Making an Offer and the Shady Real Estate Broker

This is common.

They will usually continue to show the place until a deposit has changed hands.

Especially with last offer. I am not a broker, but sold my last apt myself. We had multiple offers and had to do the "Friday EOD" thing too. The problem with these are potential buyers who have one final chance with a blind offer get kinda crazy.

The bidder who gave us the highest offer, after 2 weeks decided that they couldn't afford it and backed down. Because I continued to show it, I had backup.

Posted by: guest at October 12, 2007 9:19 AM

Don't try to talk to the owners directly. The reason they hired a broker was so that they wouldn't have to deal with prospective buyers. (Well, that's certainly why I hired a broker.)

Posted by: guest at October 12, 2007 9:41 AM

Where is this place or some other identifying info that only another bidder would know? I might be in the same predicament. Would be funny if it was the same place.

Posted by: guest at October 12, 2007 9:51 AM

yes, very common.

until you sign a contract, you have no control. there is nothing you can do about it.

Posted by: guest at October 12, 2007 10:27 AM

It depends on the agency some milk this for all it is worth, others don't. My impression of corcoran and BHS is that if they get back to you that an offer is accepted, they want to know where to send the contract and there is only one contract so everyone else is for backup. If, however, a property is stormed with good offers they will setup a sealed bid deadline but won't tell anyone that their offer has been "accepted" beforehand.

My impression of warren lewis is that they keep phoning bidders asking for another 5k until there is only one left standing. Over the next four weeks, the highest, next highest and third highest drop out and the property goes back on the market :)

My impression of agayao and huebenor is that any company with two websites is going to have a forked tongue. They will say an offer is "accepted" then hold a "best and final" at which point one of the two witches that run the place decide who the "lucky winner" is. They also price below market hoping this will spike a bidding war. This works ok when the market is red hot, but feels icky right now.

Posted by: guest at October 12, 2007 10:57 AM

Your verbal offer is really worth nothing until a contract is signed since it doesn't commit you to anything. The seller is within their rights to keep showing the house just as you are within your rights to go to an open house for another property.

Posted by: guest at October 12, 2007 11:00 AM

From the buyer's perspective, it is nerve-wracking to have an 'accepted offer', only to find out the home is still being shown. Even worse, if the contract has been sent out that means the lawyer, mortgage broker, home engineer/inspector are all putting in time and effort on a prospect that could potentially be taken away. Not to mention that the lawyer & inspector will charge for their time.
It seems that when the contract is out...yes it is in the seller's interest to keep showing, but it is unethical to actually give the property away to a higher bidder once a contract is out.
You can keep that higher bidder on the backburner, but it is not right to take away the property from the buyer in contract.

Posted by: guest at October 12, 2007 12:03 PM

A couple of additional points: even though the seller might keep showing, the broker should tell the viewers that there's an accepted offer out there. So as the accepted buyer, this gives you some comfort that some other potential bidders will not bother to put in bids. For the seller, this might encourage potential bidders to bid higher, and puts them on notice that they need to move quickly. (There was a question in another post about whether the broker's claim of "an accepted offer" is legit or just a marketing tactic - in this case, it's real.)

More potential comfort for the accepted buyer: just like in stock investing when it's proven to be a bad technique to try to time the market, so too in selling do you run a real risk if you try to string along your accepted buyer in the hopes that another showing will bring a higher offer. At a certain point, the seller needs to commit in order to go to contract. Reasonable/ethical sellers will honor the accepted offer, even if a higher offer comes in when the contract is out, because there's a real risk that the higher bidder will crap out, or take too long, and they'll lose both bidders.

As a seller, I continued showing when the contract was out to our buyer, and in fact turned down a higher offer that was received, because the $ differential wasn't great enough to cover the risk that the process would drag out longer, cause me to have a few extra months of mortgage and maintenance payments, etc. So our buyers might have been nervous, but in the end appreciated us sticking with them.

Good luck.

Posted by: guest at October 12, 2007 12:53 PM

If you want to buy the place, don't pull your offer quite yet - there are 2 possibilities here. It may be that the broker and/or seller thinks the open house market is busy enough that they want to hold one more to see if they get an offer at, or closer to, the asking price, even though they know this risks alienating those who put in offers by EOD Friday, and that they could lose those offers as a result. (Or, it could be that since they won't be deciding among the offers received Friday until next week, as there are often additional questions the seller might have that are raised by the terms of the offer that they won't have answers to until then, they figure they might as well hold one more open house.)

Even if this is the case, leave your offer and let them do it - (your offer isn't binding on you anyway, so why bother to pull it - it isn't like brokers aren't known to lie about there being offers already, even if you did pull yours and there were none) - and they may not get a higher offer that is as well qualified (important if it is a coop), so your offer may then be accepted and proceed to contract quickly. Just focus today on getting your ducks in a row so you can move quickly next week if that's the case - get an attorney if you don't have one yet; get names of inspectors if you want to have an inspection done; talk to mortgage banks or brokers if you haven't done so yet. And go to open houses this weekend - you might just find something you like even better.

The other possibility is that they are just showing again for backup offers in case yours (or whoever is picked as best from the EOD Friday offers) falls through. In that case, you would be acting too soon to pull your offer yet.

Yes, it is annoying to feel like your offer is being used to get better ones - I can certainly understand the desire to pull the offer in this situation, and would probably consider doing so myself in your situation, as I hate being jerked around. (When I'm dealing with someone who acts badly, I figure it is just the beginning, and it will only get worse as the deal moves along.) But before you do, ask the broker why they are showing again (it may just be for backups - if the broker assures you of that, hang in there), but also ask when they will pick the offer to go with from among those received by EOD Friday. If they are doing so next Mon. or Tues, and you want the place, then give them a few days past Sunday to accept yours. If they don't give you a final answer by sometime next week, then you can pull out (or just don't even bother to contact the broker again.)

If you do pull the offer then, be sure to tell the broker exactly why you are doing so, and tell them you are a serious buyer, and don't like having your offer held out as bait to attract better offers. Then you can always offer again in a few weeks if the broker doesn't end up with a better offer, or just let the broker know you remain interested, and to let you know if and when they are ready to proceed to accepting an offer and getting into contract, if you haven't found something else by then.

The third possibility is that the broker (or seller) is just one of those that is impossible to deal with, and if that is the case, you will certainly find out in the next few days. In that case, I wouldn't hesitate to contact the seller - once you've decided the broker is worthless, you really have nothing to lose - but I don't think you'd be likely to gain much. (You do realize that the EOD thing may just lead to the next step, a bidding war, as other buyers whose offers were rejected turn around and offer more money.)

Some sellers (like me when I sold a coop) hire brokers basically because they are good at marketing and will bring in more people to open houses than I thought I could on my own (and because I think a lot of buyers think FSBOs can sometimes act a bit nuts, or expect to get a much, much lower sales price from a FSBO.)

But once offers were made, I was willing to talk to potential buyers who made offers - I wanted to get the best sense of the offers I was evaluating (to get past buyer broker's misrepresentations about the buyers finances) so I could figure out which offer would be most likely to pass my picky, picky coop board (since they ultimately rejected the first incredibly-well-qualified buyer I contracted with, which wasted 3 months of both the buyer's and my time, and our money.) A buyer being able to pass my board was much more important to me than getting the highest price.

After subsequent offers were made, I found that having one (or two) brokers in the communications between me and the potential buyers was always a hindrance and not a benefit, so I was happy to talk to those making offers, as none of these offers were perfectly clean or clear-cut, and all raised significant questions as to the buyer's ability to either pass the board or to actually get the money to close.

But most sellers won't talk to you - the seller picked a broker who is doing the EOD thing because the seller is comfortable with that bidding arangement (I wasn't as a seller, as I always walked away from it myself when I was a buyer as I didn't want to get into a bidding war.) So it probably isn't worth your time to contact the seller, unless you just can't walk away from the place without trying. (Though you'd have a better chance of getting them to talk to you if your offer was quite near the asking price than if it were considerably lower.)

You will probably be able to figure out from the broker if the seller is willing to move forward on your offer by early next week by asking the broker the questions outlined above. Good luck.

Posted by: guest at October 12, 2007 1:30 PM

When we sold our condo earlier this year we received multiple offers at asking price. What this tells a seller and a broker is that ask was too low. Your goal as a broker is to get the highest possible price, both because your commission is based on it, but also because that's the "right" thing to do for the seller. We asked all bidders to come back with a best and final offer, the top ones were almost 20% over ask. Over the next month we had a couple of the potential buyers back out (changing jobs, concern about economy, etc) before we finally went to contract. While we didn't put the place back on the market during the month it took to get to contract, the broker did show it several additional times.

The other thing with the EOD thing is that the seller may well have gone to contract on a place themselves and now need to show for mortgage or coop board purposes that they're making a good faith effort to sell their current home.

Posted by: guest at October 12, 2007 1:38 PM

To 12:03. It is nerve racking. Buyer should not be on the hook for each engineer, lawyer, mortgage broker etc. When I bought my house we signed a contract before having an engineer inspect the house. We protected ourselves by having the contract subject to satisfactory inspection which we had to complete in a very short time frame (i week I think). You don't have to pay a mortgage broker until you've signed the contract, since a standard contract contians a financing contingency giving the buyers an out if that can't get financing within a specified time range (i.e. 30, 45 or 60 days). The financing contingency should be acceptable to a seller if you get pre-approved by a bank (that also costs you nothing).

Posted by: guest at October 12, 2007 2:43 PM

1:30 here again:

Hmmm, when I got multiple offers (at or within 10K of ask) after each open house, I didn't assume, as 1:38 said, that my place was underpriced - but that I had priced it right. Maybe that's because I had a coop, and the highest offer on a coop isn't necessarily the best if your board won't pass the buyer. In a condo situation, you can go for the highest offer; in a coop, there are very often many other variables in the offer that matter more.

I do think I could have sold for more than I did - if I took the bidding strategy (and if I had chosen a broker who advocated that strategy.) But I purposely didn't - because I wasn't ready to risk having those bidding buyers disappear one by one and be left still on the market a few months later, now stale, and buyers wondering what was wrong with the apartment/building that all those bidders they heard about had disappeared.

Yet another reason why, financially speaking, owning a condo has certain advantages over coop ownership.

Posted by: guest at October 12, 2007 4:33 PM

Well, at least they are upfront about what they do. I talked to somebody there when I was going to sell, and the guy told me about how they price low and get lots of bids to have a bidding war and sell way over ask - since I hated that as a buyer, I didn't use A & H.

Posted by: guest at October 12, 2007 10:11 PM

I agree ... stay AWAY from Aguayo & Huebener. They are the most unethical of brokers. The whole bidding scheme is a way to jack up prices and they are entirely dishonest in working one offer against the other. Watch your inspection and attorney fees get pissed away while they come up with pitting one buyer off another, all the while claiming their system is designed to prevent wars. Nonsense. It's devised to create the war but shroud it in a bunch of what they perceive as defensible lingo, which is nothing more than double-speak for WE WILL PISS AWAY any money the potential buyers spend prior to K. Roslyn Hubener is a particularly filthy piece of slime in her machinations, keeping the agents under her in the dark as she double-deals. Just my very strong opinion, but so be it.

Posted by: guest at October 29, 2007 1:15 AM