An agent reached out to me regarding a home that she is going to take to market but wanted to show me before it goes to market (pocket listing). She is going to represent me and the seller (double ending). The location is fantastic, it's south facing next to a greenbelt. However, I'd have to put in another 15% of the asking to make it our dream house for another 15 years.

We want to pay asking, sellers want to have an open house, I don't want to have to deal with multiple offers. How should I handle this?

You can’t both discourage other offers and buy a bargain.

If you make an offer, and nobody else makes an offer, you know you have overpaid.

It sounds like a bidding war is in the works.

One choice is to get the seller to agree to a fixed price, no exposure to the marketplace. Do as much homework as you can, to satisfy yourself about the condition, title, etc. That might be expensive. You have to be very careful with contingencies, as one might trip you up.

The other way is to let other offers come in, and outbid them until one is accepted.

Not a realtor, but doing real estate photography and having a fair amount of interaction with agents and probably a little better understanding than your average buyer or seller here is what stands out to me...

1- Agent "representing" both sides. I would never deal with an agent representing the other side. "A man cannot have two masters" the buyer/seller have completely different interests and there is no way to know which one the agent is taking. I would argue that such agent is always going to represent the seller "more" since they only get paid on the sale. Also such a "double" agent is not having to split the commission which further incentives them to represent the seller more so than the buyer. For these reasons, many states have banned such dual representation acts.

2- It sounds to me seller/agent are trying to have it both ways - get a fast sale, over asking without the attendant hassle and costs of marketing the property accepting and countering offers.


I'd walk away from a shady deal and questionable business practice every time, even if it was my "dream" house. I'd tell the agent to put it on the market and if I am interested I will talk to another agent about it and maybe take a look.

We sold a house with the agent representing both sides. I thought she priced our home fairly; had a client in the wings ready to jump. We did minimal fix-up work. There was another offer, a little higher but with a contingency. The agent did not press us to accept her buyer client's offer. We are quite satisfied.
Jim Allen has us beat in real estate experience by a thousandfold, however.

quote:

Originally posted by 911Boss:
1- Agent "representing" both sides. I would never deal with an agent representing the other side.

My wife and I have a good friend who represented us when we sold our house (she was great) and over drinks one night, we discussed "debatable" agents and she singled out the above.

As an aside, the best way to get a house before others view it is buy with cash and drop all disclosures if competition is certain. Risky move though.

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Originally posted by davetruong:
We want to pay asking, sellers want to have an open house, I don't want to have to deal with multiple offers. How should I handle this?

You wrote a full price offer and the seller's reply was they're not accepting/rejecting/countering it until they've held an open house and/or exposed it to the MLS?

If it's the one you want, increase your offer (if your comfortable with that new price) or wait for them to respond.

I don’t think a broker handling both sides is inherently shady or a poor business practice, but it is best avoided by inexperienced parties who might not be able to take care of their own interests. I myself would try to avoid it with buyers and sellers I didn’t know. Since no marketing is involved, having an experienced lawyer makes sure the documentation is complete and accurate is a priority.

In the transactions I have been in where there were two agents, one “representing” me, I felt like it was a conspiracy to make sure the deal closed rather than representation of sometimes diverging interests.

Are you comfortable in a deal “on your own” or do you need assistance?

quote:

However, I'd have to put in another 15% of the asking to make it our dream house for another 15 years.

Does this mean you are paying 15% more then the asking price? What are the comps for similar houses in the neighborhood?
Unless I've read this wrong, it sounds as the owners want an open house to see what offers will come in. Then at the same time have your more then full price offer already in their pocket.

I'd want a licensed appraisers opinion of value and my own real estate attorney.
People get real excited at auctions and often overpay.
Is this just a nice house of a one of a kind?

I've been a real estate Broker for almost 18 years....if you want the house make an offer now and get the process started. I've listed and sold my own listings many, many times and never had a Buyer or Seller that felt they were taken advantage of in that situation.

edit....my experience is in Missouri only and other states real estate laws may differ.

My wife was a Realtor for a while.

Just make an offer you feel comfortable with. The inside joke is that open houses are just a way for Realtors to get more clients, not to sell the house that is "open." Their benefit tou your fair offer is a quick sale and him getting both sides of the commission vs. risking the market and only getting half.

If you are in a hot market, that changes things. If the Realtor knows they will get a handful of offers over asking, that's just the way it is, but you'll know if you offer asking or a hair over and they tell you to pound sand.

The Realtor getting both sides from you is way more money in his pocket than only getting half the commission on even a much higher price. There is motivation on his side for you to buy it through him.

If your offer was to pay what they're asking and you didn't put any contingencies on the offer, and they didn't accept, yeah, get ready for a bidding war. I've never bought a house under those conditions, and don't think I would be willing to.

We've bought and sold un bunche of houses over the years. I have low regard for a person who refuses to sell something for the price they asked, with no contingencies. Unless they received simultaneous offers and one was for over asking price, it seems chickenshit.

Vickie is an agent for Coldwell Banker and has access to the MLS data. Ask her to look up the comps for that neighborhood to see if the house will actually bring listing price or not.

The listing price is just a number that has been summarily pulled out of the sellers ass. Sometimes it's fair based on the circumstances, sometimes it's overpriced. Not every house is going for above asking price these days... And getting full ask is getting harder.

Also, if you are going to bid 15% above listing, you might as well do it incrementally while bidding against others in the open market. No point in just throwing out 15% before it even lists.

Use zillow.com

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Originally posted by Icabod:

quote:

However, I'd have to put in another 15% of the asking to make it our dream house for another 15 years.

Does this mean you are paying 15% more then the asking price? What are the comps for similar houses in the neighborhood?
Unless I've read this wrong, it sounds as the owners want an open house to see what offers will come in. Then at the same time have your more then full price offer already in their pocket.

It's not, it just means I will be putting money to make it our dream house... Comps will be lower, but nothing on the green belt.

Ah. I misunderstood.

You are anticipating putting in an additional 15% in repairs and upgrades after the purchase.

You just want to know how best to snag the deal, at full asking price, before the seller lists and you get competing offers.

Make the offer with a very short acceptance period such as 24 hours. This will force them to take it OR not. Most open houses attract 98% tire kickers that aren't even in the market for a house...... Whatever you do, I'd make the offer right away for asking price if that's what you want to pay, and get it on the table. I don't think they can counter an asking price offer????

quote:

Originally posted by jimmy123x:
Make the offer with a very short acceptance period such as 24 hours. This will force them to take it OR not. Most open houses attract 98% tire kickers that aren't even in the market for a house...... Whatever you do, I'd make the offer right away for asking price if that's what you want to pay, and get it on the table. I don't think they can counter an asking price offer????

Sure they can. The offer is an offer of certain terms. The seller can reject it, accept it, counteroffer (which is a rejection of the offer) or do nothing, letting any time period, or a reasinable time, expire.

The only ramification of rejecting a full price offer is possibly entitling the listing broker to payment of the commission. This in fact rarely happens, because there are nearly always terms, contingencies, details not exactly synonymous with the listing agreement, but can happen.

quote:

Originally posted by JALLEN:

quote:

Originally posted by jimmy123x:
Make the offer with a very short acceptance period such as 24 hours. This will force them to take it OR not. Most open houses attract 98% tire kickers that aren't even in the market for a house...... Whatever you do, I'd make the offer right away for asking price if that's what you want to pay, and get it on the table. I don't think they can counter an asking price offer????

Sure they can. The offer is an offer of certain terms. The seller can reject it, accept it, counteroffer (which is a rejection of the offer) or do nothing, letting any time period, or a reasinable time, expire.

The only ramification of rejecting a full price offer is possibly entitling the listing broker to payment of the commission. This in fact rarely happens, because there are nearly always terms, contingencies, details not exactly synonymous with the listing agreement, but can happen.

But it's not really an offer, if the seller is asking $300k with terms xyz, and you're willing to give them $300k and agree to their terms xyz, it's accepting their asking price.....I guess it would vary from state to state.....as you well know realty laws vary greatly from state to state.

Personally I would offer the asking price with a 24 hour contract to accept.....that puts the seller in the corner to either take your offer, or if he doesn't he can spin the wheel and see what the next offer may be and who knows how long from now that might be. If the offer is good for a week, a realtor can raise another potential buyer in price by saying "we already have an offer at asking price, if you offer more I'm sure the seller will take your offer over the other one". However, if the agent does not get a better offer at the open house, the agent has a lot more incentive to sell it to the OP because the agent is getting a double commission when 90% of real estate buyers will have their own agent involved. I've found you can get a better price if you want to make a lowball or lower offer by going straight to the listing agent because since they have a double commission to play with, they'll shave some of their commission sometimes to make the deal happen because they have a lot more commission to work with.

For example, if you walk into the Bentley dealership (I know not real estate) and sticker price is $300k, and you tell the salesman, here's a wire for $300k plus taxes/fees fill out the change of ownership, they take the sale.....if you offer less, then they have the right to either take or deny your offer.

However, offering asking price is by no means a low ball offer. I'm not sure where that comment even came from.

quote:

Originally posted by jimmy123x:

quote:

Originally posted by JALLEN:

quote:

Originally posted by jimmy123x:
Make the offer with a very short acceptance period such as 24 hours. This will force them to take it OR not. Most open houses attract 98% tire kickers that aren't even in the market for a house...... Whatever you do, I'd make the offer right away for asking price if that's what you want to pay, and get it on the table. I don't think they can counter an asking price offer????

Sure they can. The offer is an offer of certain terms. The seller can reject it, accept it, counteroffer (which is a rejection of the offer) or do nothing, letting any time period, or a reasinable time, expire.

The only ramification of rejecting a full price offer is possibly entitling the listing broker to payment of the commission. This in fact rarely happens, because there are nearly always terms, contingencies, details not exactly synonymous with the listing agreement, but can happen.

But it's not really an offer, if the seller is asking $300k with terms xyz, and you're willing to give them $300k and agree to their terms xyz, it's accepting their asking price.....I guess it would vary from state to state.....as you well know realty laws vary greatly from state to state.

Don’t quit your day job, Jimbo.

This is another instance of you coming up with ideas, quite novel and imaginative, that have no basis whatsoever in actual reality.

A ordinary broker listing is not construed as an offer empowering another to accept it. As far as I know, this is universally so in real estate transactions. In 40 years of real estate law and 35 years as a licensed real estate broker, involved in thousands of transactions as a buyer, seller, counsel to a buyer or seller, agent for a buyer or seller, lender, counsel to a title insurer, counsel to litigants and court appointed arbitrator, I have never heard of a successful argument, nor a decision otherwise. That doesn’t completely rule out the possibility that someone, somewhere, didn’t think they were doing this, under the Black Swan Rule, but there is no controlling legal authority for that interpretation.

Indeed, MLS rules treat listings as inviting offers which the owner/seller can accept or reject.

Even if it were so, the listing “offer” would have to specify every detail, price, terms, inspection periods, status of title, which escrow and title holder will handle the deal, etc. which, when the buyer “accepted” each and every detail, formed an enforceable contract.

There is another reason in practicality. A contract is formed upon receipt of an acceptance from any other party. A counteroffer is a rejection of an offer. If an owner received a “counteroffer” (not on precisely the identical terms of the “offer”), and wished to make a new offer to that buyer, he would be exposed to having two different “offers” out concurrently, leading to confusion and dispute when both are accepted simultaneously. This can happen as it is when a buyer makes offers on two different properties, but is much easier to manage, as well as far less common.