bostonbubble.com

JCK · Joined: 15 Feb 2007 Posts: 559

Sounds reasonable enough to me. You're probably right; she isn't looking for a client who's going to spend six months making offers 15% below asking, until the buyer finds what a motivated seller.

john p · Joined: 10 Mar 2006 Posts: 1820

I used Bob Simone as my buyers agent:

http://www.realtyplan.com/homes/Agents/Robert_Simone.htm

Bob is a close friend. I think Bob will say the normal things that most buyers agents will tell you to give you perspective to help you understand the seller's perspective. Not so much to make you act on the wishes of the seller, but to understand whether or not the seller is ready. I think the fact that I trusted him helped me be more open to the feedback.

The flip side was that he trusted me and he knew I valued his time as well. Bob was a great negotiator, was great following up on the details and was fun to be around. I understood that schlepping him around to open houses was a waste of his time. I knew that I could do the leg work, the drive-bys and the open houses and just call him in when I wanted to pull the trigger. Bob is in the business for the long haul, and he has no problem helping people find their homes; I just wanted to focus his effort on the matters that would give me the most value (the negotiation and the closing process).

The way I saw it, if you went straight to the selling agent, they ususally make you sign Purchase and Sales agreements that favor the seller. They get the entire commission and nobody is looking out for you.

Bob wasn't shy to low ball for you, but he would tell you that a lower offer would be risky if you really liked the place; meaning if he thought it was a long-shot, he'd tell you.

The attitude that you need to get is like how you get over a girl; find another girl. If you can find 5 or 6 places that you really like and lowball all of them, one might break your way. If you focus too much on one, you get too emotionally attached. I had 5 houses that I could have moved to. Of the 5 the first one that dropped to my wheelhouse I bought. A few months later two more came very close. So, I'd track a bunch.

john p · Joined: 10 Mar 2006 Posts: 1820

Let me define what I consider a low-ball:

A low-ball offer speaks about what you honestly feel will be the near future value of a place. Meaning, if you are timing the market within a two year period (you want to buy something but have some flexibility as to when) wouldn't you have a disposition about whether the market was going up or down. If you thought the market was going up, you might act more quickly. If you think time is on your side; you'd take your time. Now, to absorb the risk of a market drop, you discount the value of the property to align with where you think the market might drop to. This is totally fair, and don't feel bad about it. Banks raise and lower interest rate depending on their assumptions of the future value of money. If you think the future value will drop, you have every right and why compare to a 3 month old sale, when the market will drop each month going forward?

The key is aligning with the right type of seller. To a buyer-seller pair that someone is trading up or trading down, things are relative. For a first time buyer, the time to enter the market is more important. I think sellers need to think about how great it is to get a first time buyer because they don't have to worry about them selling anything. In today's market that has real value. This is why I think a first time buyer can discount.

Think about when things get down to the wire, and if the seller doesn't accept your offer, they will still have open houses and you'll have to think about others going and looking at the house you want. If nobody is showing up to their open houses and you keep making offers, eventually the rain cloud over them will get stormy. If you buy in the down season, where fewer buyers are out, you have a huge advantage. Imagine if someone low-balled you and then you have an open house and 5 or 6 couples walk through your house. Are you focused on the low-ball offer or thinking about whether one of those 5 couples will make an offer?

The location I ended up in offered a really good value for my price point because the ratio of buyers to sellers favored me in a big way, and I bought in the down season when the majority of trade up or down buyers had already made their deals.