Comps for Home Buyer

all good advice above. We bought without a buyers agent and we were not the highest offer so I do believe the fact that we didn’t bring another RE agent to the table looking for a cut helped the sellers chose us. We had a great sense of the market and bought from a small local person who underpriced the building and made other “mistakes” in selling that worked in our favor as educated buyers. that all was nine years ago and I’m sure things have changed in the meantime, as EJR alluded to. good luck!

slopegirl

in General Discussion 6 years and 9 months ago

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crhorsken | 6 years and 9 months ago

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Anyone ever skipped using a buyer’s agent and purchased on their own? If so, can you explain how you obtained comps for the property to make sure the price was in line with the market ?

Thanks

randolph | 6 years and 9 months ago

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Post the listing and tell us what you’re going to offer and trust me people here will chime in!

crhorsken | 6 years and 9 months ago

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Hahaha
I don’t have an exact address yet, just trying to figure out the best way to tackle it

mozeeatupu | 6 years and 9 months ago

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You can buy comps data from several sites. There not much in terms of free, reliable data

peaceout | 6 years and 9 months ago

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Remember if you go directly to the seller’s agent, that agent has a fiduciary responsibility to the seller, not you the buyer. The agent will act in the seller’s best interest, not yours. As a RE agent, I highly recommend you work with an agent who will not only have your best interest at hand, but will negotiate & guide you thru the maze of home buying. There’s a lot of layers and the process can be very complicated. Buyers who are represented have the best deal – they have a professional agent looking out for their best interest, and of no cost to them/nor a contractual obligation.

resident2 | 6 years and 9 months ago

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“Comps” are typically closed deals; which means that as it normally takes 60-90 days to close from contract to closing, add another 2-3 weeks from accepted offer to signed contract; the “comps” are at least 3 – 4 months out of date.
Working with a buyers agent can only give you help with contract prices within the company that they work with and even that is not always shared among agents in house.
All markets are controlled by supply & demand; where there is a glut on the market you can make a deal. (IE lots of new development condos) but a resale house is a unique commodity, even with “comps” the price disparity is not always obvious as to why.
All you can do as a buyer is look at everything on the market in an area that you are focusing on at any given time. How many houses are on the market? That meet your particular want list? That you can get financing for? etc and finally how long has it been on the market? Not that the last question in my experience holds a lot of weight. Sometimes it is because the seller was not really ready to sell: emotionally, knowing where they are going, family issues, just not the right deal in terms of terms etc…. and often it is because it is listed with the wrong broker who has no clue how to help the seller (I call them messengers).
So the bottom line to gagging what to offer on a particular house, after looking at many houses on the market in the same area. ask your self: do I really want it? can I afford it? is this the best for me on the market right now? Make your offer within a 5-10% range of your best offer. But bare in mind to listen to the listing broker; if they say best & final, then put in your best offer and if you do not get it then you know you did your best & do not have to be one of the many: “I should have, I could have…” but you didn’t get the house, because you did not put in your best offer along with all your paperwork to back it up..
The bottom line is that the sellers agent wants to sell the house, get it in contract with someone that can close on time with the least stress to themselves & their client, the seller. The sellers agent is getting paid no matter who buys it. A buyers agent just wants to get a sale, they only get paid if their buyer gets the house. I have often seen buyers over pay when working with a buyers agent.

southsloppy | 6 years and 9 months ago

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i feel like this is a major issue with the current agency system: sellers agent are incentivized to tilt the scale for offers from buyers who are not represented by an agent. They get the full commission in that case instead of having to split. We didnt’ use a buyer broker for that reason last time around.
re: comps. It helps not to be rushed and watch the market for a while. If you know where you want to live and what sort of house you want to buy, you’ll get a sense of the market within a few months (ie enough time to check out a house for sale and see where it closes in the end). Streeteasy is prob the best resource for comps…

krobertson

in General Discussion 6 years and 9 months ago

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I purchased without a buyers agent. The process was part science part art. I calculated the cap rate (ROI) on the property assuming its was a full rental and based my bid on my desired cap rate, accepting a lower cap rate if I really liked the property. The majority of properties sold for within a .5% band of the cap rate. But as said by others, after looking at 20+ properties you get a feel for where the market is at.

I didn’t like working with buyer brokers for a couple of reasons,
1) They felt like a extra cog in the process, its another person you have to coordinate with. Most competitively priced homes were gone in the first few days or week at most
2) Just about every listing I was shown, I could have found them on Zillow myself.
3) Outside of Manhattan most sellers don’t pay the standard 3%/3% fee, but rather negotiate a smaller fee, meaning the buyer broker may only get 1% or less. Some wouldn’t send me listing for low fee places and several places I found were no buyer brokers at all.
4) In a sellers market, sellers broker can easily sell the p roperty just as fast folks without a buyers broker. Depending on the deal they had, homeowners may get a slice of the fee savings as well.

But with that said, I do find buyer brokers useful if you’re not a DIYer and prefer not to spend you time looking at listings every day. They can be helpful in a bidding war situation, providing advice and insight into the current highest offer. On the very rare occasion, they may know of it listing before it even hit the market.

CarmenR | 6 years and 9 months ago

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We did it. It was not difficult and the agent was essentially incentivized for us to get the deal bc they got more commission. We were in a bidding war with 4 other couples and I’m convinced that we only got it because we used the buyers agent (it was even slightly underpriced.)

helen40

in General Discussion 6 years and 9 months ago

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As often is the case @resident2 hits all the right points.

I would recommend that you take your time and learn the market on your own. Look at lots of homes in the neighborhood, go to every open house you can, speak to other buyers, speak to neighbors; basically, do your legwork.

You will soon get a feel for the market and if an asking price is realistic or aspirational. We had never bought a house before we bought in Brooklyn several years ago and it took us time to get up the nerve to make an offer. We negotiated through the seller’s broker (who was a flat-out liar) and got the house for the price we wanted.

And remember, the seller’s broker does not work for you. They work for the seller. And one last thing, be ready to walk away from any deal that isn’t right for you. There is always another house.

crhorsken | 6 years and 9 months ago

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All great advice! Very appreciative for this thread guys. We are taking your advice and planning nothing but open houses for the next few weeks to get a feel for what our $$ can get us.

EJR | 6 years and 9 months ago

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I used to say forget the major brokerage houses when buying and only work with the small time local players. Depending on what neighborhood you are looking in, however, there may not be any local players left. Also, the smaller guys seems to have gotten better at pricing the market so they’re not as much of a deal.