The following article in the NY Times real estate section, http://www.nytimes.com/2011/02/08/nyregion/08appraisal.html?hpw, describes a couple who spent 6 months trying to sell their apartment. They had enough with the open houses and it seems were happy with the offer close to ask. My question relates to the broker. Please explain the rationale about telling them to wait until Spring when they... [more]
The following article in the NY Times real estate section, http://www.nytimes.com/2011/02/08/nyregion/08appraisal.html?hpw, describes a couple who spent 6 months trying to sell their apartment. They had enough with the open houses and it seems were happy with the offer close to ask.
My question relates to the broker. Please explain the rationale about telling them to wait until Spring when they could get 9% more for their apartment, as the article clearly states they could have recieved close to $900k from the original ask of $825k.
If the apartment has been on for 6 months, that means it cycled through probably the summer and fall, and maybe the end of last spring.
So the only person who seems not to lose would be the broker. If he was right and they declined the offer and waited, the broker would possibly see more money, but not enough that this makes sense.
I am happy this couple seems to have ignored the broker, but it clearly makes me wonder sometimes about the advice being given.
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Response by tina24hour
almost 15 years ago
Posts: 720
Member since: Jun 2008
Not sure I understand the question.
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Response by gabbic
almost 15 years ago
Posts: 2
Member since: Jan 2011
wouldn't they both have benefited from the higher sale price?
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Response by Mikev
almost 15 years ago
Posts: 431
Member since: Jun 2010
Why would a broker who helps you set the price of your apartment, tell you after receiving an offer close to the price after 6 months, tell you not to accept? And then add on the fact that their reason was that if they hold off for another 3-4 months the price should go up 9%. I am just trying to understand the brokers rationale for the advice.
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Response by Mikev
almost 15 years ago
Posts: 431
Member since: Jun 2010
sure they both would benefit. But they were talking about an open house pretty much every week and having a child to clean up after. So there really was no incentive for the couple as they got close the ask. The broker was saying hey lets reset the price higher and wait for spring, this after 6 months of no bid close to ask.
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Response by gcondo
almost 15 years ago
Posts: 1111
Member since: Feb 2009
This looks like reality twisted for the sake of a story. What broker would dare predict what an apartment would sell for in the spring and advise against taking an offer... Unless of course, the couple asked him that specific question... which seems more likely.
As for the original question, who is a broker looking out for? lol...please
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Response by front_porch
almost 15 years ago
Posts: 5320
Member since: Mar 2008
The whole "Freakonomics" argument against brokers is that, as a profession, agents weigh the cost of time differently than clients do, and advise taking a high offer near list to make a sale quickly.
So now there's a story of a broker who DOESN'T do that, and you think that's nefarious too?
ali r.
DG Neary Realty
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Response by jordyn
almost 15 years ago
Posts: 820
Member since: Dec 2007
Ali: That was roughly my reaction as well. The broker is clearly not incented to wait longer to do a deal, so I'd categorize the advice as "dumb" rather than "evil".
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Response by NYCMatt
almost 15 years ago
Posts: 7523
Member since: May 2009
Himself.
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Response by Wbottom
almost 15 years ago
Posts: 2142
Member since: May 2010
actually the freakonomics argument is mostly about how working to achieve the best deal for the buyer or seller provides meaningless benefit to the broker, and often risks not getting a deal done at all
speaks of the tendency of brokers to do or say anything that leads to a deal, any deal; not necessarily a good one for buyer/seller
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Response by jordyn
almost 15 years ago
Posts: 820
Member since: Dec 2007
Wbottom: I don't think you an Ali are disagreeing (although she's definitely right that there's a timing element to the analysis). Even reading the argument under your interpretation, though, it doesn't make sense that the broker would tell the sellers to hold off on accepting an offer on the table for several months, since that would reduce the odds of eventually making something happen.
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Response by truthskr10
almost 15 years ago
Posts: 4088
Member since: Jul 2009
Missing equations; Where are the Huters moving to? a rental? a sale?
Rutenberg agents are pretty much freelance where it is a 90/10 split broker/office.
So 90% of a commission is substancially higher, making 90% of a higher offer also substancially higher making the new place the Huters want ot move to's commission substancially higher...if everything is higher in 6 months.
Its also just as possible the broker believes they will get more money later. While retaining a loyal customer in the meantime for future real estate endeavours and of course future 90% commissions doesnt hurt.
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Response by Mikev
almost 15 years ago
Posts: 431
Member since: Jun 2010
Ali this actually was not meant to be a knock, just really do not understand the advice based on the fact that the listing was out for 6 months already. I would understand if it was a quick offer way below the asking price, but not when it is close to ask and the brokers advice relates to the thought that in 3 months the market will have jumped 9%.
So it was not a broker is evil thing as I do not think that they would really say hold off to try and make a few thousand more out of the deal, but how in this time especially when people are not buying everything on the market for above ask, would he recommend turning down a deal close to ask.
What makes it even funnier now is i went to see who the broker was and it was the person who sold my apartment years ago, who was working for a different firm then, and at that time recommended someone who he obviously did not vet very well as it was a ridiculously long process to get to closing and I actually went after the brokerage for a discount because of it.
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Response by inonada
almost 15 years ago
Posts: 7952
Member since: Oct 2008
"But Ms. Huters and Mr. Hatch reached their breaking point. And they do not appear to be losing money on the deal, since public records show they bought the home in 2007 for $749,000."
Gotta love it when the NYT idiots miss an obvious renovation:
Is it a miss? Or just another NYT fluff piece designed to persuade buyer's to get the jump on the market.
"Your missing out, better jump on the those listings with those tired sellers before they wake up...before spring, come on now."
(thought I'd say something other than "buy now or be priced out forever")
Not sure I understand the question.
wouldn't they both have benefited from the higher sale price?
Why would a broker who helps you set the price of your apartment, tell you after receiving an offer close to the price after 6 months, tell you not to accept? And then add on the fact that their reason was that if they hold off for another 3-4 months the price should go up 9%. I am just trying to understand the brokers rationale for the advice.
sure they both would benefit. But they were talking about an open house pretty much every week and having a child to clean up after. So there really was no incentive for the couple as they got close the ask. The broker was saying hey lets reset the price higher and wait for spring, this after 6 months of no bid close to ask.
This looks like reality twisted for the sake of a story. What broker would dare predict what an apartment would sell for in the spring and advise against taking an offer... Unless of course, the couple asked him that specific question... which seems more likely.
As for the original question, who is a broker looking out for? lol...please
The whole "Freakonomics" argument against brokers is that, as a profession, agents weigh the cost of time differently than clients do, and advise taking a high offer near list to make a sale quickly.
So now there's a story of a broker who DOESN'T do that, and you think that's nefarious too?
ali r.
DG Neary Realty
Ali: That was roughly my reaction as well. The broker is clearly not incented to wait longer to do a deal, so I'd categorize the advice as "dumb" rather than "evil".
Himself.
actually the freakonomics argument is mostly about how working to achieve the best deal for the buyer or seller provides meaningless benefit to the broker, and often risks not getting a deal done at all
speaks of the tendency of brokers to do or say anything that leads to a deal, any deal; not necessarily a good one for buyer/seller
Wbottom: I don't think you an Ali are disagreeing (although she's definitely right that there's a timing element to the analysis). Even reading the argument under your interpretation, though, it doesn't make sense that the broker would tell the sellers to hold off on accepting an offer on the table for several months, since that would reduce the odds of eventually making something happen.
Missing equations; Where are the Huters moving to? a rental? a sale?
Rutenberg agents are pretty much freelance where it is a 90/10 split broker/office.
So 90% of a commission is substancially higher, making 90% of a higher offer also substancially higher making the new place the Huters want ot move to's commission substancially higher...if everything is higher in 6 months.
Its also just as possible the broker believes they will get more money later. While retaining a loyal customer in the meantime for future real estate endeavours and of course future 90% commissions doesnt hurt.
Ali this actually was not meant to be a knock, just really do not understand the advice based on the fact that the listing was out for 6 months already. I would understand if it was a quick offer way below the asking price, but not when it is close to ask and the brokers advice relates to the thought that in 3 months the market will have jumped 9%.
So it was not a broker is evil thing as I do not think that they would really say hold off to try and make a few thousand more out of the deal, but how in this time especially when people are not buying everything on the market for above ask, would he recommend turning down a deal close to ask.
What makes it even funnier now is i went to see who the broker was and it was the person who sold my apartment years ago, who was working for a different firm then, and at that time recommended someone who he obviously did not vet very well as it was a ridiculously long process to get to closing and I actually went after the brokerage for a discount because of it.
"But Ms. Huters and Mr. Hatch reached their breaking point. And they do not appear to be losing money on the deal, since public records show they bought the home in 2007 for $749,000."
Gotta love it when the NYT idiots miss an obvious renovation:
http://streeteasy.com/nyc/sale/49041-coop-423-atlantic-avenue-boerum-hill-brooklyn
http://streeteasy.com/nyc/sale/563708-coop-423-atlantic-avenue-boerum-hill-brooklyn
Is it a miss? Or just another NYT fluff piece designed to persuade buyer's to get the jump on the market.
"Your missing out, better jump on the those listings with those tired sellers before they wake up...before spring, come on now."
(thought I'd say something other than "buy now or be priced out forever")