You keep doing what you're doing... You're not taking any food off my table ;)

Schizlor says

my company absolutely refuses to pay more than 3% to any one agent, regardless of the structure of the contract. If the agent refuses to give up the contractually-agreed upon 6% (when they state they are representing both sides) then our investors simply decline the short sale. Faced with either fucking over the seller, their own client, by refusing to take less than 6% just for themselves, or rewriting the damn contract and closing the sale, agents always opt for the latter.

Sure a realtor can voluntarily change their contract with the seller, but they are not obligated to do that, and they aren't screwing the seller by not doing. I don't know of any realtors selling homes where I live taking a 6% commission, and on a short sale, the realtor does so much more work than a regular sale, a 6% commission is even more appropriate, regardless of what your company does or says. The selling broker definitely wouldn't be screwing over the seller by not tolerating your extortion tactics.

Hey! All you have to do is join the board of realtors, and you'll ensure the selling realtor has to split the commission with you... But that would require you adhere to the ethical standards of the board of realtors, like not being able to make any secret/undisclosed profit, etc... And we all know you wouldn't want to have to do that now don't we?

APOCALYPSEFUCK is Tony Manero says

Joining the local NAR coven is the functional equivalent of getting a certificate of achievement from the Jeffrey Dahmer School of Culinary Arts. They may have professional affiliation but you don't want to eat anywhere one of their members works.

propmgrjay says

All you have to do is join the board of realtors, and you'll ensure the selling realtor has to split the commission with you... But that would require you adhere to the ethical standards of the board of realtors, like not being able to make any secret/undisclosed profit, etc...

Hahahahahahahaha..............