After reading the thread about realtor ethics, I thought I’d ask this question:
When you (non-brokers) have sold a piece of real estate, how was the price set?
Did you have a price in mind before speaking to a broker?
Did the broker “tell you what to list it for”?
Was the price quote from the broker higher or lower than the price you had in mind?
Did you have an appraisal before listing the property?
“Doubt is not a pleasant condition, but certainty is absurd.”
~ Voltaire
Replies
Here is my personal experience...
Realtor's have the best tools available for pricing a home. You always gotta wonder though if they might have other agendas... like price it low to sell fast. When your house sells in 3 days it makes you wonder. Or, appraise high so it will make you feel good and you will list with them. Price it too high and it can sit forever and not sell - and become a "stale listing" that no one is interested in. I think the best thing is to get at least 1 or 2 realtor's input and then price it a little higher, like maybe 5%, but be ready to drop the price say 1% every month until it sells.
Of course it all depends on the local market and your time schedule and your financial situation. In some markets I'd guess that a year or more to sell is standard... In others most houses might sell in a month or less. If you have a very small amount of equity in the house in might make sense to wait for months and months before making downward price adjustments. If you are just finishing the house you have been building and you will have 2 mortgage payments.... etc, etc, etc.
When I sold my parents house I had it appraised by an appraiser. The guy was probably about 10% high. I put it up for sale at the price he gave and the house sat for over a year. No biggy because the house was paid for and I didn't want my siblings to think I didn't try to sell it for top $. I could have saved myself some trouble if I had of used the strategy outlined in the first paragraph above. Maybe I just got a bad appraiser.
All the houses in my neighborhood are very different customs so it's hard to compare one to another. One of our neighbors have had their house for sale for 2.5 years. Another sold his house in less than a week for roughly $75k less than any other house has sold for the last year or 2. The price difference between neighbor 1 and neighbor 2 is ~$200k. I think they are both crazy, or at least 1 crazy and the other doesn't really want to sell.
Attached is an example appraisal done by a realtor with a lot of the pertinent data stripped out for privacy purposes.
Edited 12/1/2007 8:38 pm ET by Matt
When your house sells in 3 days it makes you wonder.
Yeah, everyone does. Generally, though, if the Realtor has done his/her homework on pricing, that quick sale means that it was priced properly. My rule of thumb is that my listings go 10-12 showings (8-10 in slow times) without an offer, then it's time to adjust the price.
The problem with pricing a home is that the only solid data you have are obsolete - sales of homes that have already closed. You never know exactly what's happening now. Thus the need to adjust pricing as necessary.
I think the best thing is to get at least 1 or 2 realtor's input and then price it a little higher, like maybe 5%, but be ready to drop the price say 1% every month until it sells.
I would advise against such a strategy in all but the hottest markets. I don't like to go more than about 3% above the target price I come up with. Time and again, the method I use to evaluate has proven quite accurate. (Right now, I'd stay less than 2% over target price - it's ugly out there.)
The big problem is that if you're too far above the market, you're going to sit and sit, and then become a stale listing, because many of people won't even bother to look at your place, figuring that you're going to be a pain in the arse to negotiate with, and why bother when there's 200 other houses just like yours out there?
Jason
You make some good points.
Really though, I'm not gonna feel like I got the full price if the house sells in 3 days.
Not to bash anyone, but right now we have 5 new spec homes sitting there - local RE market is bad and getting worse, part of which is just the time of the year - the unfortunate fact of the matter is that the REs could care less how much it cost us to build those houses and they could care less if we loose money on them. Their job is just to sell the houses at some price - hopefully fair market value, and their attitude is that we just have to find a way to build the same house for less money. Let's face it, if tomorrow we dropped the price of those houses to 20% below what it cost us to build them, the REs would be happy. And they wouldn't hesitate to present offers that threw in some extra moldings or more closing costs for us to provide for free. So, a RE's motivation to get the highest possible price is minimal.
Your strategies of basing price reductions on showings is good - I'm gonna use that one, at least partially... OTOH, it is too bad there is no way to find out how many overall showings for a given geography and price range occurred for a given time period. Again, though it also depends on how motivated the seller is.
I think we agree though that right pricing and appropriate, periodic price reductions are the way to sell.
As a builder though, we have to weigh the cost to build and cost to carry in making price reductions. It seems like the general concensus is that builders mark up their products 25% or 50%. That just doesn't happen - here anyway. BTW - I don't price our houses - my boss, the owner of the company does.
Matt,
How quick it sells isn't an indicator of being under priced. IF a good realitor knows the market and has some customers lined up.. if the price is where the buyer is ready. Time doesn't enter the equation..
I've sold for decades..
I can't sell anything when people aren't ready to buy.. price isn't the issue, drop the price below the value won't increase the chance of sale significantly. conversely raise the price above it's real market value and it will become the dreaded stale listing..
Very perceptive, frenchy.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
I don't usually leap to the defense of realtors, but I think that you're expecting way too much from yours. A realtor can only work with the conditions that exist right now - and what they expect "the market" to do over the next few months. If your bottom line price is $20k over today's market, is it the realtors fault if nobody wants to make an offer?
The fact that your boss has five spec houses sitting there unsold sounds like a bit of bad planning on his part. A year (or so) ago, he rolled the dice betting that "the market" would support his gamble.............. He lost.
I've known lots of builders who never had less than five specs sitting. They aren't losers....they simply have their capital in the form of houses. FKA Blue (eyeddevil)
I didn't say the builder was a loser. I said that he had lost a bet - there's a big difference. - lol
My problem with the OP was the apparent attitude that the realtor was somehow responsible for selling the house at a price that would give them a profit. While I'm not a big fan of many realtors, I recognize that they aren't magicians.
My brother and SIL in MO just sold their house after over two years on the market. Most of their problems selling the place resulted from:
Their belief that cutsey wallpaper and gingerbread trim would appeal to everyone else as much as it did to them.
Their belief that their floorplan was as perfect as it could get. They only had one child and it worked fine for them. It wouldn't be very good for a family with 2-3 kids.
His insistance that all of the "extras" that were done when it was built (25 yrs ago) made the place more valuable. He never believed me (or their first realtor) when we told him that very few potential buyers really gave a damn.
Once they hooked up with a realtor who gave them a serious talking to - and brought in a professional stager - they sold the place.
Sometimes it just goes that way. If you sell in three days and think you left money on the table you could also be entirely wrong.People are funny. We have had listings that brought in very good offers to buy in a very short time only to have the seller panic, refuse the offer, raise the price, sit on the house for a year and then sell for less than the original offer. It happens.We have a piece of land for sale right now. It sat for six months with no offer, many showings and ad calls, and then, three offers the same weekend. Upshot? The seller flipped and now has let all three offers expire because "there must be something fishy going on".
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
OK - now that I looked at your profile and I know you are a RE, I'll say that I might have answered your Q(s) differently. I (wrongly) assumed you were an individual getting ready to sell their home.
Let me answer your Qs more directly:
When you (non-brokers) have sold a piece of real estate, how was the price set? When we used a RE we took their input and made decisions from there. When we did FSBOs, we got comps from the tax records. It's not too hard as long as you live in a "cookie cutter" house. Many counties now have tax records on the internet.
Did you have a price in mind before speaking to a broker? Yes we had a price (range) in mind, doesn't everyone?
Did the broker "tell you what to list it for"? Yes. Isn't that kind of one of the first steps. In the instance I told about above where the parents house sat for over a year, I think part of the problem was that the RE wasn't assertive enough with me. She was a friend, which may have been part of the problem.
Was the price quote from the broker higher or lower than the price you had in mind? A few higher, a few lower.
Did you have an appraisal before listing the property? Although I've only had 2 appraisals, I don't feel these guys are as "market savy" as REs are, so, although I have done it in the past, I wouldn't again use an appraiser for my own purposes. I understand that banks have to use them to protect their interests though.
BTW - I don't think the guy from Canada's comments are necessarily germane to RE.
Matt, IMO, you have a good understanding of the real estate market.My own experience is limited to a very small town/rural land market.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
local RE market is bad and getting worse, part of which is just the time of the year - the unfortunate fact of the matter is that the REs could care less how much it cost us to build those houses and they could care less if we loose money on them.
Their job is just to sell the houses at some price - hopefully fair market value, and their attitude is that we just have to find a way to build the same house for less money. Let's face it, if tomorrow we dropped the price of those houses to 20% below what it cost us to build them, the REs would be happy.
I dunno. Seems to me that your statements above might be more accurate if you substituted "buyers" for "realtors." Realtors don't set market prices - buyers and sellers do.
Jason
Another small point: "the realtors don't care"You are entirely correct! They don't care because they didn't make the decision of what, where, how, to build, and they didn't make the decision of what price to ask.... and they are in a different business. Or maybe it would be clearer to say that they only care a small amount more about the success of your business than you care about the success of theirs.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
I'm just complaining because, as I said, the market is bad and seemly getting worse. It has no reflection on the realtors. I'm sure they are getting quite hungry too. If anything it's the partial blame of the mortgage industry who built a house of cards by giving loans to all kinds of people who really shouldn't have qualified.<!----><!----><!---->
You make some good points, but I think your experience must be limited to one local market.The "add a certain percentage" strategy depends on the local market value, as well. i.e. where I live and three bedroom, two bath home, might sell for between $60k and $110k. The percentage thing looks different when you get down to houses in very low value ranges.I disagree that comps don't show what is happening now. Other than small pockets of extremism, comps do generally depict the current market. If yours don't, perhaps you need new comps. Markets don't change that much overnight, even in San Francisco!
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
Sounds like you understand buying and selling real estate much better than the average Joe.One gentle reminder though: What you posted are comps from some sort of listing service and, unless such a person is also an appraiser, realtors do not and can not give appraisals.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
You hear the terms "buyers market" and "sellers market".
In a true Seller's Market there are more Buyers than homes for sale. Homes sell for full price and a house goes on the market and immediately there are multiple offers.
They sell in weeks rather than months. Home prices are steady or rising.
In a Buyer's Market there are more homes for sale than qualified and motivated Buyers. Sellers lower prices. Or they make concessions such as "I'll pay your closing costs". Or they offer to include all new appliances. Or they resort to owner financing just to get rid of it.
I showed a house last week where the Seller is offering a 42" TV to the buyer if they will close before Jan 1.
An associate in our office sold a home last summer where the seller had offered to pay an amount equal to the 6% commission to the selling brokerage as a bonus! Wow! Sounds great until you learn that the home sold for less than $60k. Still, it was nice.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
I just paid $1000 bonus to the selling agent. I don't know if it helped but my house is sold....in MI. FKA Blue (eyeddevil)
Blue,
agents spiffs (or the bonus you paid the agent to sell your house) is normal in a down market.. it used to be employed only with stale listings, however recent trends indicate that a premium is needed to focus realitors attention on your property over the multitude of other properties on the market..
Just for information preliminary reports indicate that in 2007 the percentage of sold homes to listed homes is going to settle around 4.9%. Down somewhat from last years dismal 5.8 % That's for the 7 county metro area..
For me (besides the macroeconomic issues affecting the timing of buyers as discussed by others), it's the type of house.
A partially done fixer-upper on non-maintained private roads,
A nicely done custom on 10A with front yard pond in an area of 1 to 2.5A lesser homes, and on a non-maintained private roads,
A tract McMansion in a higher end paved sub favored by the business execs being relocated in and out of town,
A totally redone custom country cottage amongest Spanish contempories.
Only the tract house moved quickly and at a non-quibble price because of a supply of accurate comparibles.
The first was because of foolish, unrealistic pricing on my part. Young and stupid.
The second was a problem with no other 10A spreads within 10 miles moving in the past 2 years. So that and other niceitys were discounted until they (realtors and appraisors {3}) found something to compare to. Finally, competing buyers determined the price (close to my original).
The last was a relocation company forced 3 month sale that left $100K on the table.
The lessons?
Your home better be a reflection of your lifestyle. If you're gonna be stable and in one spot thru your career, it's OK to be different. If you're gonna climb the corporate ladder and be subject to being relocated from time to time, you're better off being ordinary within a tract setting.
And what moves your boat may be considered an expense to someone else thinking, "I'll have to get rid of that."
And stay off of private roads.
Your home better be a reflection of your lifestyle. If you're gonna be stable and in one spot thru your career, it's OK to be different
Read that and thought somebody was talking about me<G>
DW says I have less than 15 years to clean the 40 years of accumulation away <GG>
Even with the backyard/junkyard and the market turning down, I still get an unsolicited offer to buy about 3 times a month.
I personally would never bother with a realtor, the county has all the details of all sales online here (WA), easy to do your own assessment.
I think it's always a roll of the dice...if you aren't in an apples to apples situation... even comps don't tell the full story... buy'n a house is full of emotion for most people... side by side same basic house & design can have totally different feels... and people (most) buy on emotion & feel... some of us go on value and what something "can be" but most people buy on... how much they can afford (after location)... it's all balance...
you aren't sell'n a ford pick-up that there are 100 just like it out there for sale... with a house you never know if the next person that sees it is going to be the one that falls in love with it... you'll never know if you left $$$ on the table...
most of the time... the house is sold in the buyers mind in the first 5 min... the issue if they are the first to make an offer... has as much to do with it as if the next color on the wheel at the casino is going to be red or black... there will always be people who want to deal... nature of things...
if you have the only one... you only need to find one buyer... have'n a 500k house in a 300k area... will always suck because people look in areas that reflect their price point... if ur 300k in a 500k area... even with 40% of the sq footage you'll just about always sell at a premium....
I'm face'n this issue with my condos now... I have people wanting to buy... but i don't want to custom do much if anything... I want to finish em out as planned and then sell.... I don't have the time or crew to do "custom" plus i already have everything for each units finish out down to the last robe hook...
but I don't mind selling below market (whatever that is) if i can sell direct to each buyer... i don't mind holding units until they sell... i don't mind renting some... i need to sell only a percentage to pay off all loans... but... i'd like to make the building a community so to speak... all comes back to balance... in my situation I'll create the comps... which can work for or against you... first sale sets the stage by which others will be judged...
just toss'n random thoughts out there... so ideas are welcome
p
I put my house on the market two months ago and I'm not having any luck.
When I put my house up for sale there were about 20 houses in this area and in this price range and I use the analogy my house is like a chocolate chip cookie going on a plate of cookies.
Two months ago my house was like a cookie fresh out of the oven. It was piping hot, looked delicious, and moist and chewy. It went on the plate beside those old stale cookies that weren't selling and I was hoping someone would be licking their chops and wanting that "house that just came on the market".
Well that didn't happen and I'm sitting here wondering what happened.
I guess it has to do with inventory. Statistically there are X number of houses sold per month and X number of houses coming on the market.
In my situation there are about 20 houses going on the market each month and about the same number are selling.
As a realtor I watch each new house as it comes on the market. I have a sense which ones will sell quickly and which ones won't. Three weeks ago I watch a house come on the market and I told the listing realtor she would sell it in one week and sure enough I was right. I'm not always right but you get kind of a feel for it.
My point is I think it would be hard to FSBO and price your own house as you are not watching houses bought and sold on a daily basis.
My experience is that most FSBO sellers leave money on the table.My FIL lost substantially by selling himself at "what he knew it was worth". His idea of value was seriously outdated.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
Mrfixitusa,
This was our experience
We considered listing our house for sale. We have roughly 180 houses in my 1950's development. Some are finished nicely, some are in serious need of repair and updating.
So realtor say's list your house for $280,000 based on comps.
So I say's wait a minute
I have 2 full bathrooms, brand new plumbing and electrical, Andersen windows throughout, a 50 year roof, detached heated garage, 2 driveways, bla, bla, bla…..
Basically we have a updated and finished version of a house in our development.
Mrs. Realtor commenced to explaining how we need to " control our expectations" and the we have "over improved"
I say Bull Snot!
We have updated nicely, but hardly "over improved" I say list our house a bit higher and sell the thing as turn key condition. I think I made her mad.
And don't you know when we went looking at other houses we found broken concrete, crappy windows, mechanical systems in serious need of updating.
Mrs. Realtor explained that these issues are an acceptable part of buying another home, and instructed us not to make offers based on how much work a particular property needed.
So the lesson we walked away with was this
1) Accept less when selling your home cause the realtor says so.
2) we should expect to pay asking price, or very close to it for any property we were interested in regardless of condition. Cause the realtor say's so!
I still say BULL SNOT!
We decided to stay putt for a while
I'm sorry to hear of your bad experience with a broker.You might just take the time and file a complaint with the Real Estate Commission in your State. You'd be doing others a favor.As for offering based on the condition of the home, that taken into account in every assessment and every appraisal and every broker market opinion, or at least, it is supposed to be.I'd suggest that you call her managing broker and complain about her behavior. His/her response will tell you about his/her entire company. If s/he jumps in and takes care of the problem promptly and tries to sell you on listing with a different person in the office, or help you him/herself, it may just be the one salesperson who should be caned (really, I meant to type canned). If you get some mumbo jumbo write 'em off.Every area has lazy ineffective business people in every category. But, just like with contractors, there are also some honest and consciensious real estate people out there.I'd also suggest that you look around your area for For Sale signs. Write down the names of the three companies with the most listings and pay attention to the individual agents names on the signs closest to you. If you know anyone who has sold lately that you think is pretty savvy about such business matters, ask them if they can recommend someone. Give 'em a call and try again.Unfortunately, finding the best broker is a bit like finding the best used car. It may not be the first one you look at. Remember, your offer is YOURS, and yours alone. Any broker who tells you that you can't do this or offer that or request repairs, etc. is way out of bounds.I've trained my associates to explain it like this: The listing is the seller's "wish list" and the offer is the buyer's "wish list". That's an oversimplification, but I believe it captures the spirit of real estate negotiation.One last thing: Some of what the lousy broker said that you didn't like may be correct.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
hasbeen,
some good thoughts you have !
I am by no means with out some fault on this one.
I think our house is finished very well compared to the other homes in our development. So I guess that makes me a bit defensive.
With hind sight being 20/20, the whole deal went sour when Mrs. Realtor insisted that we
"Over Improved".
And I'll stand my ground on this one. We updated windows and doors and replaced a lot of 1950's vintage mechanicals.
Andersen double hungs and Reehm oil heater is hardly "over Improved"
As far as Mrs. Realtor goes, we have a little history with her and it was a positive experience.
Don't really know "what changed"
After the deal went dead my DW tried talking to her and explaining our position. We thought maybe I came off to strong and the situation needed a woman's touch, ( my wife is way nicer than I am ).
Mrs Realtor insured DW that I had not offended her in any way and went into the whole over improved / unrealistic expectation thing again.
I mulled it over for a while and tried to contact Mrs Realtor's boss. Not looking for a fight, but really wanted to understand her angle.
I left 3 very polite, low key voice mails for the gentleman with no response.
I'm done, way to busy to chase this kind of stuff to far.
We may start looking again this spring if the market stay's soft, I'll give you an idea who we won't call.......
Bill
Thanks, Bill. Best of luck with the process.Joe
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
I can't believe what I am going to do, but I am gonna defend the RE in this case.
Rarely do you ever get back all of the money you spend on your house. Sometimes an improvement will yield only pennies on the dollar (think outside pool in crappy neighborhood in Alaska). Sometimes you will make a few bucks above your costs (maybe a 2nd bath in a 3 br. house).
Lots of 'improvements' are really just maintainece. Windows for example, if the old ones were garbage that had to be replaced then maybe a cheap vinyl one would have been more approiate. The expensive (and very nice) Andersens may have been a cost you will never recover. (Please note: I know nothing about your house, neighborhood, level of craftmanship, the economy of your area or your motivation to sell)
A lot of the things you mentioned do sound like your home should be worth more than a similar one that is origional. The question is how much.
I think your agent has a knack for pissing people off. So much for diplomancy. Find a better agent at a diffrent company.
As far as her saying bum conditions in a home you want to buy just come with the territory and can't be negoiated into your price she is an idiot.
Good luck
bobtim,
you pretty much nailed it. I would never dream of trying to recover dollar for dollar what we have spent.
More to the point a well maintained / updated home should list for more than it's un-maintained neighbor..
We felt we should list higher based on the rough condition of Mrs. Realtors comps.
To her credit Mrs. realtor can only use as comps what actually sold so she has limited means in that respect.
We even drove around and looked. The comps she used all had some combination of old roofs, bad concrete, lousy windows........
I think I pissed her off because we actually drove around and looked!
Either way it was a lesson learned.
Bill
Some times the way a realtor would handle it would be to go ahead and list it for you at your price, but with the understanding you would be willing to lower the price in 30 days if nothing happens. And even be willing to lower your price again in another 30 days or so if nothing happens.Some real estate companies would require the above to be in writing with your signature and agreement.I'm just curious, would you have been willing to agree to an agreement like that?
Mrfixitusa,
yes I would have been open to that option as long as I felt the Realtor made an honest effort to sell it.
Gotta be reasonable, we want a good price but don't want to wait forever either. If it doesn't move at our price then the market has shown us the door.
This has been a good conversation, I'm going to keep this thread and re read it if we decide to shop again this spring.
Something I've wondered about is how do you choose your realtor to list your house?Do You invite 3-4 realtors to come over and make a presentation? Doesn't each one come over, look at the house, sit at the dining room table, and then say the same thing?:A. Your house is worth $100,000B. List it with me and it will cost you 6% sales commissionC. I will put it in the MLS system D. I will advertise in the newspaper and I will have open housesHow do you choose your realtor?Is it the woman with the best cleavage?Is it the young 24 year old female realtor with no experience but yet she looks good?Do you hire that "old timer" who's been in business for 30 + years?Do you hire the guy who advertises on the radio all the time?How do you choose which one you hire?
I've hired realtors a variety of ways. On the last condo, we interviewed two. The first guy came and gave us proof that he could perform showing us charts and graphs about listing prices, asking prices, selling prices. He had a team system and explained all that. He was very thorough and very professional and we would have used him but we didn't make a good connection on a personal level.The next lady did the usual routine in a very low key method. We liked her because she was a nice fit for my wife. Since I believe that woman buy the homes, I chose this particular lady becuase she promised to service the listing on a personal level as compared to the team effort at the other agency. When I was putting the lake property up in a much smaller town, I decided to interview every agency. I just wandered in and started talking to the agents in the office without telling them my intentions. After visiting about six of them, I invited one to come over and assess my property. It really didn't matter much. The entire town lacks professionals and I've never been exposed to so much nonsense. We finally got it sold but it took two months of wrangling after our first offer and we couldn't come to terms until the buyer was put on a phone with me direct and we hammered out the deal without the interference from the listing and buyer's agents. There is no science about determining selling price. There is a danger of offering it at too high of a price as it comes out as a new elisting. If you price it right, it will sell within the first week. If you list it too high, the real buyers will dismiss it because they've already looked at propertys and know it's high. When you lower it, they have already dismissed it and they might not buy it at the same lowered price that they might have bought at if you started at that price because they reason that no one wanted it and it's a dog and now you have to lower it a lot more to get them to look again.The idea of listing high, then lowering in 30 days is flawed strategy unless you are in a sellers hot market. Bob's next test date: 12/10/07
I like the idea of her listing your house at your price, with the understanding that you will lower the price if it doesn't sell in a specified time.
I've only ever bought 2 homes and sold one, so my experience is nil. However, if my home is very nicely maintained in a neighborhood where, say, 30% of the homes are not, then my level of maintenance doesn't matter because the buyer's impression doesn't start at the curb, it starts down the street on approach. If a poorly maintained home is one of my neighbors, then it's even worse. That is the case in my neighborhood and I have no expectation of making back the money that we've put into this home (addition, bathrooms, total plumbing replacement, new roof, new furnace). I don't consider those investments into my home, I consider them investments in my comfort.
Bill,
Most people cannot see beyond the price.. they have a budget and decide to stick in a certain neighborhood for various reasons..
The best house is not going to sell well because it's at the top of the price heap and most peaple will only look at price..
There are exceptions of course but few people will slug their way through house after house looking for the quaility they seek. rather they will start at a lowest price and at some point if the price becomes too high they will move to a better more afluent area..
On top of that items which a home owners places a high value on the prospective buyer might find not to their liking.. you replaced the windows? he doesn't like that brand or had a bad experiance with them, you replaced the roof? it'sthe wrong color or they would have done it like this etc.
new paint, new carpet ,new whatever, it is the wrong color, wrong style, or brand, or their uncle had trouble with that once etc..
The best house in the neighborhood is also the slowest to sell for all of thoose reasons..
Such an interesting place this tavern is, so much like any other.
I posted specific questions and inadvertently started a thread in which virtually no one answered a single question that I asked!
Gotta say, I love it.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
Have you ever listed a house at a fair price and a price you were comfortable with(supported by comparables) and then nothing happens and it doesn't sell?
If so, what do you tell the homeowner - seller?
Market feedback is the ruler. We aren't the buyers and the buyers call the shots.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
hasbeen,
The last house I sold was in 1999, so in some ways, my story is out of date, but we're planning to put our house on the market in the spring, so I'm very interested in this thread.
"When you (non-brokers) have sold a piece of real estate, how was the price set?"
I got proposals from three Realtors. One did a full comps, one made a guess the other did a simplified comps. All three knew I was getting competitive proposals and I got the distinct impression they were aiming high on the suggested sales price. i ultimately went with the one recommended by a competent friend with a price in the middle and the list price was the price she suggested.
"Did you have a price in mind before speaking to a broker?"
Yup. I updated the appraisal report from the bank when I bought the property, based on the neighborhood comps. This was a neighborhood of all unique customs builts. So the detailed appraisal offered a road map for valuation. I factored in the county assessment as well. My valuation was $30 k below the Realtor's.
"Did the broker 'tell you what to list it for'"?
Yes. She indicated it would be a stretch (10% higher than my "guess"). I went with her recommendation.
"Was the price quote from the broker higher or lower than the price you had in mind?"
As I wrote above, her price was higher.
"Did you have an appraisal before listing the property?"
No
Just a few thoughts to round out the story. I put that house on the market in mid February, per the Realtor's suggestion. There was little activity. First offer came end of April--at exactly my valuation. Realtor said take it. Instead, I called all the people who had looked at the house and left contact info (In Missouri, the Realtor's are prohibited from doing this--no "shopping offers"). Two more offers came in and the house sold for a price midway between my guess and the Realtors, ON THE DAY THE LISTING EXPIRED (Mothers Day). My lessons, shared by many. Houses sell faster in the spring (all my houses so far sold on Mother's Day weekend--spooky). Houses mysteriously sell fastest the week the listing expires. Setting the price correctly moves the house; forget staging, etc.
Frank
I was hoping more people would chime in and share their experiences on how they had priced their house.
I thought of a couple of things related to your topic.
About 12 years ago I was working as a teacher and I bought a fixer upper, lived in it for a couple of years and then sold it.
I was not a realtor then and when I listed the house I had no more idea of home prices than the man in the moon.
I met with a realtor and signed the paperwork to list the house with her. When we talked about price, she gave me a range of $5,000.
I was living in a small town and she felt the house was worth $47,000 to $52,000.
I told her to list the house for $52 and she did.
We sold the house a few months later for $48.
I, too, was hoping for more input on this. It seems to evoke strong feelings to just about everyone when they have to deal with the issue.Sounds like you small town broker knew what she was talking about. In some ways (as long as you don't count small commission checks!) it is easier to be a broker in a small town. There's only so much market for you to get to know!
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
A market evaluation is done from the multiple listings service which is record of all sales "sold" in up to the last three years. Hit the search for 6 months or 12 if you feel the market has changed. The price is nearly gained there .
Next reseach is done on the type, size , price of the house . For a while 99,900 were our top sellers. If you went over that you fell sharply. At that time homes under 100,000 commanded 60 percent of the market . The highest percentage of quick sales were between 90 and 100 which is a third point .
From that information you gather how many days on the market is average for the house you are offering for sale . If you want to increase or decrease the time , then price is adjusted.
Normally an agent does this for free as a service . Of course the agent is hoping you will list . Its hard to do by yourself since you will not have access to the MLS.
Tim
Hi Tim,In most places you can access the sold information straight from the County Assessor's Office (some places still count it as private info, though), sometimes online. Of course that leaves you to decipher it without the aid of the MLS software. It doesn't matter in our rural area since we can keep track of most all sales without much trouble.Sounds like you clearly understand the appropriate approach, IMO.Our office always provides the info for free, even when we know we are not getting a listing (that happens sometimes when a seller is selling to a neighbor or friend or it will change hands in a family after a death and just want to verify price). It's just good business practice to help people, IMO.I'm very curious to here people's stories, good and bad, of dealing with brokers.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
1st house, strong sellers market. All parties agreed to the appraised price. Kind of scared going onto the deal, but all worked out well.
2nd house, normal market, had a ''FSBO help you to sell program'' work up the price. The same thing as any realtor would do. They Had MLS access. I was satisfied.
3rd house, normal to buyers market. Watched the neighborhood closely. Thought I had it all figured out. Came up with my own number. When I sold the appraisal came in 8k higher than sales price. (and virtually all appraisals matched the selling price usually)
4 house, real goofy sellers market. I had a number in mind, but not a lot of faith in it. Paid for an appraisal. It was 100k higher than I thought possible. Sold the place for 10k less than that appraisal. I'm happy.
I don't want to use a realtor to help me come up with a sales price when I have no intention of hiring them to sell for me. thats just exploiting someone. (although realltors have called me when the sold sign went up wanting to know the price. One really insistant RE demanded to know the sales price. I asked her how often she had sex, she replied that was none of my buisness, I said my price was none of her buisness. ha ha).
It does help to have somewhat of a price in mind, but you really do need some sort of comps to guide you.
This is one of the biggest problems FSBO sellers face. I think I will bite the bullet and get all of my homes appraised in the future.
An appraiser friend told me that he hates to get requests for an appraisal when it it for a FSBO seller. As you noted, most appraisals mysteriously come in at whatever the contract price is. You'd think it wouldn't matter, but my friend says it's much harder when there is no price to shoot for.Kinda damages my opinion of appraisals. Sounds like you have made enough by getting appraisals to pay for any future appraisal needs!
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
hasbeen
what do you reccommend I do in my particular situation? It's the best gameplan I can come up with.
Like you say appraisals are funny things. Those folks have horrible pressures put on them from all directions. When ever I have a home appraised (irregardless of who ordered or is paying), I roll out the red carpet for them. I usually get a chance to do my sales pitch as to why my house is so perfect and worth tons and tons of money. I think it might help a little.
I agree with you, appraisers hate to do a flat out 'what's it worth' appraisal. they would much rather confirm or deny somebodies elses idea of value.
I think I'd get an appraisal, but I'd read it carefully, I'd look at the comps used myself (at least a long slow drive by and gawk), and I'd ask questions of the appraiser if there's anything I didn't understand.My appraiser buddy once did an appraisal on one of the finest homes in our town. He asked me to take a look with him and give him my off-the-cuff price opinion, just for grins. He finished the appraisal, I told him the place was worth $225,000. He'd come up with $222,500 and was all grumpy because I'd done it off the cuff and he'd spent a day working on it. It was a lucky guess, but active brokers should have a pretty close idea of what anything in their market "should" sell for. That doesn't mean it will!
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
Some thoughts on our experience (bought 3 houses, sold 2). Some of this relating to the original pricing question, some to the later post on choosing Realtors.
I keep track of everything we put into improving a house. Granted, some of this is comfort, but on the other hand we do all work ourselves. When we meet with the Realtor to set price we know what we paid for house, what we put into it, and what selling costs will be. We also know prices of similar homes from Realtor.com, local listings, etc. Realtor gives us price range. Hopefully, this range covers everything we've invested plus a little. We choose the portion of the range based on comps provided by Realtor, how they compare to our home in similarity and location, and how soon we need to sell.
Our last Realtor told us "Your house is worth what somebody is willing to pay for it." It sounded overly simple, almost insulting, at the time, but it is amazing how accurate the statement is when thinking through offers. Sometimes you just have to face the truth. We knew when we bought the last house that the house would not appreciate, the land would slightly. With our budget, it was this house which was large enough for us, a house much too small, or rent. We didn't make any money, but we didn't lose money on rent either and are happier owners than renters.
We don't buy into the "contractor white" theory. We paint our rooms the way we want them. Maybe they'll paint over it, maybe they'll like it. Either way we enjoy the variety and the house will stick out in their mind. After looking at several houses they all run together and being unique is a plus.
Choosing a Realtor:
First house - I had done environmental consulting work for a Coldwell Banker Realtor who did both commercial and residential. Went to him. He talked to us for about 10 minutes. He chose three different houses and took us to them, required us to give him one good and one bad on each house (seemed tacky, but he wouldn't back down). Called us a week later and said he'd found our house, meet him in a couple hours before someone else grabs it. He was right - perfect house, great price. Not like any of the three he took us to - he was just very attentive and good at figuring out what people wanted. Didn't waste his time or our time. We were very happy, and he was one of the most succesful Realtors around because he was so efficient. Used him to sell, as well. We listed at his price, sold within a week or two. Price was a bit lower than we may have been able to get, but we had to sell fast to move out of state and still made decent profit.
Second house - went to Century 21 dealer in city. Said I wanted to look at towns north of town. Realtor was clueless and didn't even know town names in area. He lasted less than 10 minutes. Ended up with couple in one of their offices farther north. They did OK.
Selling second house, called Coldwell Banker. I had friends who were Realtors, but didn't know area we lived well enough. Coldwell seemed to be the company that got all the listings that didn't sell with other realtors and actually sold houses around us. They also advertised - photos on realtor.com, newspaper listings, yard signs weren't rusty and falling over, etc. They sent professional photographer to her home with appropriate camera lenses, listed online, etc. Realtor more than earned her keep on a tough home to sell, and we got what we needed to out of it. Started at middle to higher end of range she gave us, ended up on lower end. Based price adjustments on number of showings and costs of holding on to house.
Current house, toured area to find out where we wanted to live, went to nearest Coldwell office. Had good experience with them in past, didn't have good experience with Century 21, they once again seemed to have most listing/knowledge/effort in area. Pleased with the experience. Took a little more leg work than with the first house (finding listings on our own, driving by possible houses to determine which were worth scheduling with Realtor, etc.). Ended up with foreclosure home in a part of town we never thought we could afford - very pleased with the house and location. House was listed by another lazy Realtor who had taken awful picture for listing - we almost didn't look at the home it looked so bad in pic. In real life, it was actually nice.
We always scope houses out on-line first, then drive by, then visit. If a Realtor doesn't take the two minute effort to get a decent photograph posted online, or to replace the picture with snow on the lawn when it is August, they and their agency aren't worth talking to.
In short - we price on what we need to get out of house, range provided by realtor and their facial reactions when we suggest ideas, and how fast we need to sell. We choose Realtor by who is trying hardest to sell homes in the location and price range we want to buy. This takes precedence over recommendations of friends, family, etc.
One of the things I suggest to anyone shopping for a listing agent is to let them know up front that you aren't going to select your listing agent because of the price they claim they can get for you house. It's imperative that you don't get yourself into a bidding war and sell your listing to the highest bidder. Make them back up the claims with solid data. Solid data means more that listing price. Days on market say a lot. Bob's next test date: 12/10/07
That is an excellent point which people often overlook.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
I've lived in large, medium, small towns.Wouldn't it be uncomfortable to interview four Realtors, hire one, and then have to run into the other three Realtors at Walmart, Church, the Post Office, Grocery Store, etc. on a regular basis.In a small town you're going to see those other people every other day or so.Seems like it would be uncomfortable running into those people you've rejected.
For some, maybe. It's old hat in a small town, though.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
A neighbor sold her house a couple of years ago. She's older and her husband died and she needed to find something smaller and more affordable as she was on fixed income.
She talked to her attorney through the probate etc and her attorney advised her to put the house on the market FSBO and price it at $135,000.
When she told me that my mouth dropped open, but I didn't say anything.
Her home is worth $115,000. I know home prices in my own neighborhood.
I wondered "how did the attorney know what her house is worth?"
I wondered "did he do some kind of market analysis for her?"
I doubt it.
I wondered how did he come up with a price like that?
So she put her FSBO sign in the yard and not surprisingly nothing happened
After 6 months? she listed it with a Realtor for $125 and it went under contract quickly.
A month later it closed escrow and I watched the new owners move in.
I went home and turned on my computer as I was curious to go into MLS and find out the sold price.
I looked it up and my mouth dropped open. The home sold for $100,000
Wouldn't that be a shock to put your house on the market for $135 and have high hopes and then end up selling it for $100
Plus pay 6% sales commission
Pricing homes isn't the "piece of cake" people think it is. Otherwise things like this wouldn't happen and I think they happen all the time.
I have watched several owners ride a property right into foreclosure rather than take less than they "knew" it was worth.Despite the experience of some with seemingly ever increasing markets, that is by far the exception and certainly not the rule.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
Something else happened this week.A neighbor's house went on the market 6 weeks ago. I think it went under contract the first week. So far so good.According to the MLS closing was scheduled for Mon Dec 3rd.I drove by the house on Sunday Dec 2 and saw the owners/sellers moving out.Apparently the house didn't close on Monday. Apparently the deal fell through on Monday (After he moved out of his house the day before !)It came back on the market on Wednesday.What do you think happened?If the deal was going to fall through that normally happens the first week or two under contract.How does the deal fall through on the day of closing?I've had one sale in which everyone went to closing and the lender dropped the ball (it was an out of state lender)They didn't have things ready so we all went home and came back a few days later.What would cause the deal to fall through at closing? Maybe the final walk through wasn't satisfactory? I don't get it.
Last house we sold the buyers showed up at closing not realizing they had to bring money. Some crooked lender off lending tree that refused to disclose things to them. They were too novice to insist. Not sure where their Realtor was.
House was in North Carolina, they were moving from Hawaii. All their money was in a local (Hawaii) bank. Because they were in North Carolina, they couldn't get certified check because they weren't there in person. After some begging, bank president allowed a friend or relative of theirs to vouch for them so they could close.
All of this was after thousands of dollars of foundation work we had paid for them to get a FHA loan. We had conventional loan on double-wide converted to real property. We have good credit and wanted the acreage with it, purchased with conventional mortgage. A few years after we bought the industry changed, and conventional mortages were no longer available. We paid some guy a few thousand dollars to cover the block piers with concrete and add more tie downs to prove it wasn't moving, despite the huge rounded brick entry steps and skirt it already had. Then paid an engineer to certify it.
I was already living in Ohio. Gave power of attorney to Realtor so I wasn't at closing. She earned her commission several times over on that sale.
Still surprised the closing went through that day when they found out they had to pay several thousand more than expected, but sure am glad it did.
Results of the Home Inspection not being to the buyers satisfaction?
I almost walked from the table because of that once.
In retrospect, I should have. But that's another story for another thread.
Edited 12/8/2007 12:32 am ET by peteshlagor
I'd bet that the buyer couldn't get the deal funded. The mortgage industry is tightened up so much that even when it looks like it's going to get funded, the underwriters will say no at the last minute. The realtors have told us that they are seeing that happen on a regular basis. I just closed one and I still didn't believe it was going to close as I sat down in the title company. Even after it closed, I didn't believe it was going to go through because the bank hadn't wired the money. I have never showed as much documentation for a loan as I did on this last one. Thank goodness for email, pdfs and scanners. If this would have been done in the mail like the old days, it would have taken at least a month to get all the docs done. Bob's next test date: 12/10/07
I'm not sure if you said how long you've been in real estate, but if it's a few years you have been incredibly lucky (or maybe I've just been incredibly unlucky? Ouch.)Thinking back: Had a buyer die two days before closing (closed two weeks later with the widow.) Had a couple meeting at the closing, she signed, but he was in a car accident and went to the hospital (never closed). Had a buyer come to closing, lay the funds on the table, sign the papers, and then grab the check and say he wasn't going through with it (he lost his $10k e.d.)Had a buyer come to closing and refuse to sign the loan docs. She never would give a reason.Had a buyer roll his truck and everything he owned in a snow storm on the way to closing (never closed).Had a seller refuse at last minute to pay for the installation of a needed new sewer line. Buyer said fine and refused to close.Had three guys under contract to buy a commercial site for a gas station, on the morning of closing the "money man" refused to write the check.Had a few deals die due to secondary mortgage funding snafus where the loan underwriter refused to fund the loan at the last minute for various reasons from a neighbor's encroaching carport to lack of a survey (which had been disclosed in writing from the start).Had a buyer go out and buy, on credit cards, a new house full of furniture a week before closing. Lender checked credit day before closing and refused to loan.This is getting a little depressing. : ) Glad there's been way more deals that went well!My experience is limited to a rural location. We've sold bare land, houses, cabins, commercial and ag properties. This is also a relatively poor area by US standards and govt programs are involved in maybe ten percent of our current home sales. All that may explain a lower closing rate.As for the deal you recently noticed, hard to say what happened, but I know there are a lot of possibilities. (Groan)I shudder to see people go to the secondary loan market to buy what they most certainly should not buy. We have quite a few foreclosures around here and, of course, they are on the upswing. It's a bad deal with all sorts of people wanting to blame someone for "predatory lending", etc. The problem is that I've seen some people go for a loan that I would have tried to talk them out of, then go to work and pay the bill, becoming stable financially and being glad they were able to get the loan. I've also seen LOTS of people borrow their way into terrible circumstances. What can you do? Law requires us to show to anyone and to write and present an offer for anyone. We try to explain to people the difference between "good" and "bad" loans, but often they come in all pumped up by the mortgage broker they've been talking to and they won't even call a reputable local lender.Sorry to launch into that rant. Colorado recently began to regulate mortgage brokers and I hope that will help.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
I am working with a Buyer who has a house under contract. He has seven days, per the contract, to do his inspections.
So he has this week and two days next week for inspections. Do date, he's had these inspections:
1. Mold Cleaning Company
2. Home Inspection
3. Heating A/C Inspection by licensed contractor
4. Foundation Contractor
5. Certified Mold Inspector
6. Inspection by Licensed Electrician
7. Plumbing Inspection by Licensed Plumbing Contractor
Next week he will have two more inspections:
8. Level II Fireplace Chimney Inspection
9. Structural Engineer to look at foundation
10. Termite
About all he has left is a Roofing Contractor but he has no plans for that yet.
Have you ever had a Buyer do this many inspections?
Edited to add Termite inspection - Glad I caught that
Edited 12/14/2007 8:47 pm by mrfixitusa
No geologist report?
Or termite guy?
Gotta have those on the shakey side.
Edited 12/14/2007 8:42 pm ET by peteshlagor
he left out tremite and perk test..
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!Forget the primal scream, just ROAR!!!
Never have seen a perc test on an existing house.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
It's probably the same as a septic field test. Bob's next test date: 12/10/07
same....
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!Forget the primal scream, just ROAR!!!
What's a septic field test. Anywhere I've been a perc test had nothing to do with an existing septic drain field.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
just another test to see if the exsisting drainfield will continue to function...
we refer to as a perc test...
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!Forget the primal scream, just ROAR!!!
A septic field test to me would mean run all the water, full tilt for about an hour and see if the field gets wet or if the drains back up. Bob's next test date: 12/10/07
Any perc test I've done was a hole in the ground for inspection of soils and/or to be filled with water to see how long it took to dissipate. What's a septic field test?
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
What's a septic field test?
Joe, when we bought our house in TX we had to have the septic inspected. They had to pump it and I think do a visual, maybe do something to see if the field is working properly? Not to sure on the second part.
When we sold the place the same thing, pump the tank and do a visual..... I really don't know what they are looking for, floating turds?
Fast forward and we are buying a house in Iowa. Some duffus mentioned that the septic was in bad shape-read inadequate for the size of house but fully functional, I have knowledge that the little burg that we are moving to is going to be forced to install a sewage treatment facility in the not to distant future - something like the next 5 - 7 years, but still having to pump the tank every year for the next 5-7 beats the cost of a new system that will be capped off in the event of the sewage treatment.
Not pertinent but it was the realtor that I hired that tipped the bank on the septic!
Because the bank got wind of this(the info on the inadequate septic) they were insisting on a new one. Luckily for me the HO's (estate) wanted to sell badly so I was able to offer quite a bit less then list and got them to throw the septic in at their cost. This is something(septic inspection) new to me here in Iowa but I think it is something that is going to be mandated soon.
Down side to this is that I could have gotten the place for about $10,000 less - the cost of the septic.
A perk test is exactly what you said, dig a hole and pour a 5 gallon bucket of water in and record the "soak in" time, which is a prerequisite to the installation of the septic.
Doug
Never.Bet he's not buying a 90 year old house, is he?
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
No, it's not a 90 year old house - it's a 40 year old house. Built in 1963.It's been interesting watching the inspections. The Home Inspector brought in a computer and then when he was finished he printed a report on the spot, got paid, and left.Some of the guys provided a hand written reports - estimates (a carbon copy type of form).A couple of the guys said they would mail us their report - bid.One guy, a young electrician, had a very different system.He asked if I preferred fax or email and I said email. So he looked at the house, went to the van & got on his laptop computer, and sent me and email through his phone.I asked him about his system and he said he has "data service" and the internet which is UNLIMITED for $60 per month with his cell phone.It was pretty slick. I liked it a lot better than the handwritten bids that are hard to read handwriting (like mine).
Edited 12/15/2007 5:41 am by mrfixitusa
mrfixitusa,
that's a lot of scrutiny for a 40 year old house.
Is their any significant conditions that would trigger that many inspections?
I doubt any home could get by with out some findings.
Bill
The reason the Buyer is doing this is because the house has some problems and the Buyer will use the reports & repair estimates to document & support his offering price (as opposed to guessing).The house is a bank repo and theoretically the bank is more likely to accept his offer if he has documentation for the offer he's making.If the bank doesn't accept his offer, then he's out the money he's paid for these inspections. But he understands this and is willing to give it a shot.It's kind of like the old saying "you pays your money and you takes your chances"
wow, that explains it.
I guess with enough " Expert documentation" the bank could justify darn near any offer if they wanted the property off the books?
Mister Fix, is this the same house you have in about 3 threads?
The one that has been sold twice & un sold twice?
Or do you have 2 of these deals going?
Joe H
It's the same house.
The other part of the strategy is to "put the seller on notice" with written documentation.It puts the seller in a position that he has specific knowledge of the problems with the house.The bank can no longer say "we don't know anything about the condition of the house - it's buyer beware"They DO know about the problems with the house and they become motivated to sell the price to avoid having this come back on them in the future.
I think the guy is wasting his time and money with all those inspections. One inspection would yield enough negative information to make an offer to a bank. They don't really care about all those details....the main detail is the bottom line. It sounds like your buyer just took a real estate investors course.
Bob's next test date: 12/10/07
I'm working with someone else who is buying a house on Friday of next week. She doesn't believe in any inspections of any kind. She says they are a waste of money. I helped her buy a house in November, another one in December, and she has her eye on one more in January.On the house she bought in November she said "I'm not paying for a termite inspection". So I said the title company won't do the closing without a termite inspection report, unless your lender waives it.I offered to call her lender and I did and he said "why the hell won't she pay the $35 for the termite inspection". He said "we require a termite inspection and we're not going to waive it".She has 12 rentals and her feeling is "something will go wrong with every house I buy" and so she's expecting the worst. She feels the inspections are a waste of time and money.
Tell her to lower her offer by $35 and just git er done!I've bought a couple of house with her same attitude. I can actually do the work though so it's a different situation. Bob's next test date: 12/10/07
What's your thoughts on a foreclosure property and the bank's responsibility to disclose problems with the home.
Initially the house goes on the market and the Bank takes the position "we don't know anything about the condition of the home".
But the bank DOES becomes aware of the condition of the home when a Buyer makes an offer, it gets accepted, inspections are done, and the Bank receives copies of the inspection reports.
Does the Bank have a legal obligation to disclose the problems they're now aware of?
mrfixitusa,
While they may have a legal obligation you would have a devil of a time proving it..
Banks understand they are on the hook and may simply settle rather than go through the protracted legal process involved. It depends on a lot of factors..
right now I think if you discovered problems in a house you were willing to make an offer on a bank would take the loss and move on.. In a sellers market that would not be the case..
I thought they sold all foreclosures "as is". The buyers take a big discount for their risk. The offer to buy can include anything but I don't see how any buyer could convince a mitigation officer to accept a short sale, then warrant it too. Bob's next test date: 12/10/07
There are two separate issues here. (Of course, I'm telling you how it would be in Colorado)What does the owner know and under what conditions are they selling?Here there is no requirement for a seller to provide a property disclosure. Such disclosure is pushed hard by the real estate commission, but the commission does not govern owners, just brokers. If the contract specifies, and virtually all repo sales contracts do specify, that the seller is selling "as is" then the seller has no requirement to disclose anything.ANDWhat does the broker know?I you are the listing broker and a buyer has an inspection done, then folds the deal due to the inspection and then someone else comes along to look, you as the broker are required to disclose whatever you know (and you'd better do it in writing if you want to CYA).Around here the repos are usually listed with an out-of-town brokerage. The listing agent usually takes care to NOT KNOW A BLEEPING THING! You can't disclose what you don't know.My experience is that repos are usually bought by investors who theoretically know what they are getting into. The price makes up for the condition. The people that we usually sell repos to simply have their contractor look with them at the house and then make an offer based on that discussion, rather than actually having an inspection outfit take a look at it.I hate to say it, but around here the value of an inspection report seems to be inversely proportional to how slick a report you get. i.e. the snazzy report is done by someone who knows better how to operate their report software than they know what might be wrong with the house. I imagine that there are competent AND professional inspectors somewhere, they just don't seem to be here.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
It bothers me banks can take the position "we're selling the home as-is" when they have knowledge of problems and defects.It bothers me the listing Realtor can take the position "the home is being sold as is" and fails to disclose what he knows, when several contracts have fallen through based upon the inspections and the Buyer providing written inspection reports and using them as a basis for reducing the price of the home.According to the code of ethics a Realtor has a responsibility to disclose material facts about the condition of the home.If the listing agent gets asked a general questions such as "does the house have any problems?" He might be able to weasle out and say "all houses have problems". It sounds sleazy but maybe he can get away with that kind of response.But if he's asked a specific question like "does the house have mold" I don't think he can say "the house is being sold as is - do all the inspections you want"Why would any Realtor take a chance of getting sued for misrepresentation and risk losing his license?
That's why bankers have no idea who their fathers are.
That's why I said you'd better disclose and, for your own protection, do it in writing.I used to be a member of the various Realtor organizations, but I (our office) quit years ago. I have no respect for the Realtor organizations. There are many good reasons, but I'll not go on.Perhaps in the city there really is always another sucker. In a small town there are few secrets and those have a way of becoming general knowledge after awhile!Perhaps the fact that there is no single deal that can change your entire lifestyle when you live in a small town makes it easier to relax, help people, and take the dogs to work.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
Very good observation. Bob's next test date: 12/10/07
I think you are mixing up the terms and definitions and duties of the sellers and realtors.Any buyer has the right to sell "as is". That pretty much tells the buyer that there is something wrong and the seller is not going to warrant it, nor fix it and all offers should reflect that reality. The buyer gets to assume the worst and make an offer based on worst case scenario. The realtor has different responsibilities depending on who they represent. They have the duty to disclose, if they are asked, about known problems. If they know mold has been found, then they need to disclose it, if asked. The reason that agents dodge their disclosure duties is that they don't want to compromise their potential sale. Sometimes they are just nice agents trying too hard for their clients, sometimes they are just greedy. Either way, it's unethical.The bank, on the other hand is not being unethical. Their terms tell the buyers that they better beware. Bob's next test date: 12/10/07
I wish attorneys would go after these banks who screw people around. An attorney could specialize in helping people who've gotten screwed when they bought a bank owned house.The attorney goes after banks who've screwed people by selling them a defective home with a lot of problems.Banks are guilty of selling these crappy homes every day.Such as a POS that sat empty for months or years. We've all seen these houses. The yard hasn't been mowed. There's signs in the windows saying "keep out" and "no trespassing". These homes devalue our neighborhoods. Or houses that sat through the winter with broken windows that never got fixed because the bank wouldn't pay a few dollars to have this done.Or houses that were winterized and damaged. Houses that sat empty for months or years with the utilities turned off.Or houses that had roof leaks and the bank was aware of this and they just let it go. Before long the drywall in the ceiling is soaking wet. Then it collapses and falls. Hey I've seen it happen.Or bank owned houses that had pipes freeze under the bank's ownership.The banks have deep pockets and there's money there for an attorney to go after.The attorney would approach people who got screwed by these banks. He would advertise on TV. (Like the attorneys who go after doctors for malpractice).The attorney would hire experienced contractors to serve as expert witness. He would also use appraisers and realtors as expert witnesses.The attorney would pursue actual damages and punitive damages. The attorney would take depositions from neighbors about how the house sat empty for months and months. They would testify about the wind blowing the storm door off the hinges. The attorney would take depositions from the bank representative and ask him questions about what he did to maintain the home and take proper care of it. Maybe this would send a message to banks to stop screwing people.
I completely disagree with you on this.It's the buyer's "due diligence" to determine if they want to buy a property. The buyer makes the offer, then takes or declines a counterproposal. If an agreement to buy/sell is reached the price is market value. Remember market value? It is defined as the price the buyer offers and the seller accepts. All assessments and appraisals and BPOs are based on market value as defined.Who the seller is makes no difference.It is not the bank's fault that people will sometimes buy property without knowing what they are doing and it's not the bank's fault when some idjit has a grand plan that can't be completed as they imagined.Plus, if legislation were to make a building's problems something that had to be fixed before a sale, the net effect would be that home prices would go up, attorneys would have a hay-day, and you wouldn't be able to sell your own property without fixing it to someone else's idea of perfection before you could sell it.A bank is a business like any other. It's made up of people. The people who are charged with disposing of repos almost never see them (how could they?). Repos are all across the country. Banks are usually centered in a few big cities, or at the very least their repo departments are.Contrary to what some seem to think, banks DO NOT WANT TO REPOSSESS ANY PROPERTY! They hate it, in fact. It's a loss for them and bad press to boot. The only way a bank can avoid even more repos is to not loan to anyone without a high down payment and excellent credit. That sort of lending policy would have negative effects on poorer people and investors alike. (Not to mention brokers!)Those who complain the most about how the ball bounces are usually the ones who dropped it.
"Doubt is not a pleasant condition, but certainty is absurd."
~ Voltaire
Where did all that come from?!!!!!Take deep breath and calm down. When a bank sells a foreclosed property, they know it is normally beat up. That's why they will often take 60 cents on the dollar or less.If there were actionable issues, I can assure you that there is no shortage of lawyers who would take the case. Put yourself in the bank's shoes. Imagine owning 1000 properties all across the country. Do you really think it's possible to intimately know every detail about each property....knowing that you will only "own" it for a few short months and a new crop of damaged properties will be coming in every week. The logistics of knowing and fixing these properties makes it impossible for the banks to do anything other than sell it "as is". It's up to the buyers to do their due diligence and make offers that make them whole after they spend their additional dollars fixing everything. Your rant on the banks is very strange, given the amount of information already discussed in this thread. Either you weren't paying attention or you don't believe something. Either way, that post was way over the top. Bob's next test date: 12/10/07