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What I'd do different next time: A real estate agent/transaction story/rant
Posted on 8/2/17 at 12:07 pm
Posted on 8/2/17 at 12:07 pm
This'll be long, but hopefully someone can use it and save some time/headache in the future.
Before ranting about the things that have frustrated me, its only fair to make one point, THE ONLY reason, albeit a very important one, I found to benefit from using a realtor. Having the house on the MLS absolutely got this house sold, and got it sold quickly. We had it on FSBO and Zillow with very little action for a month. In the first week listed on the MLS, we had 4 showings, resulting in 2 full price offers.
My mistakes and frustrations-
1. Choosing the realtor.
We met the agent we used for this transaction in a social setting a few years ago. I was friends with her husband, she was friends with my wife. She provided me with some info on a few comps over a few years and I promised her that if we decided to use a realtor to sell, she would be the one. Shouldn't have promised that. I've always known that she is good, but not the best. I shouldn't have put myself in a position that I wouldn't feel comfortable backing out of. I thought it would be fine and wouldn't make that much difference. I was wrong. I should have used who I actually thought was the best.
2. Not negotiating the commission percentage.
I knew for a fact that many, if not most sales in our area were working on a 5% commission. For our house, that meant a difference of $1,650. I operated under the assumption that we'd be pricing and negotiating correctly. We didn't in either case. Now that 1,650 bothers me a little more.
3. Price setting and negotiating the offers.
I trusted her to come up with a good price. In hindsight, she completely underestimated the demand of our market. In the price range of 140-180, there were less than 4 houses in the area for sale. We received two nearly identical offers on the first day of showing. I suggested that we go back to both and explain that we had multiple offers, and that they should submit their absolute best offer. She recommended that we counter to both at full asking price with the same closing costs they asked for in their initial offers. I deferred to what I assumed was her experience in negotiating offers. Bad idea. The buyer whose offer we didn't accept just closed on a comparable house in the exact same neighborhood for a $10,000 higher asking price with ZERO seller concessions.
TL/DR
Don't be a baby. If you wanna know what not to do, read the whole thing.
Before ranting about the things that have frustrated me, its only fair to make one point, THE ONLY reason, albeit a very important one, I found to benefit from using a realtor. Having the house on the MLS absolutely got this house sold, and got it sold quickly. We had it on FSBO and Zillow with very little action for a month. In the first week listed on the MLS, we had 4 showings, resulting in 2 full price offers.
My mistakes and frustrations-
1. Choosing the realtor.
We met the agent we used for this transaction in a social setting a few years ago. I was friends with her husband, she was friends with my wife. She provided me with some info on a few comps over a few years and I promised her that if we decided to use a realtor to sell, she would be the one. Shouldn't have promised that. I've always known that she is good, but not the best. I shouldn't have put myself in a position that I wouldn't feel comfortable backing out of. I thought it would be fine and wouldn't make that much difference. I was wrong. I should have used who I actually thought was the best.
2. Not negotiating the commission percentage.
I knew for a fact that many, if not most sales in our area were working on a 5% commission. For our house, that meant a difference of $1,650. I operated under the assumption that we'd be pricing and negotiating correctly. We didn't in either case. Now that 1,650 bothers me a little more.
3. Price setting and negotiating the offers.
I trusted her to come up with a good price. In hindsight, she completely underestimated the demand of our market. In the price range of 140-180, there were less than 4 houses in the area for sale. We received two nearly identical offers on the first day of showing. I suggested that we go back to both and explain that we had multiple offers, and that they should submit their absolute best offer. She recommended that we counter to both at full asking price with the same closing costs they asked for in their initial offers. I deferred to what I assumed was her experience in negotiating offers. Bad idea. The buyer whose offer we didn't accept just closed on a comparable house in the exact same neighborhood for a $10,000 higher asking price with ZERO seller concessions.
TL/DR
Don't be a baby. If you wanna know what not to do, read the whole thing.
15
Posted on 8/2/17 at 12:23 pm to AUjim
Your points are well taken. I'm not quite on the agents aren't needed train quite yet because if you are busy, good agents do provide a needed service. However, after selling two houses and buying three now I've realized that many agents are way too timid with respect to pushing for the best deal for YOU. They do not want to lose a buyer (or seller if they are on the buyer's side) because that means they have to keep working the house. They want the deal to close as fast as possible and will try to convince you that your asking price, offer, and other terms are too aggressive. No don't ask for that concession, no that counter is insulting and will cause them to walk, if you list for that you won't get any traffic, etc. You have to be willing to do your own research and stick to your guns with your agent. No matter how good they are, the deal is much more important to you than them so you have to look out for yourself.
This post was edited on 8/2/17 at 12:24 pm
Posted on 8/2/17 at 12:29 pm to AUjim
Dude, you're really bitching about $1,650?
Did she go over the neighborhood comparables with you and explain how she arrived at the price she set? Do you know for a fact that the other house was in the exact same condition, did it perhaps have any other amenities yours did not?
Sounds like a lot of your grief could have been avoided had you done your homework as well?
Did she go over the neighborhood comparables with you and explain how she arrived at the price she set? Do you know for a fact that the other house was in the exact same condition, did it perhaps have any other amenities yours did not?
Sounds like a lot of your grief could have been avoided had you done your homework as well?
Posted on 8/2/17 at 12:36 pm to TJG210
It didn't just cost me $1,650. But hey, thanks for stopping by to leave a comment.
Posted on 8/2/17 at 12:39 pm to AUjim
quote:
The buyer whose offer we didn't accept just closed on a comparable house in the exact same neighborhood for a $10,000 higher asking price with ZERO seller concessions.
Doesn't mean a thing. The house could be updated, have better finishes, be on a better lot, have a better floor plan, etc.
Don't beat yourself up after the fact. You're having sellers remorse in that you think you left money on the table. Let it go. Maybe you did and maybe in your specific situation you did the best possible.
Posted on 8/2/17 at 12:47 pm to VABuckeye
I hear you, and in many circumstances it wouldn't. However, this neighborhood is full of spec houses that are all very similar. It has the exact same counters, flooring, and a very similar floor plan. It is 35 square feet larger. While I realize we may not have been able to get 175k for ours, it's a direct comp and we probably should have been able to get 170k and not paid $4,000 in closing costs.
eta: what bothers me the most, is that she didn't even really try. She rejected my idea of going back and asking for their best offers.
I've sold two other houses previously and gotten full-price offers at and above appraised values without the help of any Realtors. That's pretty much how I'll do it from this point forward.
eta: what bothers me the most, is that she didn't even really try. She rejected my idea of going back and asking for their best offers.
I've sold two other houses previously and gotten full-price offers at and above appraised values without the help of any Realtors. That's pretty much how I'll do it from this point forward.
This post was edited on 8/2/17 at 12:50 pm
Posted on 8/2/17 at 12:59 pm to AUjim
Thanks for posting. I'll have to remember when I can ever afford to buy a house.
Posted on 8/2/17 at 1:13 pm to AUjim
quote:
this neighborhood is full of spec houses that are all very similar.
Not if the selling prices range from 140k-180k.
Posted on 8/2/17 at 1:16 pm to AUjim
I would not be that upset about the possibility that you could have got more for your house. If you price it 10k more, there is a possibility that you don't get either offer. A lot of people only look at new listings because they have already been through the whole search one good time. If you price it too high to start, then that person may never notice your house when you drop the price.
I understand not being happy with your realtor but you should be more upset at yourself. It's ultimately your decision on the price and what to counter. If you tell your realtor to counter back at a certain price, she has to counter back at that price. She can recommend you not to do something but ultimately it's your decision.
I understand not being happy with your realtor but you should be more upset at yourself. It's ultimately your decision on the price and what to counter. If you tell your realtor to counter back at a certain price, she has to counter back at that price. She can recommend you not to do something but ultimately it's your decision.
Posted on 8/2/17 at 1:30 pm to AUjim
FWIW, this happens routinely. She sold it for you, I wouldn't sweat it and move on.
I agree though, and I've been on the buying end of this many many times. I don't understand why in a multiple offer situation any and ALL offers should be told "Best and Final" by X date. Screw full "asking" price, that was just a start of negotiations.
I can't tell you the amount of times I low balled a house only to lose out by $1-2k when I would have paid $5k or more but I never had a chance to give a 2nd offer.
Moral of the story here: Most realtors are never aggressive enough because they would rather a quick easy sale than earn the buyer just a little more. Its only 2% or whatever more to them.
I agree though, and I've been on the buying end of this many many times. I don't understand why in a multiple offer situation any and ALL offers should be told "Best and Final" by X date. Screw full "asking" price, that was just a start of negotiations.
I can't tell you the amount of times I low balled a house only to lose out by $1-2k when I would have paid $5k or more but I never had a chance to give a 2nd offer.
Moral of the story here: Most realtors are never aggressive enough because they would rather a quick easy sale than earn the buyer just a little more. Its only 2% or whatever more to them.
This post was edited on 8/2/17 at 1:31 pm
Posted on 8/2/17 at 1:38 pm to swanny297
You're not looking at it the right way. If a buyer knows they can spend 175, what price range are they likely to search? The 140-180 range pertains to the entire market for that buyer's price point.
Posted on 8/2/17 at 1:44 pm to baldona
Exactly. A $10,000 higher price only nets the agent an extra $210.00 on a 6% sale @ a 70/30 agent/broker split.
Posted on 8/2/17 at 1:54 pm to AUjim
quote:
Exactly. A $10,000 higher price only nets the agent an extra $210.00 on a 6% sale @ a 70/30 agent/broker split.
You just gotta know that going in. They are always going to err on the side of caution. I mean the key is to get some offers, once the offer is in most people aren't going to walk without a couple rounds of negotiations.
This post was edited on 8/2/17 at 1:55 pm
Posted on 8/2/17 at 2:00 pm to AUjim
I'm in the middle of purchasing a home where neither side is using a real estate agent, and I'm not really sure what purpose the agent would provide to us at this point.
Granted, this is my first home and I've never used a real estate agent before, I just don't see what they would have done for me. It's pretty easy to find homes online. What else do they do? Put together the purchase agreement? That form is easy to find online, or through other resources.
Granted, this is my first home and I've never used a real estate agent before, I just don't see what they would have done for me. It's pretty easy to find homes online. What else do they do? Put together the purchase agreement? That form is easy to find online, or through other resources.
Posted on 8/2/17 at 2:48 pm to AUjim
a good bit of advice I have learned is if you are looking for a listing agent, find a piece of property they are currently listing and call them out of the blue and have them show you that property, ask questions while they are showing it ask questions about negotiations, etc, you can learn a lot about them and their style
dont use an acquaintance as an agent, it needs to be strictly business
dont use an acquaintance as an agent, it needs to be strictly business
Posted on 8/2/17 at 3:06 pm to Tigerpaw123
That is pretty great advice.
I absolutely failed when I assumed that because our agent is established and constantly busy that she actually knows how to analyze market data or actually negotiate the best deal for us. Putting an exact number on it is impossible, but it absolutely cost us enough money to make a difference. Our kids won't starve, our power won't get cut off, all this money is going toward a vacation, savings, and investments. Just wanted to share the mistakes that I know I made, hoping that others could refer back or ask questions if they get in the same spot.
I absolutely failed when I assumed that because our agent is established and constantly busy that she actually knows how to analyze market data or actually negotiate the best deal for us. Putting an exact number on it is impossible, but it absolutely cost us enough money to make a difference. Our kids won't starve, our power won't get cut off, all this money is going toward a vacation, savings, and investments. Just wanted to share the mistakes that I know I made, hoping that others could refer back or ask questions if they get in the same spot.
Posted on 8/2/17 at 4:41 pm to AUjim
I had a similar case when selling our first home. Had an offer on the first day for list price less $5k in closing. My agent said it was as good as I was going to get, but had 2 other showings scheduled.
We accepted offer 1. Other two people saw the house and offered list price with no concessions.
We accepted offer 1. Other two people saw the house and offered list price with no concessions.
Posted on 8/2/17 at 6:22 pm to AUjim
Just listed my house today. Been here 14 yrs and bought directly from builder last time. So over the years figured I always FSBO and save the commission. I am very glad I have this agent. Helping with buying the other house and way too many unknowns that we probably wouldve made a poor decision that might cost more than the commission alone. Now we just need/want full asking price!
Posted on 8/2/17 at 6:31 pm to baldona
quote:
I agree though, and I've been on the buying end of this many many times. I don't understand why in a multiple offer situation any and ALL offers should be told "Best and Final" by X date. Screw full "asking" price, that was just a start of negotiations.
I can't tell you the amount of times I low balled a house only to lose out by $1-2k when I would have paid $5k or more but I never had a chance to give a 2nd offer.
Moral of the story here: Most realtors are never aggressive enough because they would rather a quick easy sale than earn the buyer just a little more. Its only 2% or whatever more to them.
The popular thing to do here is have an offer review date, and the majority of offers have escalation clauses to go up in the case that there is a stronger offer. The housing market here is intense though
Posted on 8/2/17 at 6:38 pm to TJG210
quote:
Dude, you're really bitching about $1,650?
I guess your reading comprehension sucks?
Way I see it, is his apathetic attitude towards this sale cost at least $15-20k
$1650 overpaid commission
$10,000 less sales price
$2500-5000 in unnecessary concessions
as for the OP, better to learn this lesson now than on a house that cost much more than this.
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