Bidding on apt- is this seller fishy?

dwell: about 14 months ago

"Corcoran represents you, the seller, on Corcoran’s exclusives. If another agent of Corcoran represents the buyer, you agree that Corcoran will be dual agent with designated agents representing you, the seller, and the buyer. Corcoran represents the buyer when showing the exclusives of other real estate firms. Pursuant to section 443 of Article 12 of the New York Real Property Law, the undersigned consents to dual agency should that situation arise. Please initial here"

Sounds like it may be illegal: How can a Seller waive the Buyer's rights when the Buyer was never a party to the contract? Answer: They can't. And, then they sneak that "Pursuant to section 443 of Article 12" in to make it seem legit. I am not litigious, but sounds like a good lawsuit to me & would probably force the entire residential brokerage industry to revise their contracts & make them fairer. I assume all the brokerage companies have the same language in their Brokerage Agreements. It really is outrageous.

front_porch: about 14 months ago

Sure, I'd like to, Village, because (semi-sarcastic) I'd enjoy never working again.

However, if you search these boards, you'll find repeated mentions of one or two buildings that posters speculate are drawing a line in the sand on price.

I personally think it doesn't always work to a building's advantage to be known as a fortress; I'm not sure it's always the way to maximize both value and liquidity for current shareholders.

Perhaps the kindest metaphor for the co-op system is the private school admissions process that so many NYC parents have just gone through. There is a general hierarchy of top-tier, second-tier, and third-tier schools, but within that framework admissions chances change season to season.

ali r.
DG Neary Realty

crescent22: about 14 months ago

Some random comments.

1) Listing agent hasn't done anything unethical, based on what you have described. If they want to hold you up, they can try. It's up to you to see through it and adjust accordingly. Or the listing agent is dealing with a waffling owner/seller.

2) Your broker does not seem to be able to discern why the other side will not engage or give you alternative negotiating actions or alternative apartments- this is embarrassing.

3) The price of the 1-bed will not affect the perception on the right price for the 2-bed or 3-bed in the same building.

4) 1150 s.f. looks like a gross misrepresentation.

I am with everyone else- time to move on - you may never know why they will not engage - it may not have anything to do with you- the seller might be intransigent to get the ask after dropping the price once already.

bertie13: about 14 months ago

Then why don't they just list the asking price higher? Or inform serious potential buyers of the situation - that they won't pass the board approval unless the bid is X amount or whatever. My frustration with this has mostly been the total communication shut down from the other side. I can work with facts, even hard and unpleasant facts, like knowing that a board won't take someone who didn't go to an Ivy League or whatever.

Village: about 14 months ago

Ali - can you name specific buildings/boards that have done this?

front_porch: about 14 months ago

bertie,

a situation like you mentioned -- and I'm not addressing this building or this agent specifically, I'm speaking in general -- is more likely to be board-driven. A board will make it known that they have a floor of $XX for a particular sale, and they don't really want to be presented with situations below $XX.

I know that doesn't help your specific bid, but maybe it makes circumstances a little more understandable?

ali r.
DG Neary Realty

bertie13: about 14 months ago

I did a little more digging and have another question - has anyone heard of situations where an agent selling several units in a building will deliberately kill a sale on a small low-priced unit so it doesn't drive down the average cost-per-square foot or otherwise hurt the chances of scoring big on the other high end units in the building? I'm starting to think this was the bigger picture here, as this building (311 W 83rd St) has a both a 3-bedroom and a 2-bedroom PH for sale which can also be combined. They have also been on the market for ages, and there is a "price chopper" discussion on them as being overpriced. Same selling agent. Plus we were never called back with a chance to up our bid after either the public (or private) open houses in the past week. Maybe I'm in conspiracy theory land, but seems reasonable to me. I'm moving on to hopefully less unethical situations - the whole place has seriously bad juju now.

fsbo88: about 14 months ago

bertie13, you don't have to sign anything to be sucked into a dual agency situation... the boilerplate that Corcoran uses for their sellers:

>> Corcoran represents you, the seller, on Corcoran’s exclusives. If another agent of Corcoran represents the buyer, you agree that Corcoran will be dual agent with designated agents representing you, the seller, and the buyer. Corcoran represents the buyer when showing the exclusives of other real estate firms. Pursuant to section 443 of Article 12 of the New York Real Property Law, the undersigned consents to dual agency should that situation arise. Please initial here (owner’s initials).

SO - if the SELLER signed this, you are in a dual agency situation, if you are "represented" by an agent from the same firm as the listing.

Most sellers do not run the exclusive listing agreement by their lawyer -- although they should. And this paragraph should be CROSSED OUT.

I'm surprised this is not an issue on more transactions.

Truth: about 14 months ago

Springtime in Paree. Not better than summer in Barcelona as you know, dwell.

dwell: about 14 months ago

Amending my above statement re: "Dual Agency": my strategy deals more with the issue of cutting down the # of brokers involved in a sale & thereby may eliminate fiduciary conflicts in case the same firm represents both buyer & seller. The best way to avoid "Dual Agency" is to cross it out of the brokerage agreement. This is why it's best to have an experienced RE attorney when you are seriously looking to buy because buyers should not sign brokerage agreements until after their lawyer has reviewed it & a good lawyer will cross that out.

hey Truth: love the thing about blowing $10k in Paris, allons-y!

dwell: about 14 months ago

thanks Truth.

Truth: about 14 months ago

Well said, dwell.

Truth: about 14 months ago

It's o.k. to do that, NYCmodern. Either it works or it doesn't.
bertie: just start looking again. If it makes you feel better you can write a letter to complain.
Better to save your energy for looking.
There are other apts that deserve your love.

dwell: about 14 months ago

fsbo88,
Great point about "Dual Agency". To overcome the Dual Agency issue, how about this? Never let a broker show you an apt that you did not originally ask to see. You use SE to find apts, see those apts and if the broker offers to show you other apts, just refuse. This way, you don't establish a relationship with the broker (so no commission issues) & you are only dealing with one brokerage company at a time.

Also, a broker is not an advocate for the buyer (unless it's a dedicated buyer's broker). IMO, before you're ready to buy, find a good & experienced RE attorney who can advise you re: making an offer/counter offer. A good RE attorney can advise a buyer if a seller is shopping around an offer and playing games.

Also, if "Location x3" is the 1st rule of RE, the 2nd rule is "never fall in love with a property".

bertie, this is a learning experience. Next time, you'll be on the look out for this kind of thing. This apt was not meant to be & you probably dodged a bullet.

Finding "more ethical brokers" can be like a needle in a haystack. Imo, if you want an advocate solely dedicated to your best interests, get an experienced RE attorney &/or a dedicated buyer's broker or both.

NYCmodern: about 14 months ago

When I made the offer on my current apartment, I stated it was only good for 48 hours and I heard back right away. I learned my lesson since the last place i tried to buy the seller waited a full week to respond to my offer after gathering other offers. It was the most excruciating week of my life and I was not willing to do it again.

bertie13: about 14 months ago

I didn't sign any dual agency agreement with anyone. I had seen the apartment at an open house early on when just starting to browse, before i had started working with my agent. It had no open houses/price changes for a long time and I kind of forgot about it- assumed it was gone. Then suddenly new open houses every weekend when we were ready to buy. Does this rise to reporting either agent to the ethics board? What repercussions does that have for them (or me)?

bertie13: about 14 months ago

I will post once I decide for sure I'm done with it - also suspect this was done to last potential buyer as was told story that they had offer in Jan but buyer stalled on them with their lawyer in contract for over a month and then walked - somehow this was supposed to be reason why buyer was now skittish and demanded special non-contingency mortgage agreement (which we agreed to, first chump move). Now I suspect that was either all a lie or another attempt at a "stalk horse" game. Getting wiser fast. Also thinking of contacting head of both brokers' agency (corcoran) to let him know he just lost our business over this foolishness. Any recommendations for more ethical brokers who also know how to deal with this stuff?

ilinc: about 14 months ago

bertie13 - Why not post the apartment in question, and the brokers that wasted your time. Its only fair.

drdrd: about 14 months ago

I'm sorry you're having a hard time with this. I advise you to start looking furiously for something else that you like so that, should these azsholes come back to you, you can string THEM along while you await the closing on the other, better place. Good luck & know that the right perfect place is waiting for you!

dc10023: about 14 months ago

Whether to walk or not, use the information to your advantage. The seller is still shopping around and still not getting another/better offer. So perhaps your offer is too high. Longer it sits there, more evidence the seller ask is too high.

fsbo88: about 14 months ago

I posted this before, but it deserves another look:

http://www.dos.ny.gov/cnsl/dualagcy.html

>> Significantly, by consenting to dual agency, you are giving up your right to have your agent be loyal to you, since your agent is now also representing your adversary. Once you give up that duty of loyalty, the agent can advance interests adverse to yours. For example, once you agree to dual agency, you may need to be careful about what you say to your agent because, although your agent still cannot breach any confidences, your agent may not use the information you give him or her in a way that advances your interests.

>> As a principal in a real estate transaction, you should always know that you have the right to be represented by an agent who is loyal only to you throughout the entire transaction. Your agent's fiduciary duties to you need never be compromised.

huntersburg: about 14 months ago

>now, if they come crawling back to you, make sure you offer less money

What if they come back, but not on their knees?

gcondo: about 14 months ago

now, if they come crawling back to you, make sure you offer less money

fsbo88: about 14 months ago

>> agreed before beginning negotiations that if the seller insisted on list price, we thought it was fairly priced and would concede

Who convinced you it was "fairly priced" ? The ONLY "fair" price is the "market price".

Your apartment was "fairly priced" 5 years ago 20% higher than it is now.

If I had a dollar for each time a broker told me "it's priced right..." I would retire. The ONLY fair price is the MARKET PRICE. I am a freaking broken record because so few people truly understand this. THERE IS NO FAIR PRICE. ONLY THE MARKET PRICE.

I think you need a new broker, who is on your team, and your team ONLY.

huntersburg: about 14 months ago

If you can make a disaffected bid, as Steve Roth or apt23 suggest, you are ahead of the game and congratulations.

Most buyers do fall in love, and that's why they bid. It doesn't mean they can't fall in love, but this is the apartment where they start imagining their family, their furniture, their inherited china, the pictures go here, etc. The building seems nice, I like how far it is from X, the view X, we could entertain here for Christmas, etc.

Sellers have their own emotional attachment, and selling to a jerk can be tough to swallow. If the RE market is awful, if they've failed to sell for 90 days, etc. they'll become more sober.

fsbo88: about 14 months ago

bertie13: do you HAVE to buy this week? If the apartment you want doesn't sell in another few weeks, YOUR next offer (which is gonna be minus-5% could be their only offer.

Now, time to piss the brokers off...

Dual Agency. Most listing agreements have a paragraph discussing what happens when buyer and seller are represented by the same firm. THERE IS NO SUCH THING as "Dual Agency" -- well, it's in the contract and the NY State Disclosure that all sellers are given, but when asked, the licensed broker can't honestly tell you that they are totally on your team, if you (as buyer) are bidding on a property also listed by the same firm. Most contracts want "Dual Agency" - but that's bullshit, there is no way a buyer (or seller) will adequately be represented by Dual Agency.

read:
http://www.dos.ny.gov/forms/licensing/1736-a.pdf
and
http://www.dos.ny.gov/cnsl/dualagcy.html

The problem here is that the seller's broker (as well as yours since it's a cobroke) will get 6% of the transaction -- let's say you are buying a $1,000,000 apt. And let's say your offer is minus-1%. That's $10,000. TOTAL commission on $10k is $600. Split 4 ways. WHY would anyone go to the mat for you for ~$150? YOUR broker is not your advocate in this situation. And legally, since the same office is dual agents, you don't have a true fiduciary advocate.

Count the number of times I've said, "the system is broken".

Sellers have a right to representation. SO do buyers. But WHO is paying the buyer's broker? Ah... so who does the buyer's broker truly work for?

If you truly want this apartment, use a dedicated buyer's broker, not from the same firm as the seller's broker, and try again. This time, bid "market price" -- which probably has nothing to do with the asking price. Good luck!

bertie13: about 14 months ago

As many of you predicted, the 24-hrs passed so our offer is now expired. In the last day our broker had his director contact the other (seller's) broker's director as they all work for the SAME COMPANY! Presumably this was to finger wag. I also saw that the seller's broker scheduled a private open house from scanning the "recent broker activity" on this site. The thing about this that is so painful and crazy is that we were willing (before this happened) to pay a good deal more for the apt and had agreed before beginning negotiations that if the seller insisted on list price, we thought it was fairly priced and would concede. We even had agreed to go over list if another buyer was interested and had decided on our top price. But instead we were used and discarded. Thankfully my husband never loved this place like I did - and I know I can be happy elsewhere, I've been happy in E Village tub-in-kitchen walk-ups, Washington Heights crumbling deco, UWS converted hotel/jr 1-bedroom...

Village: about 14 months ago

Rescind the offer - tell them that you'll keep looking at other apartments to buy - after all they are looking for other buyers, why should you not look for other sellers? Tell them to come back to you when they are serious and you may or may not still be interested. WTF is wrong with your own broker that he/she was allowing this BS?

apt23: about 14 months ago

Believe it INO!!! Roth is clearly stalking you. What do you think Roth would bid on the apt -- 749 days on market and 4 different brokers. Slow bleed
http://streeteasy.com/nyc/sale/550259-condo-635-west-42nd-street-clinton-new-york

inonada: about 14 months ago

Hey, that's my apt-renting strategy apt23. That Roth character is trolling around on these boards and stealing my super-secret strategies.

inonada: about 14 months ago

If they come back to you after the 24 hours, drop your offer by 1% and tell them they have 12 hours to respond.

If they come back to you before, remember to bring up their unsuccessful open house fishing expedition during negotiations of any point. Tell them that they obviously couldn't even muster even the slightest interest to delay you any further.

cjones75: about 14 months ago

Seems that this seller is not ready to sell their apartment. Move on.

apt23: about 14 months ago

I was at an investor conference recently where Steve Roth from Vornado Realty was a featured speaker. He made this recommendation for buying RE in NYC. He said to choose 5 different apartments and make sure you do not love one more than another. Then make low offers on all 5 apartments and the one that responds -- that is your apartment.

You are being played by this seller. Move on. Go find four more appropriate apartments. Only when you give up on this apartment, will you be able to negotiate without emotion and avoid overspending. You will only give up on this apt when you have four others as backup.

front_porch: about 14 months ago

I'm with just about everybody else here -- seller used you as a stalking horse to try and generate a better offer. If seller did, you don't have a deal; if seller didn't, seller has approximately 90 minutes to pick up the phone and start grovelling.

But when people behave like this, it's tough to get them to change. Look for a "Plan B" apartment during the two-and-a-half weeks it's going to take you to go into contract while seller drags his/her feet.

ali r.
DG Neary Realty

jim_hones10: about 14 months ago

fsbo88
about 15 hours ago
ignore this person
report abuse PS -- if they countered and you are at ask-minus-2%, make the time-bombed offer ask-minus-3% just to make a point, and then be prepared to walk. YOUR opportunity costs are worth something. By keeping you emotionally in the game, you are not open to other possibilities.

PPS -- keep shopping once your offer is accepted -- until contracts are SIGNED there is no deal. As someone who has had contracts rescinded as a buyer and a seller, experience will tell you to never stop showing or shopping until contract is signed and fully executed.

ditto fsbo.

jim_hones10: about 14 months ago

gcondo
about 20 hours ago
ignore this person
report abuse and if the seller calls back in 7 - 14 days, I would lower my offer. please

gcondo. telephone tough guy. what a joke.

sonnynyc: about 14 months ago

have one of your buddies go to the open house and throw the broker out the window, the street should break their fall, but it will cause a stir and then you can bid lower (with a time limit on the offer of course...)

fsbo88: about 14 months ago

PS -- if they countered and you are at ask-minus-2%, make the time-bombed offer ask-minus-3% just to make a point, and then be prepared to walk. YOUR opportunity costs are worth something. By keeping you emotionally in the game, you are not open to other possibilities.

drdrd: about 14 months ago

It's been 4 days? I'd give them 12 hours. F 'em!

fsbo88: about 14 months ago

IN THIS MARKET... the buyer absolutely should time-bomb an offer. If your "broker" will not do it, use a different broker.
If the seller walks, then it wasn't meant to be. You do not want to get in bed with a seller like this.

I time bomb EVERYTHING as a buyer. IF the seller calls back next week, your offer just went down 2%. There is no room for this kind of BS by sellers in this market. Teach them a lesson.

But I'll bet that the seller isn't that smart, and his trusted servant/broker is just as inexperienced as he is.

Thee are other really great apartments for less $. Maybe it's time to move on?

>> agent to forward to the seller's broker that our offer will expire in 24 hours

24 hours? That's an eternity. An average lawyer can turn a boilerplate contract out in 30 minutes or less. Then it's on YOU for due diligence. And make the seller pay his parking tickets.