| Author | Message | ||
     Bjp Citizen Username: Bjp Post Number: 66 Registered: 10-2002 |
I can understand the various frustrations here, but all the theories about realtor manipulation cannot be supported by any economic theory. Jeb's right: people pay what they think goods are worth. Period. If they're so emotional that they abandon price rationale, then they'll suffer when it comes time to sell. But this real estate market isn't the Nasdaq bubble--that was prospecting; in the real estate market there are plenty other sales to compare for price. If someone pays $100K more than the guy next door did last month for an equal house, that someone has made a bad investment. | ||
| Bjp Citizen Username: Bjp Post Number: 67 Registered: 10-2002 |
Also, no realtor "forces" anyone to pay any price. | ||
| AZ Citizen Username: Azaltsman Post Number: 76 Registered: 1-2003 |
1-2many/Jab: This is the central problem. I can see if they tell you $430K is the highest bid..can you beat it? But they don't even tell you that. What do you do, just say I'll pay $50K over list? It's ridiculous. The realtors just pump it up and no one can prove it. Lseltzer - How else can you explain houses selling $100K (in some cases $200K) over listing price in Montclair? There is no way, in no economy, that people just say Ok, you're asking $450. I'll give you $550K. The Realtors low ball from the beginning to create bidding wars. The problem I'm solving is that Realtors get rich while the anyone with the hopes of being able to afford a house in a decent area is locked out of the market. Then the same seller goes and buys a house and gets less for the money that was made because of an inflated market. There is no time in the last 20 years that the prices of real estate have gone up so high so fast. I doubt that the legitimate "market" is making it happen. The same thing happens in Maplewood and in any other highly desirable area. Not sure about right now but there were bidding wars on houses in good condition in the best area until January in Maplewood and Montclair. Millburn wasn't that bad but you get considerably less for your money, of course you pay about 1/2 the taxes. RT 78/Millburn Ave noise is not exactly a selling point either. | ||
| AZ Citizen Username: Azaltsman Post Number: 77 Registered: 1-2003 |
BJP, Unfortunately, you're incorrect. If you look at all the houses sold in Upper Montclair, Maplewood, Summit, and Millburn last summer people had lost their minds..especially in Montclair. But I cannot believe that they did it on their own without the "help" of Realtors. There is no way, no way that you just come up with such extreme premiums to buy a house. Most home buyers are not "experts" and only heed the advise of the Realtors. How can a person not involved in the real estate field make an educated bid on a house? Yes there are comps..but if the comps in the neighborhood are say $450K and you have people offering $550K with no evidence that can support such a surge then the comps are worthless. I've had brokers tell me straight out that the listing prices are only "suggested" prices. How the hell can you buy a house like that? So now the person that can afford a house for $450K thinks they can pay a little more, say $475K, then find out that they didn't get the house and later find out it sold for $550K...it's a waste of time and effort. After putting in numerous bids on houses OVER the asking price and STILL losing was extremely frustrating. | ||
| lseltzer Citizen Username: Lseltzer Post Number: 1407 Registered: 5-2001 |
AZ - THere's a basic point here that everyone seems to get except you: If someone's willing to pay a particular price, even $100K over listing price, that's what it's worth. By definition. Sales tactics are irrelevant. In the case of the house across the street from me (discussed at length above) I know the owner thought he wouldn't get the asking price, but he'd get something close to it. Within a week there were 6 offers and people bidding up. Let's assume that the realtor knew it would go for more than the listing price. Why would they list at the price they listed at? Perhaps it brings in people who would be discouraged by a higher listing price. Perhaps more interest in the house creates more competition for it generally, raising the price. Still seems perfectly fair to me. And you still haven't said that you actually know that there are realtors lying about bid prices that have been made. It sounds to me as if you're hanging your whole argument on the theory that this could be happening. Since it's a difficult theory to prove I don't see much there there. | ||
| sac Citizen Username: Sac Post Number: 733 Registered: 5-2001 |
I've never bought a house in this kind of market (fortunately!), but I am astounded that there isn't some regulation regarding knowing what prices have been bid?? Certainly, it is fair for the highest bidder to get the house, and for the price to go as high as willing bidders are willing to bid, but it is also fair to know what has been bid by the competition. (As in an auction.) Why isn't there some mechanism that would cause this to be disclosed? | ||
| AZ Citizen Username: Azaltsman Post Number: 78 Registered: 1-2003 |
Lseltzer - All I'm saying is that if the bids are disclosed it would eliminate the possibility of manipulation. Disclosure of all bids is the only way to have an acurate market. That's the bottom line. Though I don't have a smoking gun I can tell you from experience that it's hard to believe that the Realtors don't manipulate the bidding process. Put it this way, there is nothing to stop them from doing it. There may be laws but practically they are unenforceable. The fact that a higher price on the house would discourage people from coming to see it is correct. People should know what they can and cannot afford. It's a different situation when you're involved in a bidding war thinking you will get the house for a little more when in reality you end up bidding beyond expectation. And I'm talking about listing at 10-15% below the comps (the "market" value) not 5 or 10K. | ||
| househunting Citizen Username: Househunting Post Number: 17 Registered: 2-2003 |
Regarding the house across the street from lseltzer which I bid on, let me give you a little background from my end. My realtor called me about the listing the day it came out and my husband and I rushed out to see it the next day. It was listed at $385K and we offered the asking price. Later, we found out there was another bid (also at the asking price) and that they were going to wait until Sunday for the open house to see what other bids they got (this was Wednesday I think). Meanwhile, I did some research on domania.com and found out that the house sold 2 1/2 years ago for 319K. I did a home value check on domania and it said the house should be now worth $440K because homes in the area had appreciated 38% since 2000. I asked my realtor why the listing price was so low and she just kind of shrugged. Anyway, on Sunday I was told there were 7 bids on the house and we had an opportunity to up our bid. Since our high limit is $400K we could only bid 405K, which is still 20K over the asking price. In the end, we lost the bid. My question is didn't the listing agent know it was worth 440K? And if so, why not list it at that? | ||
| Ed May Citizen Username: Edmay Post Number: 1280 Registered: 9-2001  |
Subj: NYTimes.com Article: Upsides, Downsides and Squirrels Date: 3/30/03 8:30:23 PM Eastern Standard Time From: michaela@brandeis.edu To: edwin10105@aol.com Sent from the Internet (Details) This article from NYTimes.com has been sent to you by michaela@brandeis.edu. Ran into this ... M michaela@brandeis.edu Upsides, Downsides and Squirrels March 30, 2003 By TINA KELLEY WAS it a retreat or an advance? Was it a cause for pride, or for squirming discomfort? Was I finally and officially cashing in my few remaining coolness chips? Or would our friends share our vision of springtime family sleepovers featuring bathrobes, pancakes on the patio, blooming tulips and birds at the feeder, in our new town, the mere name of which evokes images of a blazing fireplace and piles of our very own leaves to rake: Maplewood. N.J. The burbs. My husband and I decided to try living outside the box of our 732-square-foot apartment in Park Slope, Brooklyn, which for three years had contained, with some effort, his home office, a persnickety cat, a growing baby and a 75-pound Labrador retriever (Addie) weary of the fourth-floor walk-up. We had our list of things we hated about the city. The checkout chicks at Key Food who were so hostile that when one of them scanned our yogurt a bit too resentfully, it actually exploded. Street-cleaning regulations that left us with both tickets and dirty streets. Four car break-ins in four months. Subway stations with light bulbs black with grime. And the obscene amount of time it took to drive as far as Newark International Airport when trying to get anywhere scenic for the weekend. One of the hardest goodbyes was to Coco, age 2, our daughter Kate's best friend. Those two had invented their own game, "Mango Dude," which involved jumping up and down on the sofa and saying "Mango Dude" over and over. They played "If you're happy and you know it, fall on your bottom" together, and they ate hard-boiled eggs. Kate took the whites, Coco the yolks. Kate came home from her last visit with a heart-shaped frame surrounding Coco's smiling face. "Where's my friend?" Kate used to ask first thing in the morning. They have still been able to visit once a week - so far so good. We hope to keep the friendship going. Two months in, we can already see a few upsides and downsides of the move. Upsides: They recycle everything in the suburbs! During two separate storms we caught our new neighbor snow-blowing our driveway while we were still in pajamas. Our first visit to the grocery store (wide aisles! smiling checkers!) was a veritable spa treatment. Kate can look out a window and see not walls but trees, and more squirrels than live in Prospect Park. At night, when I come home from work, I can see stars, whole constellations, even. But there are worries we didn't have in Brooklyn: Chimney fires. Backing out of the driveway over a small person. Intruders. A tedious commute by car into the city. And soon, property taxes. Addie, however, is overjoyed. More squirrels, fewer stairs. A no-brainer, as far as she's concerned. http://www.nytimes.com/2003/03/30/nyregion/30LEAV.html?ex=1050073852&ei=1&en=a6f 1ab39a2b650ff HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2003 The New York Times Company Ed May | ||
| deborahg Citizen Username: Deborahg Post Number: 527 Registered: 5-2001  |
I agree with AZ that bids should absolutely be DISCLOSED. Even if realtors don't lie--and I see no evidence that they do--they are at best, giving the buyer THEIR best guess as advice. An example that actually happened: 1. A house goes into contract, then the contract falls through and it returns to the market. 2. Realtor knows that a certain couple LOVE this house and were very upset when they lost it the first time. She advises them to bid well over the asking price to forestall a bidding war and get the house. 3. Couple bid $25K over asking, get house right away. They are ecstatic. 4. Later it turns out that the house had languished ont he market before going into contract the first time; and there were no other bidders when this couple bid their $25K over asking. Now--the realtor didn't do anything illegal. This may even have been her best advice (of course, it also made her a bunch more money). But the couple paid $25K over asking when there weren't any other bids! Had they known this, and had the bids been public, they probably could have saved the money. When we bought our house, we bid asking but were told by the owners--who we knew--that there was one other bid for slightly more. Because they had met us and liked us, and had verbally told us the house was ours, we were given the opportunity to match the higher bid. We did, and got the house. Happy ending--but only because we spoke directly with the owners (probably against every realtor's rule) and got the straight story. | ||
| shoshannah Citizen Username: Shoshannah Post Number: 100 Registered: 7-2002 |
What about agents' incentive to sell to their own buyers? That's the shadiest part, IMHO. If you are using a Burgdorf agent, how much chance do you think you have of getting a house listed by Weichert? Listing brokers work hard to ensure that their own buyers get the house so that the agent doesn't have to split the commission. | ||
| Bjp Citizen Username: Bjp Post Number: 68 Registered: 10-2002 |
AZ--nothing I wrote was incorrect. Perhaps people had "lost their minds" in Montclair. Still, those looney-binners had the money, and they spent it. And I'll bet they could sell the houses right now for more than they paid, which would indicate that they were in command of their faculties. The trouble in Montclair is that valuing properties was difficult for a while--fast inflation, especially when brought on by a fundamental change in the market (midtown direct train service), is hard to keep up with. | ||
| Bjp Citizen Username: Bjp Post Number: 69 Registered: 10-2002 |
So, Shoshannah, you think agents make their own potential buyers pay more just to keep away people represented by other companies' agents? That makes no sense. This is an interesting discussion. It's a rare market (not just real estate, of any kind) where sellers (and their agents) have to fend off potential buyers. Most real estate agents in the US have to work like crazy to sell a house, and that's the way it should work. Eventually, prices rationalize, demand meets supply and bidding wars stop. I suspect that will happen with the first significant upward move in mortgage rates. | ||
| shoshannah Citizen Username: Shoshannah Post Number: 102 Registered: 7-2002 |
They don't "make them pay more." Even if the seller gets a little less money, the agent makes out better if she sells to her own buyer. Also, sellers can make an agreement with the agent to pay a little less commission if the buyer comes from the listing agent. There is total economic incentive for a listing agent to sell to her own b uyer. It would be hard to believe that there is no manipulation going on to make this happen. Bottom line is, if I were looking for a house, I would want to work with the agency that has the most listings. | ||
| AZ Citizen Username: Azaltsman Post Number: 79 Registered: 1-2003 |
Househunting - I know what you're going through. I say disregard the realtors and the next time you want a house go there specifically when the owners are home. For example, on a weekday tell your agent that you can only go there after 7:00 PM. I think 7:30 PM is the latest they'll show houses anyway. Get in there and talk to the seller. Get as much info as possible and build a rapport. deborahg - Great story. Same thing happened to us. Except we bid $10K under asking then wound up bidding $6K over asking. And we met the owner and I think that meeting her definitely made an impact on us getting the deal. It just so happened that we saw the house for the first time on a weekday and the lady was home after work. We still talk to her after we closed on the house. It really did help to put the face to the paper. Shoshanah - I think, but am not sure, the practice of not having to split the comission was outlawed and that specifically Weichert were the last to get rid of that practice. From what I understand the seller's agent gets the same commission whether the agent sells it "in house" or through a buyer's agent. Bjp - I'm all for letting people spend as much money as they want. But if there was full disclosure then it would ensure that the bidders know the real market. What's to stop a realtor from jacking up the price? As far as I'm concerned there is no one that would stand up and say "I want to waste my money and bid as high as I can". | ||
| AZ Citizen Username: Azaltsman Post Number: 80 Registered: 1-2003 |
Bjp - I doubt Realtors have to work very hard to sell a good house these days. The MLS system does all the work in selling the house for them. Once it's in the MLS system that is the key to the kingdon. Realtors DO a lot of work after the offer and I give them credit for it. However, don't make it seem like it's so hard to sell a house in a good location these days. | ||
| smithford Citizen Username: Smithford Post Number: 83 Registered: 2-2002 |
Shoshannah- Our buyers' agent at Burgdorff, Robert Northfield, showed us houses listed by both Burgdorff and others. We bid on a house offered by Weichert, but were outbid (we bid below ask). The contract then fell through. We reaffirmed our old bid (still below ask), and got it. There never seemed to be an issue about the 2 different RE companies involved. | ||
| jeb Citizen Username: Jeb Post Number: 70 Registered: 9-2001 |
I can't wait for all you buyers to become sellers. Scenerio : You The asking price is 600K. [Of course, you paid 450K for the house.] YOUR FRONT LAWN. Agent ( addressing you ). I have a buyer for you at your asking price. Agent phone rings. Agent ( on phone ) There is a bid pending. (pause) How badly do you want the house? Oh, you love it? Well, if you love it that much I'd suggest offering 25K over the asking. (pause) Great. I'll tell the seller right away. Agent hangs up phone, happily smiling. Agent You now have a bid for 25K over asking. You Call that person back. Tell him the price is 601K. Agent I thought you had children to send to college. You I do, but buyers deserve a "fair chance." Agent }???? | ||
| jeb Citizen Username: Jeb Post Number: 71 Registered: 9-2001 |
I can't wait for all you buyers to become sellers. Scenerio : You The asking price is 600K. [Of course, you paid 450K for the house.] YOUR FRONT LAWN. Agent ( addressing you ). I have a buyer for you at your asking price. Agent phone rings. Agent ( on phone ) There is a bid pending. (pause) How badly do you want the house? Oh, you love it? Well, if you love it that much I'd suggest offering 25K over the asking. (pause) Great. I'll tell the seller right away. Agent hangs up phone, happily smiling. Agent You now have a bid for 25K over asking. You Call that person back. Tell him the price is 601K. Agent I thought you had children to send to college. You I do, but buyers deserve a "fair chance." | ||
| deborahg Citizen Username: Deborahg Post Number: 528 Registered: 5-2001 |
Jeb -- LOL! I have been on both sides of this fence and do see your point. But what do you say to the idea of disclosing bids? I still think this should be the LAW! |
