Advise: Buying w/o An Agent But the Sellers Are Agents

17 years ago

My husband went to see a house without an agent (we haven't met one we like) and like it very much in the Bay Area. The seller is the listing agent. The house is in a very nice upscale neighbohood and they did some nice upgrades but it has a nice size, very plain backyard. It has 6 bedrooms but has no media/recreation room and no separate library/office which I really like to have. I know bedroom can be used for different purposes but it would have been nice for a house that big (over 4k sq. ft.) to have those built-in.

We originally thought the price was pretty good for this five-year home since we are from out of the county and the builder is still building new houses in the same subdivision and those are priced higher. (The cheapest and slightly smaller one is selling about 20k higher than this 5-yr. old one.)

One thing I'm really bothered with is their pricing. They said they are priced to sell and gave my husband two comparable listings that one were sole in Feb. '06 and the other were in May '05. By looking at those two comps, they are pricing accordingly but I have to LOL because they reflected the market a couple years ago when the market was at the top. Market has changed so much for the last couple of years. I can tell that they are just normal people who can be emotional and can't part their own home with the business of selling it.

I did a lot of digging on the web to find comps and found one similar-size, 3-yr. old house was sold in the same subdivision last August with a sold price that is $250K lower than the asking price of this house my hubby has seen.

The asking price is outside the higher end of the range that we originally wanted to spend but this is a very nice house in a secluded, prestigeous neighborhood and the rest of the houses in the same neighborhood are almost all more expensive (and larger)than this one.

I don't know if it is true that the market has turned around for the sellers as most people posted in this forum believe. As a buyer, I too certainly don't want to pay any more than the market reflects.

The house has only been on the market for 3 weeks. We decided to sit on it a bit for now. I don't have to move before the summer for my son's schooling so I can wait a bit but I also want to get this housing thing settled down as soon as possible.(hubby rents now and is 8-hr. driving from us) If we do decide to make an offer, what would be the best strategy to approach this touchy situation when we didn't bring in an agent with us to negociate and the sellers/agents don't seem to be realistic in price?

After I saw the comp I found and think the market has somehow dropped a bit from Last August, a selling price that is $250K lower than the asking seems to be a very good price to me. Any good advice on the pricing and negotiation as well? Am I the one who is being unrealistic?

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Comments (10)

mmelko
17 years ago
Try the website below to see possible comps. I have compared the numbers from this website to the comps that agents have given me in my area and found it to be pretty accurate.

Here is a link that might be useful: RealEstateABC
terezosa / terriks
17 years ago
It's not too late to bring your own agent in. Just tell them that you want/need representation.
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No we didn't sign any agreement with her, she was just one of my DH's customers. She was the only RE agent we (sort of) knew and she was a nice lady. She could have been working in the sellers interest but it didn't seem that way. She spent A LOT of time with us for a month. She even ended up calling our mortgage broker and got him to eliminate/reduce some of the fees which she thought were unreasonable. Like I said, we knew zilch about buying a house. We never thought we'd be homeowners unless we moved out of pricy SF Bay Area. The house was never listed for sale, no listing agent. Her office is nearby so we called her when we heard rumors that the estate was a mess and the kids would need to sell off the rentals they inherited. She recommended an inspector, came by the house with some comps, and made an offer we thought was awfully low. She did include 2 letters, one from us and one from our neighbor who remembered the landlord fondly and really wanted us to buy the house. She was sure they'd take it - a fast sale, as is, when they had dozens of rentals & tenants to get rid of. She was right, they acceped the offer immediately. We lucked out. I hope she's not insulted when we ask her to sign an agreement with us for the next purchase! Thanks for the tip.
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I would be the first to tell you if you werent happy with your agent/services, etc then switch, but from your description, it does sound like her manager was right and you dont fully understand the process or that you will be happy with anyone. How do you expect to have updated comps from your agent in a 3 week period? The comps from 3 weeks ago are the same as they are now. You said she has had good activity with lots of showings. That is exactly what you want from an agent. Agents can't make people buy your house, they can only expose it to as many buyers as possible. You are worried about putting it in the paper when you have lots of activity? WHY? Buyers typically go back to a house at least 2x before making an offer. With a 4 week listing, that can be impossible. It sounds to me like you have a fairly new agent which could be a good thing because they are hungry and are willing to do almost anything to keep the listing. (could be why her manager is so involved with you). I suspect an experienced agent would have passed on the listing. And no, if you sign with another agent, she will not be paid unless she is the one that brings the buyer to the table. IF ANY of the other agents that showed your house brings the offer, the new agent that you hire will be the one that gets paid.
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Can somebody hand me a towel? I'm drooling puddles on the tabletop here. This house is a-freakin-mazing. Unpainted original woodwork? Original light fixtures in storage? Intact built-ins? Be still my beating heart! Where I live, in its current condition that sucker would be priced at a quarter mil. Fully restored? Half a mil easy and probably three-quarters if in a desirable location. Without being able to see more of the exterior structure I'm not sure I could label it as a certain subtype of bungalow (and it's quite big for a bungalow, too) but I wouldn't tag it as a Tudor by a longshot... there are so many different influences that my instinct is simply to call it "Arts & Crafts" and leave it at that. (I'd have no problems with a haunted house, either. I get on well with ghosts - have had one before - and hang about with a passel of psychics and clergy of various flavors anyway.) That bathroom with the green plaid wallpaper above the tile is just begginging for a Bradbury, Trustworth, or Carole Mead frieze. Mmmm... (Did you know that Vandykes.com has vintage-style medicine cabinet kits that will coordinate nicely with that style of woodwork?) Re: the servants' bathroom, is that painted tile or scored plaster? If you decide to pull out that mini tub, either keep it with the house (goodness knows you have enough basement space to store it) or sell it, don't just pitch it - those are VERY hard to find! I'm guessing that's a 4-footer or perhaps even a 3 1/2 foot? A new 48" cast iron clawfoot runs about $1300 plus freight. 42" ones are almost impossible to find. The three sinks in the basement are very interesting, considering that a family of that economic stature would have been able to afford a gas or electric washing machine (and would have been mighty proud of it too!). I wonder if someone had a hobby that required multiple sinks - is there evidence that the spot it's in was ever used as a darkroom, perhaps? It looks like probably only the center set of taps is original. If I were physically able, I would grab a house like this in a split second. It is absolutely one of the loveliest houses I have seen for a long time, the "bones" are impressive and comparatively little has been done to screw it up! (There is little as pathetic as a thwarted old-house nut, except maybe a dogless dog person.) As for the mortgage, what about a FHA 203(k) rehabilitation loan?
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I used to sell real estate myself so knew some of what to look (and look out) for. We sold our house last year and I had a wonderful experience with a seller's agent but you have to do your homework. We almost went with the buyer's agent that we had for our new purchase (we owned two homes for awhile) as he worked out well for that purpose BUT when it came to us selling, it wasn't going well from the get go. It was a difficult decision as we had developed a more personal relationship but we ended up going with someone else just prior to us listing. Remember this is a business transaction. We interviewed several applicants (they were getting a hefty commision off of $500,000). Knowing that the MLS is in their favor, we talked commissions and what they would do. The realtor that I found was one in which I had posted directly to where we would be the selling agent and they would be the buyer's agent in which we would save on a commission. He called and it was his energy over the phone that I allowed him some time to come over and talk with us (ask anyone that knows me, I'm not an easy sale). Though he was young, his hungriness to get the listing was unmistakable. I called up his referrals and I asked what made him stand out (which proved very true for us too). We hired him. When filling out the contract he actually talked us into a higher sales price then we thought we should go (which we leveraged with giving him a higher commission if he pulled it off. By the way the other realtors that gave us estimates didn't think they could go quite that high. All this was AFTER we had decided on him not before (some people get swood by someone that can get more for their house). He was so adamant though, we figured we'd try it at the higher price. End result, we had a bidding war over the house and sold it within a week for basically the full price! Throughout the week, he emailed us a few times a day and talked to us as appropriate. We were informed at ever turn. In fact his son was born the day the 3 offers came in and you wouldn't have thought he missed a beat (though we felt a bit guilty). Though we had others that were more seasoned realtors, they seemed tired and mechanical. Go with a true salesman but make sure you follow up with their references. Good luck
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dianemargaret
17 years ago
Do you know what the circumstances of the $250K lower priced house were? Was it in forclosure? Was it damaged/ have foundation defects? Did a smoker live there?
elinsd
Original Author
17 years ago
I don't know the circumstances of the $250K lower priced house were. That house was 3 yrs. old and it was quality-built so I don't see any major problem with it.

Since I don't have the access to see the details of the listing and/or realtor's comments about it, my only believe was the market was pretty tough for sellers last summer and the seller was very motivated to sell for some reason.

There were 4 or 5 other comps in the subdivision in the last 6 months but those had a lot more sq. ft. than this one so their average per sq. ft. price were much higher and that makes sense.
cpowers21
17 years ago
It does help to know all the information when you are looking for comps. Houses that get foreclosed on or are sold via short sale will mess comps up if you don't know that's what they are.
laura1202
17 years ago
You definitely need your own agent. Have your h talk to some people he works with to get recommendations.

I have to say to that one comp that sold for $250K less than the asking price of the house you like doesn't mean that house should be priced at that same level. I'm sure that does sound like a "very good price" to you! But if the sellers are both agents, they *should know their local market conditions. They may be a little emotional since it is their home but $250K worth of emotion?

An agent could help you get more comps and more information.
teelag
17 years ago
I would agree that you need you own agent to get further info and to help you assess a current market value for the house.

A comp from May '05...that was the absolute height of the market in S. CA (where I just moved from). We had to drop our price 100K from what it would have gotten in the summer of '05 to get it sold Dec. '06. I don't think that '05 comp would be usable now at all. Even Feb. '06 was still a better market than it is now.
elinsd
Original Author
17 years ago
teelag, you are thinking exactly what I'm thinking about the market trend in CA whether it's in No. or S. CA. I don't think these owners are in any hurry to sell even though they are "AGENTS", they are posing such a unrealistic expectation to the price of their dear home. They also commented about spending $300K on upgrades but just like most people believe that most of the time you upgrade the house because you want to enjoy the upgrades that bring to you personally. If they eventually add value to the house, that's great. That's a bonus. But we shouldn't expect that any buyer will gladly agree to reimburse all the $ the owner spent on the things they may not even care for as much.

I'm pretty knowledgable and confident on the buying and selling RE in general so I am not afraid of representing myself. I just don't like to face this particular situation when the agents are selling their own home and they're not showing the honest, integrity and ... As most people think that the worse thing I'd get is a No from the owners/agents with my look-like low-ball but realistic offer.

Sure, the only thing I don't have is the same access to the current market data as an agent. I'm sure if I want, I can pay to get that kind of data. If these owners are half knowlegable agents, they should have known how bad it can be to set a high price when selling a home. But I just really don't understand these people, maybe they just simply want to test the water like anybody else to see if any fool would want to pay a high price to get the home.
try_99
17 years ago
Well everyone so far thinks that you need an agent. I am not so sure about the price tag though- 2.5/3% on a mil dollar home for getting just the comps? You guys have already done the legwork of finding your dreamhome. All you need to do now is to get the recent sold comps which I think you should be able to obtain from the local county/assessor's office if I am not wrong. Others from bay area may be able to provide information about who to contact to get the local sale price history. I assume you will be employing services of good real estate lawyer, inspector etc.

And in regards to the california housing market, we are long way from being normal, it will take some time before the market gives up the last 5 years of access fat. That is not my opinion! That is the general concensus on the most popular housing blog on net. Based on your description above it looks like you are looking in high end( > 1 mil ) houses, where the market is even more tougher...So take your time in shopping around and negotiating...And after doing your research if you feel that the list price is unreasonable then don't be afraid to submit your lowball offer.
c9pilot
17 years ago
elinsd-

Have you read "Freakonomics"? Sounds like you are smack in the middle of the RE agent scenario played out in that book.

Also, do the agent/sellers occupy the home? I didn't make that assumption because I once bought an investment agent/seller rental home (I was the renter - they put it back on the market as my lease was expiring so I bought it).

Advise: Buying w/o An Agent But the Sellers Are Agents

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mmelko

terezosa / terriks

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Advise: Buying w/o An Agent But the Sellers Are Agents

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