wanderlaisilva wrote: Well, we made an offer increase to 240K. I guess we will know something this week since the other "people" have also made their offer.
forgetmenot10371 wrote: Well not two days after their deadline came by, he called up and asked if we were still interested in the house. By this time, a week had already gone by and we found another home. A lot of realtors ( not all!) are playing these types of games.
Imhotrodcrazy wrote: Never, ever, trust a "realtor". Believe me, I know what I am talking about. Do what your heart and your "wallet" tell you to do. Go with your gut feelings. Realtors are on equal footing, IMO, with lawyers, you can't trust either one.
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Hi, all!
I just wanted to comment on something that struck me while I was reading this thread.
It appears as if folks feel that imaginary "other buyers" are a common tactic used by real estate agents and banks to inflate the bid price offered by a potential buyer.
I have no doubts that some agents have employed this tactic, but IMO, most do not, especially in an REO situation. There's no incentive for them to do that.
An agent working for someone other than the listing broker is in the dark about other offers unless informed of this by the listing broker, and would see his commission increase by only $225 (AT MOST, and probably much less) in the above scenario by recommending the increase in the offer price because there are "other buyers". At the same time, that agent would be subject to the added risk of the sale not going through at the higher price, perhaps due to the property appraisal or the buyer not qualifying for more of a mortgage loan.
The agent doesn't get paid if his buyer doesn't get the property, so he is highly motivated to see his buyer make a successful bid.
If the agent does work for the listing broker, he is in a position to know, through his broker, if and how many other offers there are on an REO. He may also be privy to what those other offers are, even if they were submitted by cooperating brokers.
In an REO situation, with the property available for sale through the MLS, his listing broker knows MOST of the big picture, as MOST offers would be submitted to the bank through that listing broker. But banks also have potential buyers that DO NOT go through the listing broker, but deal directly with the bank.
I'm one of those potential buyers, and for the most part, I don't submit anything through a broker, so he's got no way of knowing that I'm making an offer, too. I don't normally get involved with transactions listed under exclusive right to sell contracts, where a commission is due to the broker no matter who actually sells the property. I look at exclusive agency listings or open listings only, as well as in-house listings at the bank.
My point is that the bank alone has the big picture when it comes to offers made/accepted/rejected. So, even if a buyer is working with the listing broker for an REO property, and that broker tells you there are no other offers, that may not be the case. If the broker says there are other offers, I'd tend to believe him.
But the bank is under no obligation to tell a broker about another buyer that they themselves are working with, in fact, it is in the bank's best interests to keep the broker out of the loop until the very last minute, and it's in my best interests as well.
As an investor, I evaluate an REO property and then make my offer. It's a take it or leave it offer, and if they leave it, I move on to the next property. The offer that I've made is normally for a fast closing at a real low-ball price, without any contingencies for financing or anything other than clear title. Sometimes, after I've moved on from a rejected offer, the bank comes back to me because the other accepted offer didn't go through as expected. This is not all that unusual with REOs.
But if I'm a buyer who plans on living in the REO property, I evaluate it and make my highest and best offer (approximating fair market value) right at the outset if I truly want that home. I'm not looking at the profit/loss aspect for a resell/rental like I would with other properties, so I'm not trying to low-ball it right down to the last nickel. I want my offer to be the one accepted by the bank.
Bottom line? Everybody wants a good deal, but if your offer isn't a successful one, you've just wasted your time. And that "other" buyer that you don't think exists might just be me.
(I truly hope that everyone gets that house that they want, at a price that they can afford, and lives happily ever after! I just wanted to quash some of the paranoia about allegedly non-existent "other buyers".)
P.S. I'm not a real estate broker, but I used to be one, and I dealt with lots of REOs...it was my specialty, right up until the time that I realized buying these properties was a heckuva lot better that merely brokering them. And I'm sorry that this post is so very long, too...
