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Unrepresented Buyer Stumbles Upon a House with a Looming Offer Deadline


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#1 rambaldi

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Posted 24 June 2016 - 06:24 AM

A young couple is walking down the street one Saturday afternoon and comes across an Open House that they check out for curiosity's sake and fall in love with immediately.

They haven't really considered purchasing a property so they don't have a realtor or pre-approved financing. 

That being said, they are currently in a comfortable financial situation thanks in part to their well-paying, stable jobs, life savings, and life choices and based on what they've witnessed from friends and colleagues, they are confident they would be approved for a mortgage if need be.

It's 4:00pm and the Open House is set to close.

The listing agent informs the couple that offers will be accepted until 6:00pm and there is already at least one offer.
They informally know of one realtor but for whatever reason, they can't get a hold of her.

The couple really wants to place an offer on this house.

 

What should the couple do?
 

What should be the listing agent being doing if the couple approaches him with an expressed interest in placing an offer on the home without a realtor?

 

 

Thanks.


Edited by rambaldi, 24 June 2016 - 06:29 AM.


#2 spanky123

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Posted 24 June 2016 - 06:32 AM

Personally, I would walk away from any deal where I was being pressured to make a decision within a limited timeframe and without adequate representation. I would inform the realtor that I was interested in the property, willing to make a reasonable offer, but unable to do so within the strict timelines being set. Since the realtor has a fiduciary responsibility to the seller, my guess is that he/she would accommodate your request for an extension to seek representation unless they had a pocket full of full price non-conditional offers. If that is the case you probably would not have got the property anyways.



#3 VicHockeyFan

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Posted 24 June 2016 - 06:34 AM

I'd say the couple should think twice about buying the only house they looked at, on a day or period in life they were not even looking to buy a house.

 

Too much emotion overtook them, unless they are buying and selling all the time and this was truly a remarkable house.

 

Of course, Realtors aren't likely to say that... although even they will admit that most scenarios like this will end with the buyer having second thoughts.

 

I sold real estate (new condos) for a couple years.  Ya, you'd get the odd person that would walk in, make an offer the same day and eventually complete, but you'd get far more that would bail on the offer. 


<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#4 dasmo

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Posted 24 June 2016 - 06:44 AM

I would offer 200k over asking with no conditions.... NOT! Take this as a sign you are interested in purchasing a home and get your sh*t together and do it right and with caution. You are talking about buying something that will take you 25-30 years to pay off with a large portion of your income and savings at a time when interest rates are at the bottom and have been there for a while. People spend more time researching what shoes to buy.....

#5 johnk

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Posted 24 June 2016 - 07:50 AM

We bought our house in 45 minutes. It was a different market to be sure but it was a very good house and was not going to last long. Nerve-wracking, more than we thought we could afford and plenty of work to be done when I was already pretty burned out from a previous large scale reno.
My wife insisted and we plunged.
Fast forward 21 years and its worth 4.5X the purchase price. Sometimes it pays to listen to the better half.
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#6 MarkoJ

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Posted 24 June 2016 - 07:51 AM

As the listing realtor I would encourage them to find their own representation and if that failed I would recommend a realtor outside of my office to represent them.  Multiple offers, time constraints, etc., likely first time buyers, they need representation.

 

In my opinion the young couple shouldn't be buying the first house they randomly walk into. The number one mistake in real estate I see is people buy on emotion, especially in heated markets.


Marko Juras, REALTOR® & Associate Broker | Gold MLS® 2011-2018 | Fair Realty

www.MarkoJuras.com - MLS® from $899 and $1,000 cash back for buyers | www.834sales.com & www.promontoryforsale.com - Building(s) specialist 

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#7 MarkoJ

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Posted 24 June 2016 - 07:53 AM

We bought our house in 45 minutes. It was a different market to be sure but it was a very good house and was not going to last long. Nerve-wracking, more than we thought we could afford and plenty of work to be done when I was already pretty burned out from a previous large scale reno.
My wife insisted and we plunged.
Fast forward 21 years and its worth 4.5X the purchase price. Sometimes it pays to listen to the better half.

 

The majority of individuals that buy a home have viewed it for less than 45 minutes; however, the context is important.

 

- Did you have to go completely unconditional in a multiple offer situation above asking price?

- Was the home 6 to 8x your annual family income at the time?

- Was it the only home you saw?

 

etc....


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Marko Juras, REALTOR® & Associate Broker | Gold MLS® 2011-2018 | Fair Realty

www.MarkoJuras.com - MLS® from $899 and $1,000 cash back for buyers | www.834sales.com & www.promontoryforsale.com - Building(s) specialist 

Looking at Condo Pre-Sales in Victoria? Save Thousands!

 

 


#8 Dr.Doinglittle

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Posted 24 June 2016 - 08:29 AM

45 mins seems about right. When I was house hunting I saw some couples decide to make offers in half that time.

 

People spend more time choosing a fridge than a house!



#9 Jason-L

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Posted 24 June 2016 - 10:14 AM

They might also want to pinch themselves and make sure they're not dreaming.



#10 johnk

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Posted 24 June 2016 - 02:17 PM

The majority of individuals that buy a home have viewed it for less than 45 minutes; however, the context is important.
 
- Did you have to go completely unconditional in a multiple offer situation above asking price?
- Was the home 6 to 8x your annual family income at the time?
- Was it the only home you saw?
 
etc....

There was one offer above ours but we offered full ask, cash 30 days.
It was about 20 times our income actually, but an atypical situation because we had come back from 4 years abroad with no jobs and small income from interest & investments.
It was the 3rd house we saw, other two were almost the same price but way less house for the money.
We didn't know it at the time but we fortunately came into a flat market in late winter 1995.
I was more nervous than the boss but she said, "It has good bones!" She was right, but it was nerve-wracking because we had not much safety net and an 11-month old baby. In retrospect, nowhere near as crazy as today, though, but a leap all the same. We feel lucky we are not in the market these days on either end.

#11 johnk

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Posted 24 June 2016 - 02:20 PM

It was our 4th house purchase so we did have some experience. Interestingly it was the first house we owned built in the 20th century but it was tired.

#12 rambaldi

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Posted 26 June 2016 - 02:42 PM

As the listing realtor I would encourage them to find their own representation and if that failed I would recommend a realtor outside of my office to represent them.  Multiple offers, time constraints, etc., likely first time buyers, they need representation.

 

Unfortunately, I've been to many open houses in the past year, and have yet to overhear this advice given by the listing realtor to unrepresented and interested buyers.



#13 rambaldi

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Posted 26 June 2016 - 02:45 PM

Sounds like there's still value in using a realtor in the offer process, even in this crazy, unconditional offer is the norm, market 



#14 VicHockeyFan

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Posted 26 June 2016 - 03:21 PM

Unfortunately, I've been to many open houses in the past year, and have yet to overhear this advice given by the listing realtor to unrepresented and interested buyers.


Of course. Because in our system rarely does anyone work outside of the commision system. Nobody pays a realtor hourly for advice. So there is always a profit angle,
<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#15 LeoVictoria

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Posted 26 June 2016 - 05:16 PM

Sounds like there's still value in using a realtor in the offer process, even in this crazy, unconditional offer is the norm, market


Nothing is stopping you from buying without a realtor. We did. run it by your lawyer first if you want but real estate offers aren't exactly rocket science

#16 lanforod

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Posted 27 June 2016 - 07:36 AM

Don't listing realtors often have a clause that says they get the full the commission (instead of half) if the buyer has no representation? It doesn't cost anything to use a Realtor for listing, right, as the seller pays commission...



#17 VicHockeyFan

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Posted 27 June 2016 - 08:30 AM

Don't listing realtors often have a clause that says they get the full the commission (instead of half) if the buyer has no representation? It doesn't cost anything to use a Realtor for listing, right, as the seller pays commission...

 

Let me tell you from experience when I sold condos directly for a developer, in the 90's.

 

If a person walked in, had no Realtor, I had permission to do negotiate up to and including 3% down.  Because there would be no Realtor cut.

 

If the person walked in with a realtor, that offer had to go to the developer.  He would not negotiate nearly as much.

 

So yes, the buyer with no Realtor, at least in our two projects in town, got better prices, if they negotiated it.


<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#18 VicHockeyFan

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Posted 27 June 2016 - 08:30 AM

Don't listing realtors often have a clause that says they get the full the commission (instead of half) if the buyer has no representation? It doesn't cost anything to use a Realtor for listing, right, as the seller pays commission...

 

Except if I was the vendor, I might press my Realtor to not get that entire cut.


<p><span style="font-size:12px;"><em><span style="color:rgb(40,40,40);font-family:helvetica, arial, sans-serif;">"I don’t need a middle person in my pizza slice transaction" <strong>- zoomer, April 17, 2018</strong></span></em></span>

#19 LeoVictoria

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Posted 27 June 2016 - 09:53 AM

Don't listing realtors often have a clause that says they get the full the commission (instead of half) if the buyer has no representation? It doesn't cost anything to use a Realtor for listing, right, as the seller pays commission...

 

I don't know what happened in the end, but we used that in the negotiations.   Take the buyers realtor's commission off the top since it doesn't exist.   

What the selling realtor ended up doing with his clients I have no idea.   In the end it doesn't matter since any price in 2013 was a good price.



#20 dasmo

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Posted 27 June 2016 - 12:02 PM

I had a realtor for my first house purchase. They didn't find my house. They also didn't help in negotiations but rather fought against my opening offer. When I asked what would you offer they said maybe 5% under ask. (House was on the market over 30 days circa 2003). I offered 20% under with her being very resistant. Got it for over 10% under in the end. Bought two other properties with no realtor. Just my lawyer for advice. I just found that the Realtor is on the side of selling the house fast, not really on "my side" so why use one? Where is the value add as a buyer?

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