Real Estate Discussion Forum
- Thread starter Slinky Bender
- Start date
You are not required to use a broker, and frankly I find most to be quite worthless. But a good one gives you more value than what you pay them . As someone who has bought and sold of 100 of my own deals as a principal (in addition speaking of thousands as a broker) I'm able to give advice about finding and negotiating on Real Estate that few others are.
Here is an example:
I am working with a buyer who has been looking on and off for a couple of years. She really began looking in earnest this past May because she has to close on the units by April 2024. Back in August she found a unit she was interested in and made an offer. We went back and forth and ended up $50,000 apart. She really liked the unit so she asked if she should just pay what their bottom line was.
I told her it was totally up to her, but that I thought that the market wasn't going anywhere and that if she waited until after Thanksgiving, and the unit was still on the market, that most brokers would have a "come to Jesus" meeting with their sellers after Thanksgiving telling them that they they need to reduce the price to take the unit off the market.
There was a rather substantial price drop after Thanksgiving. We are now in contract for $10,000 less than her previous offer. So listening to my advice saved this buyer $60,000 which is 8% of the purchase price.
Here is an example:
I am working with a buyer who has been looking on and off for a couple of years. She really began looking in earnest this past May because she has to close on the units by April 2024. Back in August she found a unit she was interested in and made an offer. We went back and forth and ended up $50,000 apart. She really liked the unit so she asked if she should just pay what their bottom line was.
I told her it was totally up to her, but that I thought that the market wasn't going anywhere and that if she waited until after Thanksgiving, and the unit was still on the market, that most brokers would have a "come to Jesus" meeting with their sellers after Thanksgiving telling them that they they need to reduce the price to take the unit off the market.
There was a rather substantial price drop after Thanksgiving. We are now in contract for $10,000 less than her previous offer. So listening to my advice saved this buyer $60,000 which is 8% of the purchase price.
Nope.
His advert in local weekly, besides saying he was #1 in sales for X # of years for his (well known) agency in NYS, said free, no obligation evaluation and estimate of your home.
In addition I felt I made a legitimate and good faith offer of negotiation for his services given the hot seller's market* at the time (I would have hired him if we reached agreement). My hands were clean ethically IMHO. It was up to him to prove to me, i.e., sell me, that his fee for services was worth it to me financially.
Although I'm not Jewish, there are many Yiddish terms that I and many New Yorkers use that fits a situation better than English words, e.g., I am not a schnorrer.
* as verified by the # and quality of offers received w/o a broker or MLS from a ONE DAY open house.
His advert in local weekly, besides saying he was #1 in sales for X # of years for his (well known) agency in NYS, said free, no obligation evaluation and estimate of your home.
In addition I felt I made a legitimate and good faith offer of negotiation for his services given the hot seller's market* at the time (I would have hired him if we reached agreement). My hands were clean ethically IMHO. It was up to him to prove to me, i.e., sell me, that his fee for services was worth it to me financially.
Although I'm not Jewish, there are many Yiddish terms that I and many New Yorkers use that fits a situation better than English words, e.g., I am not a schnorrer.
* as verified by the # and quality of offers received w/o a broker or MLS from a ONE DAY open house.
@Slinky Bender agreed, a good broker can offer a net positive. However, as a seller in a hot market, I'm not sure how I would have been helped me.
I would enter into a ARM where there was a teaser rate for 5 years and no closing costs. The rate would then be adjusted to prime + couple points.
I'd invest the $ I would have paid cash w/o a mortgage and then pay off the month before the rate increase.
BTW, I always paid my prop taxes directly, i.e., w/o a bank escrow account. For some reason everyone I know never knew that that was an option (they don't ask I guess). Back in the day before the $10K limit I would plan when I paid (as to Fed tax year) to use the deduction to my advantage.
I'd invest the $ I would have paid cash w/o a mortgage and then pay off the month before the rate increase.
BTW, I always paid my prop taxes directly, i.e., w/o a bank escrow account. For some reason everyone I know never knew that that was an option (they don't ask I guess). Back in the day before the $10K limit I would plan when I paid (as to Fed tax year) to use the deduction to my advantage.
20 years ago. I forgot the bank (and too lazy to look up my records) but I think may have been EAB.
The thing is in each of the banks I went to (I think 3 to get the best deal) wouldn't bring it up until I asked.
I also think the down payment had to be sufficient so the bank was protected (again I forget but I think a 25% down payment got me a better rate and the ability to pay my own taxes). Somehow I remember that I also had to have my mortgage payment taken direct out of a checking account with them — so I opened one just for that. If you don't ask they don't tell you.
It'd like the game some vendor pulled on me once when I needed 1700 piece's of a certain part and I was quoted a price. Only when I asked how much for the next price break up and it turns out a full reel of 2500 total price was cheaper than 1700. So it paid for me to buy 2500 and throw away 800 pieces. The vendor wasn't going to tell me this unless I asked.
The thing is in each of the banks I went to (I think 3 to get the best deal) wouldn't bring it up until I asked.
I also think the down payment had to be sufficient so the bank was protected (again I forget but I think a 25% down payment got me a better rate and the ability to pay my own taxes). Somehow I remember that I also had to have my mortgage payment taken direct out of a checking account with them — so I opened one just for that. If you don't ask they don't tell you.
It'd like the game some vendor pulled on me once when I needed 1700 piece's of a certain part and I was quoted a price. Only when I asked how much for the next price break up and it turns out a full reel of 2500 total price was cheaper than 1700. So it paid for me to buy 2500 and throw away 800 pieces. The vendor wasn't going to tell me this unless I asked.
As I posted: "I called in the top realtor in the area. I went over the house , comps etc. and came up with a selling price. "
So I think it was reasonable for me to assume that he knew what he was doing when he came up with "a selling price"
Of course my net would have been 94% of that.
That said I took the 2nd highest bidder (the one I thought would have the least problems closing) and ended up 3% over asking.
So even if he managed to realize, as you posted, that "lots of stuff was going well over asking price" (and why wouldn't he know that from the get-go?) there was 6% to overcome plus the additional 3% I got over asking.
Realize that all this happened over perhaps a 3 week period (not including time to closing).
I was selling a quantity of 1 house, that I was not living in, was paying insurance and taxes on and loosing opportunity cost on the future sale proceeds.
I'm not saying that employing a realtor is wrong, but given the circumstances for me, I think I received a close to optimal return on my efforts.
So I think it was reasonable for me to assume that he knew what he was doing when he came up with "a selling price"
Of course my net would have been 94% of that.
That said I took the 2nd highest bidder (the one I thought would have the least problems closing) and ended up 3% over asking.
So even if he managed to realize, as you posted, that "lots of stuff was going well over asking price" (and why wouldn't he know that from the get-go?) there was 6% to overcome plus the additional 3% I got over asking.
Realize that all this happened over perhaps a 3 week period (not including time to closing).
I was selling a quantity of 1 house, that I was not living in, was paying insurance and taxes on and loosing opportunity cost on the future sale proceeds.
I'm not saying that employing a realtor is wrong, but given the circumstances for me, I think I received a close to optimal return on my efforts.
In a related issue, I knew a guy who was trying to get a mortgage on a place in a nicely kept up heavily Italian area of Brooklyn. The bank came back and said that the comps of neighboring similar buildings had recent selling prices of less than half and they couldn't justify a mortgage, even with a 20% down payment for the contract price.
Turns out the guy convinced the bank (thru legit appraisals)that the price was appropriate and that that the modus operandi with the Italian families was to sell at a low price with big, under the table cash (no trail) toward making up the remainder.
When I asked him isn't that ripe for the buyer getting screwed as his only recourse was at the contract price and not at the true price paid he said "Oh no, they don't allow that sort of thing in this neighborhood."
Turns out the guy convinced the bank (thru legit appraisals)that the price was appropriate and that that the modus operandi with the Italian families was to sell at a low price with big, under the table cash (no trail) toward making up the remainder.
When I asked him isn't that ripe for the buyer getting screwed as his only recourse was at the contract price and not at the true price paid he said "Oh no, they don't allow that sort of thing in this neighborhood."