Seller's Broker Hype?

put in the offer. how can it possibly hurt?

Emotional toll of getting our hopes up? Yup, sounds stupid, but it's already deflating having seen all those people at the open house.

Good point, though, I guess there's really nothing to lose...

nyc10007, put in your offer and don't miss a beat in your search. Very strong probability you will not get the apt but hey ya never know. ya gotta be in it to win it.

Even in the buyers' market, great properties that "speak to you" are extremely hard to come by. If you love it, make an offer.

Put your offer in at 7% below ask and stand firm.

Then when they send you the contract, do a more thorough analysis before signing to be sure you're not overpaying.

NYC10007, I definitely understand how you feel having looked at apartments now for 8 months and counting. One thing that I've learned is that every seller (and their broker) is different and that I can't read or predict any of their minds. It's a big disappointment to see an apartment that you really want and then not get it for some reason. You seem to have a few options: 1) make an offer- but not your final and last offer- just a reasonable bid for the apartment or 2) move on. I would suggest trying the first option since you have nothing to lose. But I wouldn't make as my first offer whatever amount is the absolute highest number that you would bid. Best of luck to you and your wife.

story about an investor who put in extremely lowball offers on a 1000 properties. Just banged out all th offers as fast as he could. Well guess what, 10 were accepted. 2 turned out to be great deals. He didn't even see them just fired off the offers. You just don't know who's on the other side.

is this anecdote a sign of anything?....seems people keep saying this....It almost seems like some buyers aren't reading se.

Put in an offer. It doesn't cost anything and at least you know you gave it your best shot. Friends were involved in the same scenario over the summer. They put in a low offer, got tons of attitude from the listing agent. Two months later the listing agent called back and they did the deal at thieir offer. You never know...

offers don't pan out all the time. and sometimes, particularly in this environment, it can take quite awhile to find out they haven't and why. you'd be surprised at how far down the back-up offer list some properties eventually trade, often due to happenstance, or things you just can't possibly know.

jim, for the umpteenth time, there are ups and downs in every down process.

Hi NYC 10007:

Congratulations on finding something you like! There is a lack of 'good' inventory in some areas and segments of the market which is what is initiating huge responses to 'certain' properties. That being said, you should not be discouraged from putting in an offer if you love the property. Sometimes sellers do not get the offers they expect or a buyer's financing could fall through or they may not be properly qualified to buy a home at a certain price point in the first place. It may or may not work but the price is only one part ( though a large part) of what makes a buyer desirable and you should certainly make a move.

I would make sure your financing is in place, put your best offer in writing and get it directly to the broker. They legally have to present it to the sellers.

I will of course add as an agent it helps in these sort of situations to have an agent pushing for you but regardless, I would still get that offer in and good luck!

is this anecdote a sign of anything?....

story about an investor who put in extremely lowball offers on a 1000 properties. Just banged out all th offers as fast as he could. Well guess what, 10 were accepted. 2 turned out to be great deals. He didn't even see them just fired off the offers. You just don't know who's on the other side.

... typical bear propaganda from SteveF

Thanks everyone, appreciate the feedback, all very helpful. I'll update the thread if it goes anywhere!

jimstreeteasy, I hear you, I read these threads enough to have answered my own question based on other people's experiences, but for some reason once a situation applies directly to you, suddenly emotions get in the way of logic.

Biggest financial transaction of our lives (to date, at least) so always nice to get input from those with direct experience.

Funny, I'm usually in agreement with all the bears on SE, but suddenly I find myself looking for convincing arguments from all the bulls! Guess that's what happens when you actually find a place you really see as home.

Thanks again!

What does make a buyer attractive? Cash and what else?

alanhart, you said, Then when they send you the contract, do a more thorough analysis before signing to be sure you're not overpaying. What can you do about it then?

to the agent above: how much is your pushing worth? if they make an offer that's less than another offer, can you push it through? come on, give these people a break. and the rest of us.

Not sign.

One caveat which I failed to mention: Our broker is telling us that based on her conversation with the seller's broker, she's not sure it's worth putting the offer in now at our proposed price. She suggested we wait and see what happens first, based on the seller's broker suggestion we don't bother...

Our broker's logic is that she thinks the apartment is worth it's asking price and will definitely go for that (and probably more...I know, starting to sound like that "bidding wars" Time's article-My apologies), mostly based on the flood of interested parties. She basically doesn't want us to go down the road and be disappointed. I'm sure, of course, that she also doesn't want to put in the work if she doesn't have much confidence our offer will be accepted.

Again, who knows what could end up happening. I'm leaning towards SteveF's point of "you gotta be in it to win it." And if the price isn't right, the price isn't right...

Columbia County - that's not what I meant. Agents that are looking out for their sellers are screening potential buyers very carefully. A lower cash offer can trump a higher offer - sometimes. If a seller has two buyers with financing and their offers are similair but they feel strongly one buyer can get through the board and the one with the higher offer is dicey they may feel it's better to take the lower offer. I am not asking anyone to use an agent if they don't want to. I was just giving some advice. However, if it comes down to two similair offers, a good agent could present their client in the strongest light to get the best outcome possible.

Put in your offer and trump up your strong points like pre-approved recently(yeah I know, not worth the paper it's printed on), cash you will put down, great credit scores ready to close ASAP,jobs, money in bank after closing etc...

Wont you be bummed out just thinking what could have been? If you love the place go for it!!

I just saw a unit at 45 Christopher (a rare West Village prewar condo) that I thought would be good for a client of mine, and the listing broker told me that it had gone in a five-way bidding war. So yes, the best stuff goes, and you can take the heavy open house traffic on the unit that you like as a sign that it's probably in that class.

But you can't really play your game based on what other people are going to do. If you're going to buy something, you're going to spend an hour filling out a REBNY form anyway, so how much longer does it take you to make an offer, five minutes?

I'm with Alan Hart; if you think ask is justified, bid near enough to ask so that if there's a multi-way battle you get invited in. If you don't want to go up from there, then you don't.

If the listing broker is wrong about being able to get ask, then you're in his/her email, and when the seller decides to soften, then they'll be able to find you to call you.

Another point to make is that OF COURSE you're going to love things you can't afford. What you want to do is to use those as touchstones, and then see what compromises you can make to get to what you can afford that you'll like a whole lot.

As buyers hubby and I lost out at Gramercy House, but it convinced us that prewar elegance, light, and a good neighborhood were important to us, and we ended up getting all those things on the Upper West Side, though without a fireplace.

ali r.
{downtown broker}

"I will of course add as an agent it helps in these sort of situations to have an agent pushing for you"

and this meant what?

1. " A lower cash offer can trump a higher offer - sometimes" except when it doesn"t?
2. " If a seller has two buyers with financing and their offers are similair but they feel strongly one buyer can get through the board and the one with the higher offer is dicey they may feel it's better to take the lower offer." more complete nonsense? who is they are why?
3. "However, if it comes down to two similair offers, a good agent could present their client in the strongest light to get the best outcome possible." put this in english please. what does this mean?

aboutready ....I understand that there are ups and downs in a slide in anything (just go read some bears on the stock market analyzing the recent rally).

But there is a difference between one or two "up" anecdotes, and a mini trend. It's not clear to me if you are saying a) there is a mini-trend but ultimately it is likely to mean nothing, or b) there are a few anecdotes but no serious evidence of market stability, a counter trend, etc. I'm starting to get the impression it is a)...but it will end in tears due to the many problem buildings, and all the other bear factors.

how can you conclude anything from this anecdote. someone has fallen in love with an apartment. we have no idea where it stands relative to comps, we have no idea if this is even for real (forgive me), and if its for real, we have no idea if any of us would agree with how wonderful it is (forgive me again).

we do know that 7 million people or so have lost their jobs and the national estimate is that 25% of people are underwater on their mortgages.

you decide which set of facts is more compelling.

Ok, I know I'm going to get shit for this, but here goes anyway:

How much is you intended offer below the ask? Because it's pretty clear that the ask is at or below the current market based on all this activity. How long are you planning on living in this space? The reason for these questions? (putting on flame retardant suit):

If you think the market is still going to drop significantly, you probably shouldn't be buying unless you are going to hold fairly long term (and even then maybe not). But if you are going to be a long term holder, here's something to think about: the odds are that during the time you own whatever you buy, the drops and increases in value over the years will overshadow the amount of money you will be "saving" by under bidding on the one unit you have found which you like. You are either going to gain or lose a LOT more than the discount. So if you found the ONE apartment you like, you are probably better off snatching it up before someone else does because in the long run, what you might save even if you are successful isn't going to be as meaningful as it may seem today.

I'm going to assume that your offer will be at least within 5% of asking price? Well, if the market falls another 30%, including transaction costs in and out, so you're down 43% instead of 37%. BFD. If you hold long and the market goes up 150%, so you're up 145% instead. BFD. If the market stays flat, you're out the 5%.... but the odds of the market being flat from here when you go to sell are pretty small: odds are it will be either significantly higher or significantly lower, and the 5% in your purchase price will get swallowed up by the gain or loss from market swing.

Another thing: if this is the one apartment you found which you like, and the WORLD is knocking at it's door, guess what? Odds are that this same thing is going to happen EVERY TIME if you continue to look in this market, because whatever you are looking for LOTS OF OTHER PEOPLE are also looking for. So if you miss out on this one, you will also miss out on all of those other one's as well. OR take this as a sign that this is not a market for you to be buying in, and then stop stressing about bidding.... or even looking for that matter, and wait for a market which you do want to buy in. Because you see what the current market is like, and to expect to find the same thing over again and NOT have all the same things happen is somewhat unrealistic.

To illustrate what I'm talking about:

Anyone who bought in 1987, even if they got the steal of a lifetime, was in the shitter in 1992. But then if they still held on till 1997 they were ok, and if they held on till 2007 were doing great. But if another person bought the same place at the same time and "over payed" by 5%? The were still in the shitter in 1992, still ok in 1997 and still great in 2007 (and still today).

____________________

David Goldsmith
DG Neary Realty

CC,,I'm not an idiot. I don't mean this one anecdote. There have been a number of stories sort of along these lines, and that story in the NY times. I think it is probably partly valid, but is likely a blip, but nevertheless, if you're going to be a market "observer", it makes sense to take note of things, and distinguish as I said, a real activity uptick,,,and a mirage that doesn't add up to a purported uptick.

Uptick may be wrong word...not meaning prices going back up,..but demand at current closing levels, ie the units not priced at peak.

I can drop this line of questions...but I dont think it's stupid...sorry

"I'm with Alan Hart; if you think ask is justified, bid near enough to ask so that if there's a multi-way battle you get invited in. If you don't want to go up from there, then you don't."

Here is where I disagree with that way of doing things: It is fairly clear that there are going to be a number of offers on the place from what you see yourself as the interest in it. I said recently on this forum that most of the time I've hear5d a buyer say to me "I don't want to get into a bidding war", the very next action they take is the one most likely to CAUSE a bidding war. As such, I don't think you want to be part of a "pool of potential buyers" all of whom are going to be asked to bid against each other. I think you end up either having the unit go over ask, or at least find someone who will go with the flow to whatever it takes to buy the unit through the death of 1,000 cuts. I think you either make a preemptive, full price, time constrained offer, or you wlak away and know that if this is the kind of property you want, it's not happening "today" (i.e. in the very near term).

____________________

David Goldsmith
DG Neary Realty

What might happen is that there is another offer,not necessarily better than yours, but the buyer has no broker.So-seller's broker does not have to split the 6%.

How did you arrive at 6% below ask? I'm with 30yrs on this one. Either you love it and hit the ask aggressively, or you sit back and see if it sits for a month or two because getting a good price is more important to you. If you were the owner and got a 10%-below offer after the first open house and tons of interest, what would you do? I would think I could easily get full ask as there is plenty of interest, and your bid is yet another confirmation of that.

On having seen two dozen places over a few months, unless your search criteria is very narrow, you should be hitting the pavement harder. Heck, it takes me more places just to _maybe_ decide on a new place to lease. That's no joke.

Never listen to the brokers, they are your best friend today & gone tomorrow.
Do your due diligence on the price as to what other units have sold for in the building for the past 12 months and based your price on that.

I will echo what everyone else is saying.... put in the offer you can afford, you have to live with it. I completely understand the "something being off"; trust me no matter your price point the perfect apartment is not out there. maybe you and your wife should think what you can compromise on, ie closet space. Boy would i LOVE more closet space but i LOVE everything else about my place, and i hear the storage places work great!!!!
enjoy and best of luck!

Its not just about the buy side hitting the mark but also the sell side. Seems the seller has done his/her job and priced appropriately to generate the interest you have reported. You need to be equally aggressive if you want it and want to avoid a bidding war. I doubt you'll get anywhere by treating it like another overpriced listing and bidding low, but as other have said, it couldn't hurt. Plenty of sob stories about people letting THE ONE get away. For a buyers market there is a genuine lack of quality listings priced appropriately so if that's what you're after but don't have the $$ for this one, then set your sites a notch lower and be ready to get aggressive.

Ignore the broker. Her "offers" may evaporate. Put in an offer if you want the apartment, of course that's what you do.

However, let's note that you are in the rather-fussy-buyer category; you've rejected 24 apartments so far. You have every right to be fussy, but fussy people rarely get bargains when their tastes happen to coincide with the masses (which yours do). And sometimes they overpay and live to regret it.

I think 30 years' analysis is spot-on. Lots of good comments here, actually.

Hope it works out great for you!

{Manhattan real estate agent.}

can't help myself....how many places do you get to pass on before you're considered fussy? six? eight? three?

Yes, NYC10007, you are too fussy. For the sake of argument, let's say you're buying a $2M apartment, which works out to a $100K commission. How dare you spend only $4000 for viewing each apartment? Do you know how much time it takes out of a broker's schedule? Like a whole hour!

I don't bother to post anti-broker rants, but any broker who would write "fussy" about this sensible sounding poster is exactly the kind of person I would never, ever want to be my broker.

jim, how is it a sign of stability if the counterforces are so strong? it is the result of relatively easy money, a relatively optimistic mood, and people once again often settling in order to get into the market. two or six months do not a market make. or break. incomes, rents, supply, bankruptcies and foreclosures, developer/lender distress, demographics, availability and terms of credit, employment, need for mobility, perceived quality of life issues, cost of basics such as education and health care, the dollar and strength/weakness in foreign economies, those are the things that affect this real estate market in the long term. the only factors i see favoring the market are the pervasive belief that owning is better combined with years of frustration for many (which will lead many to buy apartments that are too small), and possibly a temporary boost in some sales due to the dollar.

i was a bear long before the lehman explosion.

I think Fluter raises a good point, not sure why it is being attacked. A fussy buyer (i.e., one who need everything on their checklist) is not likely to get a home for a steep discount. Huge discount purchases tend to exist when something is off. First thing I would be able to overlook is finishes b/c you can fix those.

Hey CC - I agree. My wife and I looked at about 110 apartments before we bought. Now, the majority of these were just 10 minutes in and out at the open house, but we looked long and hard at many apartments in a number of neighborhoods before we plunked down our $. I think we got a very good deal and if that makes us fussy, then I'm okay with that.

well, if 24 makes you fussy, what in god's name does 110 make? my answer: an informed and intelligent buyer. and, of course, the fact that so many places are fundamentally misrepresented by the listing agent doesn't make it any easier. i have literally begged agents to tell me what other people have objected to before seeing a place to try to avoid wasting both our time; never seems to happen.

12 places is 2 weekends of open houses. Then figure another 1 or 2 that are holding open houses in the buidlings that you are going to + we looked in several specific neighborhoods + we looked at a couple of different price-points to be comfortable...really, I am kind of surprised that people would buy an apartment only looking at 12 places. God knows I looked at exponentially more on-line before we ever went to the open houses too.

I guess if you have a wad of cash and $ is not a problem whatsoever then you can see a few and choose one. Although, in that case, the apartments you can afford are so nice that I would have a lot more fun going to open houses. To each their own.

UWSer, if you want to say that having narrow search criteria will make it hard to find a bargain, that's one thing. If you want to equate seeing 24 apartments with being fussy, that's another.

Fluter, how many buyers have you had in the past year (if I'm remembering correct, that's about when you started), and how many $ have you brokered from the buy side? How many places do they look at on average?

Everyone has provided very good input on this thread, particularly 30yrs who pretty much hit the nail right on the head on his macro level assesment.

As an update, we decided we wanted to put in an offer, so our broker communicated this verbally to the seller's broker. We started at 10% below ask, feeling more comfortable leaving room to go up on our end. Her response: Don't bother, the seller will be offended and as a result wouldn't even consider us as a fallback if the other offers don't go through. She suggested we put in our MAX offer, so long as it's closer to ask, along with a glowing review of our credentials and love for the apartment.

My gut is that we simply found a place that was priced right, and it truly is that much nicer (at least in our opinion, as well as those others interested) than comps on the market. Broker's bluntness/rudeness/overconfidence...whatever you want to call it put us off, so we're not going to even bother.

Just to answer a few questions which factor into the equation, since I'm sure I will be posting again about another place once we find the next one:

1) We are looking to own the apartment indefinitely, so as for picky, yes, we are being very picky. I hope that anyone who is spending $1 million+ dollars is going to be picky about what they're buying.

2) How did we arrive at 6% below ask as our max? Happens to be the number that we decided we simply will not go over (normal life style, cash in the bank, cushion...etc.) Having seen apts. in the same price range sell for 10%+ below ask, we didn't feel like we were exactly reaching with our hopes/expectations.

3) However, have we seen enough apartments yet? Probably not...but I'm pretty sure we'll look back and say this is the one that got away. Maybe it's just too early in our process that we weren't prepared to just bite the bullet and pay more than we want to.

Thanks again everyone for your feedback, looks like this was a nice "clean" discussion and I'm sure many others will be experiencing the same thing in the next few months. I hate that I'm sensing a mini-rebound for those apartments that are "priced right" for the market, particularly since I still don't see much "value" in anything quite yet. If something is selling at or above what it sold for in 2006 or 2007, I don't particularly want to be that buyer. Just doesn't feel right to me, but I guess with such a limited amount of "properly priced" good apartments, with so many people just like me having been sitting on the sidelines (those ready to buy for personal reasons), the goods ones are gonna go for more than they would if they had real competition.

Thanks again!

I believe the seller's agent is legally obligated to present your offer, and not guess what the seller's response will be.

And what's the downside? Will you be blacklisted and never be able to work in this town again?

NYC10007, thanks for sharing so much info. It sounds like it's an apartment whose current price is simply beyond your current budget. The way you describe the situation, I imagine this'll go for more than 10% beyond your budget, so don't stress out too much about "it getting away" since if it goes quickly for above-ask, then it was simply never within your grasp.

Happy hunting!

Based on the "you never know" theory, I would ask the broker to present your offer to the seller.

Buying a home is not a transparent process---while it does sound like this particular apartment will sell for close to the asking price, maybe it won't.

In any case, in this (or almost any) market, a bid of 10% below ask is perfectly respectable.

"Having seen apts. in the same price range sell for 10%+ below ask, we didn't feel like we were exactly reaching with our hopes/expectations."

You have apartments in the same price range selling for 10%+ off because they are 10%+ overpriced. This is EXACTLY why I warn people about looking at "averages" ($PSF, % off asking price, etc.). When you find a "good" apartment, it's not "average" and you end up in EXACTLY this situation: assuming that since other apartments take 10% off that the one you want should as well because that's what the average is. It's natural to do so - but it almost always leads to this type of result. I've seen it for decades. People look for a special apartment and then want to negotiate on it as if it's average. Take stevef's anecdote about the guy who put in the 1,000 offers: do you think the 2 which ended up being the good deals were the one's which were properly priced and which had 100's of people looking at them? You can't have it both ways: if you want to get the best deal, you have to be willing to take the apartment which you can get for the best deal; you can't pick out ONE apartment, and then expect THAT apartment to be available at a "good deal" price. You make "good deal" offers on tons of places and then pick the one which ends up hitting YOUR number.

____________________

David Goldsmith
DG Neary Realty

Seems like everyone thinks this guy has a chance of getting the apartment and should submit the offer. While I agree he should make the offer I say he has a VERY slim shot. A broker isn't necessarily "screening" potential buyers by saying don't bother putting an offer under ask. They are merely letting people know not to have unrealistic expectations. Why waste someones time? If anyone has been witness to some of the activity going on in the market then they know that bidding wars still exist. Not necessarily over asking price but well priced desirable properties are moving.

Although there are some interesting points in the previous post, there are some that I wish to refute.

'When you find a "good" apartment, it's not "average" and you end up in EXACTLY this situation: assuming that since other apartments take 10% off that the one you want should as well because that's what the average is. ... I've seen it for decades. People look for a special apartment and then want to negotiate on it as if it's average.' -- The very point of shopping in a buyer's market is getting 'good' apartments at average, or below average, prices. By basic fairness, if in bull markets buyers had to pay up for crappy places, they are justified in expecting to pay a low price on a 'good' place in a bear market. So someone trying to get a 'special' apartment at a relatively low price is a reasonable strategy and as the market slides down will prove increasingly effective.

oops, someone submitted a post before I did. My post was in reply to David Goldsmith's comments.

While the logic of paying a low price for a "good place" in a bear market is totally reasonable, the truth is you get to be "right" with your logic but go away without the apartment you wanted.

First, let's ASSUME the market is going down.
THEN let's say we should get the apartment for less since the market is going down.

urkguy: it's already been noted that there are TONS of people sniffing around this ONE unit. And I disagree with your assertion that this is a case of "The very point of shopping in a buyer's market is getting 'good' apartments at average, or below average, prices". This is a case of finding ONE outstanding apartment and expecting the world to step aside so "you" can get it. I think what captures the "buyer's market" more accurately is stevef's scenario: that in a buyer's market, if you are willing to be flexible, you can get a great deal on an average apartment. There are never "sales" on 2 carat "flawless" "clear" diamonds (GIA D,FL); the market may fluctuate on the market price, but they trade at market.