patrick.net

http://southflorida.bizjournals.com/southflorida/stories/2009/09/14/daily52.html

An opportunity to stand out? You played along with this for that house? I've owned three houses in my lifetime. I've found this simple fact to be absolute truth: There are always other houses.
Think about this for a second. Will you really want to pay that much money every month for a little 1200 sq ft house? To live there would be north of 4500/month I guess because there are taxes and insurance to consider. How much would that be for 30 years? If you have to move can you resell it? Note carefully that the door appears to be mis-hung. Hmm. 1.6 Million total after 30 years for that?
I'm sure that once you think about it for a while, you will be relieved that you didn't get taken in on this.
Roidy

Heres the thing. Anyone that would buy a house. With a price like that. Should have their head examined. Or should check into a mental facility. It's nothing personal mind you. I would if you were my neighbor. I would speak to you in gentle low tones. So you won't get riled and start making noises like a excited barn animal.

It's a negative equity real estate market. I would whisper to you. Please don't get upset and I would add and please don't eat my dog. Then maybe a person with rabies might say: the market has bottomed out. People with rabies can't see very well so I am sure they can't read either. The equity spread on that deal sucks. Probably because the owners have their ass over their head in the loan.

Good luck for the next opportunity.

No offense Yellowstone, but..ever hear the saying god protects fools and drunks? IMO you'd be better off renting than buyinganything at this point, let alone some jumped up shack like the one you withdrew from.

You listen to your agent and your are SCREWED. Remember this is how the bubble formed. I'd ask the agent to put 400K offer and move on to next. Desperate buyer like you are delaying the correction in prices(Sorry).

Yellowtone,

I don't want to jump on the bandwagon at this point, because you are getting beat up pretty bad. You did well in telling those sellers and agents to forget it, you will find another house. I am assuming you are renting, why would you want to go from paying 1800/mo. to over 3K/mo. just to say that you own it? My advice is to continue renting, and go something else (vacation home in Mexico, boat, ferrari, whatever) with the 250K that will satisfy what you feel you are missing by owning.

I will say that it really irritates me that someone who has saved up 250K and makes anywhere from 150-200K per year (which is what you'd have to make to afford that house) can also almost make a decision this dumb. What do you do for a living? Can I have your bosses phone number?

chrisborden says

I said goodbye to him instantly and sold the house myself three weeks later to a drive-up buyer the next day (they paid cash), pocketing the agent’s $23,000 commission and nearly making up for my price reductions.

Excellent! Sounds like your would-be broker was a "professional lister." That is, the broker just wanted the listing so that when the house eventually sells, he will get a piece of it. In the mean time, he will put no effort into selling your house, but spend all his time hustling new listings.

I worked with an agent who knew I was interetsed in buying a place. He had a sale pending on a 3 BR condo. I wanted to place a bid at $530,000 but he said that was not high enough. My gut told me something was wrong with the picture because I knew the neighborhood well. In fact, the agent steered me to other properties that he was selling.
The condo closed at $515,000. If the seller knew they could have had a $15,000 increase in the offer, they would have taken it, right? Instead, the agent thought he could keep the sale on the condo and try to get me on another house so that he couls have two commissions.
I dismissed the guy for this questionable perceived practice.
Incident#2: I bid $730,000 on a house. The selling agent said that I needed to go higher. I declined and the house sold at $728,000.
Beware of any real estate agent in a private treaty sale. You could end up bidding against yourself or they may take the lower price and try to move you into another place to get the second commission.

chrisborden says

Last time I sold a house (I dumped it because that particular market had begun to implode), I told my “agent” that I was going to drop the price $10K a week until the house sold. He said he could not abide with that because it would cut into his commission. I said goodbye to him instantly and sold the house myself three weeks later to a drive-up buyer the next day (they paid cash), pocketing the agent’s $23,000 commission and nearly making up for my price reductions. I paid a lawyer $4K to draw up the papers. The sale breezed through with zero hitches in five days. Who needs agents?

What a piece of shit. God I hate f-ing agents, and hardly a day goes by without more anecdotal cases of their non-stop douchebaggery. Congrats on the sale, and for not wasting your money on that human slime.

I've got one, too. I just bought a rental property in a huge, cookie cutter neighborhood. The seller's agent told my agent that the seller had rejected a bid of $125k so I bid $127,500 and she rejected that, too. I gave a final offer of $130k and that was never responded to.

A week later, my agent called to say that the seller had decided she'd take $135k so I signed a contract on his recommendation. When I left my agent's office, I promptly got on the internet and found that a comparable home sale had just been recorded for $128k. Yeah, I felt like an idiot. It appeared that the seller's agent also found the information and used it to his and his client's advantage. My agent had no incentive to look for more recent comps or to tell me if he found one if he did look. I paid too much and he made more money.

I don't belive the part about there being 7 offers on the house either.

$600k for a 1200sf home in San Jose?!?!? I'm sorry but it's buyers like you that keep the ridiculously absurd bay area real estate market as inflated as it has been and still is in most areas. You're part of the problem not the solution.

"I told my agent I hate the seller playing this trick, and consider this a >>greedy

zzyzzx says

I don’t belive the part about there being 7 offers on the house either.

I know real estate agents lie too often, but this time I am taking his/her words in face value. However, overall situation described by Mr Yellowstone tells me that the greedy seller did not have any offer in hand which he/she considers good enough (afterall he/she is greedy).

Keep in mind that the property is in market only for one week. The seller is yet to hit the reality of current market condition. Due to this reason, he/she confused WHETHER to accept any of these offers and move on OR wait for a few more days/weeks because someone might make an excellent offer he/she was dreaming all along.

Wow, this process sounds awful. Yes, the price sounds awful, too, but in general it sounds as though this process does not respect the buyer at all.

For what it's worth, I wouldn't have played their game, either. And I would take the selling agent's barbed comments with a grain of salt. It is entirely possible that your offer was the highest offer on the table, and that they regret losing it. Or that they wanted to play you against the other buyer for awhile longer. Or that there was no other buyer. Regardless, there was no need for the Realtor (TM) to send the nasty little note wishing you well and also implying that you had somehow done something wrong and did not deserve the house. That was mean and unprofessional. You made a generous offer and a reasonable decision. I hope you don't let that evil little note get under your skin.

A woman I know sold her little tiny place awhile ago--just as the market was turning. She and her husband had put in a lot of sweat equity, and they made life terrible for their buyers. Letting go was hard for them, and they had expected more money for all their hard work, so they made life miserable for their potential buyers, asking for letters and money and general groveling. In the end the seller got really hung up on wanting an extra $5K. She almost refused all offers over that $5K, which was silly given that it was a $610K house at that time and the market was clearly starting to turn. Sometimes the emotional piece runs the game.

Realtors are just like used car lot salesmen (or many other salesmen for that matter) they will say and do anything to make a buck often at the expense of the buyer. That being said, this is the nature of the beast. This will not change until the terribly outdated institution of having unnecessary middle men in residential real estate transactions. Now, to play devil's advocate - the realtor is doing their due fiduciary diligence to the seller(if...and that's a big if) the scenario you described is true - after all - a Realtor's job to a seller is to try to get the highest price possible (hopefully in a ethical way)

Again, I acknowledge they may have lied about the number of offers and are just pulling your chain...that is certainly possible - but that is a *risk* they are willing to take if they demand a counter offer and you are the only qualified high bidder (and you abandon the deal as you did.) If they indeed had 7 offers, and your offer (along with the other so-called 'high' bidder') is reality - I agree the seller/agent is indeed trying to milk you and the other party for more money. I just want to remind people that is something they are perfectly legal allowed to do.....I think what pisses you off is the disingenuousness way they presented it (seller attached to the home crap)

You quoted Bill Gates yourself..."life is not fair...get used to it." You'll find the similar tactics in almost any other type of commission based sale.....so 'get used to it." at least until the corrupt realtors association losses their grip of their monopoly.

Now as far as the home market, it believe is still inflated - I agree with everybody here - so you're probably better off continuing to rent.

You would have paid $650K for that dated crap? I’m sorry to have to be so blunt, but you are out of your mind. I used to live in that area, and it is a dump. I wouldn’t pay $300K for it.
If your job does not require you to live in the Bay Area, leave. It’s basically an overpriced, undergoverned shithole

I think you've nailed it. Of course, the last thing the BayArea will admit to is a lack of quality of life. It's probably because everyone is leveraged to their eyeballs to merely eke out a middle-class existence in largely mediocre neighborhoods with sagging infrastructure. The house in the OP is very average for towns across the US—except that elsewhere these homes go for a fraction of the bidding-war-pumped SFBA price.

Despite all the local hype, once the credit crunch washes over the SFBA, this place will look no different than Flyover USA. Except perhaps to the uppity poseur crowd, who will maintain it's "special", lmao.

Clearly the biggest crime in this story is attributing such a motherhood and very old quote to Bill Gates. What's up with that???....

The house is still for sale. So the realtors were definitely lying about the other offers.

Business as usual.

When will it finally become illegal for realtors to block all access to the actual seller and to other buyers?

Why don't we finally get an open market for real estate sales, with all bids and asks publicly listed?

I think things won't really change unless and until everyone just stops buying in and says NO to the games and overpriced houses. The Bay Area seems to be a magnet for the stupid and the greedy, but at least on this forum there are some who see through the scams. I left a few months ago and have no regrets. The place is shallow and stale. The weather simply was not a good enough reason to stay.

Thanks for the research Patrick, again - I can't say this enough....great job on this site....

That being said...this realtor just smoked the seller - they had 650K....done deal....

Can realtors be sued for communicating false number of offers? There has to be solution to this outright fraud of lies with number of offers. Anytime i meet my realtor I feel like I am meeting scam artist and in his words these days - there is never better time ot buy but if I buy now after little time I will look back and I will be happy I bough t a shack in Fremont.

And If I mention effect of closure of Nummi he is silent - saying it won't have much effect,

You want to see transparent? Go to www.kazork.com. Even more transparent than Ebay. Can see all offers made, by whom and when. No guessing. No bait & switch. Awesome system.

liveconfused says

Can realtors be sued for communicating false number of offers?

The answer is yes or no. If I lie for no reason, can you sue me? Lying is freedom of speech too. So what would be ground for lawsuit? The agent misled you with lies and that caused you to make offer with higher price? Read the original post carefully. The seller asked the bidder to "stand out". Although from this "stand out" phrase the bidder gets the underlying implied message of "give me more money", but it is going to difficult to prove legally in court. Basically, in court it will boils down following:

1. The seller asked you to "stand out". This "stand out" could mean anything, financial or non-financial - proving yourself more qualified, you can increase your down payment, you can remove contingency from offer or writing a nice emotional letter saying "I would like to educate my kids in good school".
2. After hearing "stand out" you decided to make offer with higher price.

Bottomline, seller did not ask you to offer higher price explicitly. You volunteered. You have no case.

Realtor's ethics book says that agents are not supposed to lie about material facts (e.g. number of offers), but as long as they are not breaking any legal rule, nothing stops them from lying.

By the by, that property is still being actively marketed, with 2 Open Houses scheduled for this weekend; so you were definitely being "played." We encountered a LOT of that during last year when we had finally determined the market was right for us and started shopping. Those "highest and best offer" letters are just a shortcut to Ulcer-ville. In the case of THIS house, I think their agent talked the sellers into listing it lower to get more interest but the sellers still have big eyes and unrealistic expectations. Check the comps for the neighborhood because if your house doesn't appraise for what you bid, the bank won't give you the money. Wait for this house to fall out of escrow a couple times because the prospective buyers' funding fell through - THEN bid on this house again. My advice, fwiw.

Could you write an offer where you include a clause that the seller has to prove there was another offer by giving you a copy of the offer after the sale goes through? I know the seller won't tell you the price of the other offer while the house hasn't sold yet, but once it has sold to you, there is no reason to keep it secret. And in the clause, you get back the difference between your "better" offer and your original offer if there was no other offer. If there was a better offer or at least competing offer then you get nothing since everything was legit. I know there are still ways around this, but maybe it would prevent some deception.

"You want to see transparent? Go to www.kazork.com. Even more transparent than Ebay. Can see all offers made, by whom and when. No guessing. No bait & switch. Awesome system."

I think you need to step back a while and ask yourself plenty of questions.
Logging in and posting bids on a webpage isn't the answer. It may work for
a $60 garage artifact but does not apply to real estate property at $300-500K.
If something goes wrong, could you in court prove and point to the seller/agents as the other party
in the contract. If you never met the person, how would you prove it was them?
When conducting a deal with so much a stake, you really do need a hand shake.
As an earlier poster indicated, you should have all parties present when bidding.

Here is my sad story and what happened.
I was told to bid 1.5% above each bidder. Which came over 10% asking. I did just that and offer was accepted.
However, i lost my job and backed out of the deal getting back my deposit. The house did sell at asking.
Since then I have been renting.
Since that last experience, I been renting, and waiting for such practice to be exposed.

I believe it was on this blog that said someone wrote a letter and sent it to the sellers address to the seller expressing their regret at not winning the property, but that they were glad the sellers had got another good offer - however, should their deal fall through, then they could maybe see if he was still interested in buying. I believe the outcome was that the seller put a flea in the ear of the agent and a deal was done.

Who knows, you could maybe try that?

IF they wanted me to write a 'love letter', I would write them:

Dear Seller
I am giving you 100s of thousands of my money. YOU write me a nice letter by 5pm today or the offer is withdrawn

:-)

guys from other area:
yes, we still have people who think 650k for a mediocre home in San Jose is a 'deal'.
Also people think '900k' on Belmont single-family home is a deal too...

I guess people are still drinking the kool-aid.

Amazing, When do California Chumps leave considering this treatment. I left the hell hole 15 years ago and found paradise in CO. This dump would go for less then $200K in CO, the seller would be happy to get that. At what point does reality soak in that you move and you have everything to gain and nothing to loose. Cali is an overpriced, overhyped hole and I know I lived there the first 40 years of my life. Move chumps because it will never get better.

The best advice (given to me by a family member who is a home builder / mortgage broker): If you decide to make an offer on a house, place ONE (take it or leave) bid with your terms and any contingencies stated. DO NOT allow counter offers. Just decide what you feel it is worth (based your own research) and tell the seller that your price is a one time, non negotiable offer.

Most agents will not tell you that you can indeed make a ONE TIME offer on your terms. If seller does not accept, you move on. Agents do not want buyers to go this route because they (the broker & agent) benefit from counter offers and bidding wars.

Yellowstone, you are actually quite lucky that you got out of the game before the agent and seller conned you into purchasing this overpriced house. My advice is: refuse counter offers and just state what you will pay. You can negotiate minor details, but stick with your price, have the contract written up and let the seller's agent present it to the seller.

You may even get a positive response from the seller. It eliminates stress for both parties. You do not need an agent, just use the seller's agent to draw up the contract. You have to know what you are doing. It takes time to learn about the contract and understand the terms. Well worth the effort and no need for an agent. Since you don't have an agent who draws a commission, this can gain give you some leverage when dealing with the seller's broker. If they want to close the deal, they will usually give up a percentage of that 6% to make the offer more appealing to the seller.

Whatever you decide... hang in there and good luck :)

>>YOU write me a nice letter by 5pm today or the offer is withdrawn.

That's more like it. And I don't give a flying carp about the duck-wallpapered nursery(*), either.

(*) That's what they call the kids room here in California

Zestimate can be outrageously wrong!! Do your homework! I live in a ~80 house community, in Pasadena CA, that has only 3 models: A, B, or C. I live in model C. One of my neighbor in model C sold his about 5 months ago for $520K. Zestimate lists my house at $625K, today!!!. I've been to the open house that sold 5 months ago, its quality is just like mine in terms of flooring, kitchen etc.. So how could my model C house be $625K??? Zestimate is a good source for info, but you still have to do some data processing...

If they're bidding, we walk. Multiple bids are proof there is still more money (or at least more debt) than sense chasing houses.

Where I don't see anyone calling bills**t in this whole deal is the owner bought only in 2000. It's not like they lived there 30 years & built a generation's worth of emotional attachment.

Better still, THEY PAID $549K AT THE PEAK of the previous bubble. These owners then ponied up for granite counters, etc. They may be losing money even before backing out 6% commission from $635K. (Or their break-even point may be right in that area...)

Run away, run away!

I am again seeing many people taking 5 ARM's and buying up homes at 3.99% APR.I can't believe this is happening again.
God help America !

What is the RUSH, Do many of you think that Bay area Prices are going to higher in the next five or ten years? I sure don't... I am betting you will be able to buy that house in 2014 for 250K maybe even 200K we are in for some real slow times here folks, and with Ca.'s budget issues, and our USA economy in shambles and the U.E. Rate is going to at least 11.4% and likely 12.1% late 2010 and stay over 10% for years, and yada yada... you see where I am at... lets revisit this post in 5 years and see?

A major facilitator for the behavior of the Agents is the behavior of the buyers themselves. More specifically buyers like Yellowstone. This stupid fool has bid $ 650K for a home that he knows is less than $ 599K. Consider that with what I did in a similar situation. The home was a REO in Houston, where there was no bubble. It was a 2006 construction. The builder was still selling the same model in the area at a base price of $ 179K. The list price was $ 159K, which itself was a great bargain and Zestimate was an outrageous $ 389K (which I never really believed, but over a period of 1 yr it has adjusted to more realistic levels). For the record, I still value zestimate inspite of noticing such discrepancies. I did my rent/own math and bid $ 135K. I figured that if I landed the home at that price, I would be able to rent it out and the rent would pay my mortgage and ALL other taxes and insurance. My agent came back with usual story that there are multiple bids and advised me to upgrade the bid. I asked her to stuff it and walked away. Surprise of surprises, I get a call a few days later from her saying that the other bidder who supposedly bid higher than me had actually put in a bid simultaneously for another home also and he wanted to buy that home, and was pulling out his bid for this home, so leaving me the highest (and sole) bidder for this home! I had the right to say stuff it at that time or even lower my bid. But I had done my research and knew the home was a good investment opportunity and would never be underwater at my price. So, I went ahead and bought the home!