Forum
« location of front fence. I want to freecycle my kitchen »
April 24, 2009
Broker tactics
Lets take a “hypothetical situation”
You look at a property.
You pass.
After a few months, you contact the broker.
He says there’s an accepted offer and contract out pending signature.
The broker then comes back and says the seller’s have agreed to tell us the accepted offer, if we pay $xxx (less than 1%) over the accepted offer they will consider.
Its April 2009 not July 2007.
Thoughts?
Comments
I'd run, not walk away from any seller who gets a serious offer and then greedily looks for another while sitting on the contract.
But then what do I know? I think the system here sucks. But I would not want to be on even the winning side of such a stenchy transaction.
Posted by: cmu at April 24, 2009 7:55 PM
I will not tell you the exact thoughts because due to the language they will be censored. But to give you a rough idea you can pretty much tell the broker to go f ... himself.
Posted by: hannible at April 24, 2009 7:57 PM
If you remember that in surveys taken RE Brokers compete with car salesmen for most despised "professionals" you can look at the situation a little more objectively and take for granted that:
1. the broker could be lying.
2. the broker could be manipulating the sellers.
3. the sellers could be insane.
4. the broker and sellers could be insane and liars.
So that said, how badly do you want the property? Is the price they are asking something you want to pay? Is it fair market value (2009 market value)?
If you want the property at that price don't let their insanity keep you from it. Otherwise don't waste your energy (because you know they will).
Posted by: gennaro at April 24, 2009 8:44 PM
I would say the phrase, which rimes with bucket.
Posted by: bobjohn at April 25, 2009 12:13 AM
i would ask details in a very noncommital manner. If theres value, then there's value.
However, based on the history, you have the right to ask for additional protections to keep the contract from breaking up over any circumstances. Things like paying costs, attorneys' fees, value of your time.
You could do that stuff and it would add up quickly. It would provide a disincentive pretty fast.
Posted by: slick at April 25, 2009 7:22 AM
What neighborhood?
Posted by: mopar at April 25, 2009 11:13 AM
Actually, it sounds reasonable to me. The contract has not yet been signed by the buyer. The seller is still free to consider other offers.
One percent higher is not much. (Then again, they could be lying). It's possible they have a decent offer but the buyer doesn't have a big down payment or good credit, and they might think your offer would be more solid. This happens with coop sales all the time.
Dunno.
I guess the question is whether the amount is what you want to pay. Definitely, it would be silly to pay higher than market rate because the agent is pressuring you with a story.
Posted by: mopar at April 25, 2009 11:18 AM
I'm with Mopar, at least in that there could be nothing at all wrong here.
Not inconceivably, the folks sitting on the contract are dawdling around. They haven't signed, they're trying to add things they knew all about back into the negotiations ("our engineer says that the flooring has to be replaced" when actually it was obvious to anyone with eyeballs that the floors were shot.) and the sellers are saying "Look, if you don't want to sign, fine. We'll find another buyer." I don't think that is really so awful. Or, they just can't close. Things change all the time. So the buyer said "sorry, we can't sign a contract afterall."
Do you even know that your offer is higher? I wouldn't sweat the last contract but if you don't want to go up, don't. That is negotiation. If you'd rather not buy the house than pay 1% more, okay. If you're willing to call their bluff and walk away, okay. If you think it is worth 1% to know this will be your next home, well then ...
It is an imperfect science. They want the most they can get but they also want to sell. You want to play as little as you can, but you also want to buy. So you negotiate.
Posted by: serpentor at April 25, 2009 12:01 PM
I'm leaning toward the 'bucket' camp.
First, you don't know if the contract hold-up is on the sellers' end or the buyers'. The buyers could have signed off and are waiting in good faithe for the sellers to sign, and the sellers' greed was piqued by your call. Add into that the fact that the broker says the sellers will 'consider' (not agree to) a higher offer and it seems like someone is trying to ignite a VERY late-in-the-process bidding war.
A more ethical way for the broker to handle it would have been to tell you: contract out, should be signed by X date, if sign date passes, seller will entertain other offers.
I'm also a little uncomfortable with the broker's soliciting your offer. It's one thing if you call up and say, hey, here's our offer if the property is still available. It's another for the broker/seller to give you a HIGHER number for you to get admitted into the process.
I'm of the mind that if the seller/broker is playing this game with you, they'll keep playing it when you're the one on the other end of the contract.
I guess you have to gauge how much you want the property and your tolerance for dealing with characters like these. If you do go ahead, go in with your eyes open and put in the contract a firm and fast "contract sign" date for both parties and be prepared to walk if it's not met.
Good luck.
Posted by: zeebee_in_bklyn at April 25, 2009 12:53 PM
It depends how badly you want the house and whether or not the higher price makes sense.
Posted by: IronBalls at April 25, 2009 7:01 PM
just for clarification, when brokers have told me about "offers at $X", I generally laugh and tell them they need to sign quickly.
Posted by: slick at April 25, 2009 8:00 PM
Just one very simple thought: Place your bid (totally independent of whatever bullshit they say is on the table) and treat the broker like an ugly chick (assuming you're a dude). Either "she'll" call you or you just completely forget about the whole opportunity.
That's power (to the one most willing to walk). That's leverage. If and only if it is meant to be.
Good luck (to the seller - you don't need it, there's too much growing inventory).
***Bid half off peak comps***
Posted by: Brownstones Half Off at April 26, 2009 12:24 AM
Holdup. I just re-read your post.
"The broker then comes back and says the seller’s have agreed to tell us the accepted offer, if we pay $xxx (less than 1%) over the accepted offer they will consider."
Bull hickey. The contract is out and they're trying to get higher bids? Especially in NYC where it is pretty standard to sink a few grand into a property before you sign (engineer and lawyer) that is some bad faith.
We had a situation where the broker asked the seller's lawyer to prepare a new contract while we were negotiating our contract (details about the fire escape and an existing tenant that we'd verbally agreed on but that weren't in the first version of the contract). The seller was pretty upset because 1) she hadn't agreed to any new contract and 2) she thought that was pretty unethical. They had actually cut off communication with the broker because they felt she was out of bounds.
It is not inconcievable that the broker, not the seller, is the shady party here.
I would definitely hold my ground. There've been some discussions here about written offers, which the broker is legally obligated (as I understand it; I am not a lawyer) to relay. So consider saying "no, our offer stands, and we'd like to put it in writing."
Posted by: serpentor at April 26, 2009 10:35 AM
As I read it.. the seller hired a broker to get the HIGHEST offer.. legally of course. It is perfectly legal to sell to the highest or best bidder. That is EXACTLY what the seller is paying for.
Also, the buyer called the broker a few months after they first saw the property. They are indicating SOME level of interest... the broker told his client, and the seller is fishing for a higher offer. HELLO??? what is wrong here>>>????? NOTHING.
Poster, either make the higher offer, or stop wasting everyone's time. Jeez... if you like the property, GO FOR IT... BUYERS change their minds all the time, the seller has the same rights. There could be a hundred reasons why the deal isnt executed yet,,, could be the seller OR the buyer delaying... but why is the SELLER and/or BROKER being villified???
Posted by: howrealnyc at April 26, 2009 3:10 PM
The seller/broker have clearly indicated that they have no ethical problem with backing out of a good faith agreement. It's sad and telling that these folks would abandon their morals for a lousy 1%.
The possibility also exists that the first bidder may counter your offer with a higher number - after all, it's only 1% more. Then what would you do?
Your initial decision to pass would indicate that you felt the property was un-extraordinary, has something been revealed that has changed your mind?
Posted by: awatcher at April 27, 2009 1:44 PM
Post a comment
Please be patient while your comment is published. It may take a moment.