. My realtor got me an offer from a young single woman for my mom's condo last night.
However, my realtor met her when she was having an open house last Sunday, and the woman didn't have a realtor. She asked MY realtor to show her a few other condos, then decided she liked ours, so she allowed my realtor to write up an offer for me to review.
This is dual agency, where a single realtor represents both buyer and seller. In some states it's illegal, but in Connecticut, you can do it if both buyer and seller agree to it.
While realtors love it, because they get double the commission, most every objective source I could find online said it was a bad idea because it's simply not possible for a realtor to represent your best interests and get you the highest and best price if they're also working for the buyer.
I mean, if you were suing someone, would you hire the same attorney as the person you're suing? Of course not.
So my realtor told me she had worked with the buyer in an email to me; then in her next email, she said, "As you know, I am now a dual agent, working for both the buyer and the seller...." She positioned it as a done deal, when actually, I have a right to decline this arrangement because it is very controversial. So this ticked me off. In fact, the brokerage is required by law to have both buyer/seller sign a form saying they agree to it. She emailed me that form with the "I consent" box checked off, along with the opening offer from the buyer. How presumptuous!
I emailed my realtor back and told her i wasn't comfortable with the arrangement and could she refer the buyer to another agent in her office. It's still not an ideal situation, as far as I'm concerned, because my agent is probably on friendly terms with coworkers in her office and they could easily exchange notes and do whatever it took to get us both to close on the deal as soon as possible.
I called a friend of mine who used to own a real estate brokerage and asked his opinion. His opinion was that dual agency was perfectly fine and no big deal. Guess I still had to disagree with that. He said, look, the dual agent has a strong incentive to close the deal. Umm, yeah. That's very different from working to ensure I get the highest and best price possible.
He also said they want the highest price too because then their commission will be higher. Well, yeah, but if you do the math, the increase in commission based on their getting you an extra $10,000 in sale price is just $500 (at 5%), while an extra $10,000 to me as the seller is a lot of money. So most realtors would opt to just sell something asap because it's not worth the extra open houses, time, delays, etc. to sell it for a higher price when they only make $500 or so more, in this scenario.
When I talked to my dad, he only focused on how much lower the buyer's opening price was compared to my list price. The difference was about $15,000 on a property that's only priced at $143,900 to begin with, after 2 price reductions. I explained to him that no one expects the seller to accept the opening offer and that you go back and forth until you arrive upon a mutually agreeable price.
Also, the list price is kind of meaningless, because the list price could be absolutely anything you want; it doesn't mean that is the true market value. The true market value is what a buyer is willing to pay, and the somewhat soft CT market showed through other recent condo sales in my mother's complex that my original price was higher than it should be as I had no offers after 2.5 months on the market.
Still, my dad was fixated on how much lower the opening offer was, and he said t was so low he just wouldn't respond, and basically walk away from that buyer. I was surprised and disappointed in his answer (as I was in my friend the former brokerage owner's answer). Again, not the best course of action, in my opinion. I mean, you at least want to try to negotiate and see where it leads you. Pride never sold a house.
So in the end, I followed my own counsel and it seemed to go okay. The buyer is a 29 year old first-time buyer, who I believe lives at home; her mother wrote the 1% deposit check and was doing the negotiating, not her daughter. She's putting down 10% or maybe 15%.
My realtor agreed without argument to dispense with the dual agency arrangement and asked if i was okay with her manager acting as the buyer's agent. I said ok, but in a way, it didn't really matter because I had at that point already decided I would not show my cards to my realtor, although of course she already knows I'm generally anxious to sell the condo cus i need the money to pay for my mother's care.
In the end, the buyer came up from her original offer by $9,500 and I came down from list price by $5,900. I did get the distinct impression my realtor's overriding concern was not letting this sale fall through and getting it under contract asap. When I had naively thought she should be primarily focused on helping me negotiate the highest price possible. So as mentioned, I made the decisions about each counter offer and didn't really ask her opinion too much.
My realtor seems to be concerned that when the buyer's mortgage bank appraises the property, my condo might come in at a value lower than the agreed upon sale price, in which case, the bank will refuse to write a mortgage and I'll be left to decide if I want to lower my price to the appraised value or not.
It's possible my realtor was just talking about the bank appraisal as a way to pressure me into settling for a lower price. I really don't know but I'll cross that bridge when we come to it.
I'm satisfied with the final price although my net will be quite a bit lower after commission, attorney fee and the 1% conveyance tax in Ct. However, I did the best I could with what I had to work with, and I can't control market forces. At least I can close this door and be done with the monthly condo expenses (taxes, electric and HOA fees), with winter coming soon enough and the possibility of being stuck with an unsold condo for another 6 months at least, and 6 months worth of expenses.
So let's just hope the bank appraisal is not an issue and that the inspection goes smoothly and that no one springs additional surprise charges on me. Tomorrow she'll email me the contract which I'll need to sign.
We have a buyer for mom's condo
September 5th, 2015 at 09:27 pm
September 5th, 2015 at 09:46 pm 1441489600
September 5th, 2015 at 09:56 pm 1441490197
September 5th, 2015 at 10:27 pm 1441492054
September 5th, 2015 at 11:02 pm 1441494149
September 5th, 2015 at 11:35 pm 1441496152
I hope everything goes smoothly going forward.
September 5th, 2015 at 11:41 pm 1441496511
September 5th, 2015 at 11:58 pm 1441497515
September 6th, 2015 at 02:11 am 1441505470
Should inspection reveal any deficiencies, you will likely need to fund repairs to code. Best outcome would be to have buyer pay a percentage of cost. Will you need to rent storage space for the items still in the condo or condo storage to facilitate buyer's closing date?
September 6th, 2015 at 02:24 am 1441506265
So you're suggesting if there is anything like that, to only offer to pay half the cost to fix those things?
No storage space needed; 95% of stuff is cleaned out of there and I will hire my handyman to haul the rest of the stuff out. I also plan to offer the buyer my mother's leather couch, in perfect condition, for just $250 becus it's heavy and bulky and i'd rather not have to move it. So that would leave just the bed (mattress and frame) which I'd toss in dumpster, the headboard, which I'd keep, a small cedar chest, the sewing machine and a few pieces of art, all of which I'll keep, along with some last remaining art supply stuff in lower level.
September 6th, 2015 at 04:15 am 1441512927
September 6th, 2015 at 10:56 am 1441537000
I'm surprised a few of you have said the agents could take a little less in commission if the appraisal comes in too low. This is why I like to write about such details here, because, being relatively inexperienced in real estate transactions, would never have thought a realtor would be willing to do that or consider asking them, but now you've given me some confidence I would not be totally inappropriate to do so.
September 6th, 2015 at 02:25 pm 1441549520
September 6th, 2015 at 02:43 pm 1441550614
September 7th, 2015 at 01:19 am 1441588799
September 7th, 2015 at 04:31 am 1441600288