Tuesday, September 16, 2008
House Buying Insight
Above is a nearby house for sale. At least it was for sale. I saw on my email alerts from Coldwell Banker that the listing was *expired*. I had noticed several price reductions on the property so I figured it might be a distressed sale - which is what I am looking for.
I called the broker who supposedly just lost the listing to see what was going on. I always ask about the seller - Are they getting relocated? Are they distressed sellers? Divorce? I don't even really have to probe that much because the listing agents ALWAYS give me the entire scoop. This I can't believe. I realize they have all sorts of *disclosure* requirements but I still think the info they give me crosses the line. In other words, they too freely tell me things that sell-out their client and convince me to lower a potential bid.
It be like if a broker came into the trading pit, asked for a market in a particular option and then told us to raise the offer because he had a market order to buy. In that case he'd obviously be screwing his client.
The agent I called told me this - that the couple had room to lower the price by about another 40k but that would be it. He told me they didn't *have to move* that they wanted to slide over into an adjacent town for *the schools*. I asked if it was still for sale and he said technically *no* but he could arrange a showing. In other words they wanted to sell but were at their price limit based upon how much they had mortgaged. Sell for more than 105% of what you owe and you have to dip into your pocket!
I told the broker to get back to me with a time to see the place.
Then, a few days later it hit me. Why should I go through this broker? Since his *listing* was expired (there's no sign in front of the house either anymore), if I was interested in bidding for the house I should just knock on the door.
Taking a selling broker out of the equation adds about $20,000-$30,000 more of wiggle room on negotiations - at this price point.
In other words, this couple might not be willing to sell the house at say $600,000 because after a 5% real estate commission they will net only $570,000.
BUT, they may be inclined to hit a 600k bid with no agent involved.
So when the broker got back to me I just blew him off.
I haven't seen the house yet and probably won't anytime soon. The turmoil on Wall Street has, once again, put my wife's job in geographical limbo.
No surprise there. That uncertainty was wisely factored into the houses we bid on last year.