Are Realtors® Prodding Buyers To Overpay For A House?

By
Real Estate Broker with CJ Realty Group, Inc.

Stack of MoneyThis week on my blog in the Washington Post- “Should you make that low ball offer?  a commenter suggested “many agents will try to prod you into offering more than necessary in the hopes that the seller accepts and the agent can collect his/her commission that much sooner.”

The comment made me think about how consumers get the impression that Realtors® are only driven by a quick commission.   In today’s Northern Virginia real estate market getting a deal from offer to closing gets harder and harder.  There are no deals that are a slam dunk unless it is a cash buyer with verified funds, a large earnest money deposit and no contract contingencies.  Quick commissions were left behind in 2005.

Will an agent prod a buyer to make a higher offer than they should?  Most agents will likely prod a buyer to make an offer that has a chance of being accepted or at least generate a counter-offer for consideration.  An agent who had done their homework and provided the neighborhood comps to a buyer will know close to what a home is likely to sell for.  The chances of a buyer paying to much for a house in Northern Virginia are also fairly slim.

If the offer is above market value the buyer’s appraisal won’t support the contract price.  Agents have no sway with appraisers.  Listing agents can offer an appraiser the comps used to determine the sales price but unlike the hot market in 2003-2007, it’s hands off.    If it doesn’t pass the sniff test the appraiser isn’t going over-value a property.

Then there are those pesky short sale and REO lenders.  They aren’t pushovers on low offers.  Yes you will  find listings in the MLS for undervalued properties.  But  guess what happens as soon as the bank  sends out their own appraiser?  Ask the hundreds thousands of buyers who have gotten a counter-offer from the bank well above list price resulting in either the property going back on the market again at a higher price or a buyer paying the lenders price.

The Northern Virginia real estate market is not the same as the areas that make the national news.  Seeing homes selling for 90% or more of their list price reflects our market has stabilized.  This is a good for for everyone and has nothing to do with agents prodding buyers to write offers just to earn a few dollars.

 

 

Originally posted at www.VaRealEstateTalk.com

 

Posted by

                                   Real People*Real Lives*Real Estate

If you are interested in learning more about the Northern Virginia Real Estate market including Alexandria, Arlington, Fairfax and Prince William Counties give Cindy Jones and CJ Realty Group,  a call at 703-346-2213. 

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Topic:
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Comments 16 New Comment

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Cindy Jones
Pentagon, Fort Belvoir & Quantico Real Estate News
CJ Realty Group, Inc.

Bliz-unfortunately we usually hear about those stories when we are called to sell a home.  Then we discover they didn't use an agent and now realize the mistake.

January 24, 2012 07:34 AM
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Cindy Jones
Pentagon, Fort Belvoir & Quantico Real Estate News
CJ Realty Group, Inc.

Scott-thanks for adding all of the other critieria that help make a good offfer.  I've written in the past that "highest" is not always the "best" offer.

January 24, 2012 07:36 AM
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Cindy Jones
Pentagon, Fort Belvoir & Quantico Real Estate News
CJ Realty Group, Inc.

Robin-thank you for your comment.  Deals these days take a lot more to get a deal to closing and buyers who are working with their own agent are hopefully getting good advise on writing a competitive offer.

January 24, 2012 07:40 AM
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Cindy Jones
Pentagon, Fort Belvoir & Quantico Real Estate News
CJ Realty Group, Inc.

Kay-I've fortunately had relatively minor appraisal issues with my listings but plenty of agents have and it is the final stop to getting a deal to close.

January 24, 2012 07:41 AM
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Cindy Jones
Pentagon, Fort Belvoir & Quantico Real Estate News
CJ Realty Group, Inc.

Christine-you are in the same situation we are with list to close ratio.  I often receive offers well below list price at the same time I get one that is at list or close to it.  I wonder how many low offers the buyers make before they understand it won't buy them a new home.

January 24, 2012 07:43 AM
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Cindy Jones

Pentagon, Fort Belvoir & Quantico Real Estate News
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