@menloparkmom , when you say your H has “given up representing buyers who want a bargain,” do you mean as a buyer’s broker, or do you mean conveying their offers to his sellers?
BTW, not everyone is a high roller. Since when did people who are looking for realistically-priced fixer-uppers because that is what they can afford become beneath the notice of realtors?
It’s not really about being a high roller or not, or being realistic or not.
There’s a certain class of buyer who is never willing to pay the market price. They will perpetually offer 10%+ under the offer price, no matter how fairly priced the property is, in the hope of hitting that 1% chance of finding a seller desperate enough to take a low-ball along with no one else wanting the property. It’s a psychological issue as much as anything - these buyers need to “win” the transaction by getting it for less than the list price.
In anything but a strong buyer’s market, these circumstances are never both true. Most of the time these offers don’t even generate a counter-offer. So these buyers become a huge time sink where the potential payoff will most likely never happen. Representing these buyers costs you money, both in time and opportunity cost.
When you are the listing agent, dealing with this type of buyer takes very little time. You either reject their offer out of hand because the owner told you they won’t take less than a certain price, or you present it and then the seller says a few choice words and bounces the offer without a counter.
And while technically you are supposed to present all offers, brooming the bottom-feeders without bothering your client is just good service.
In cb’s case, where she is offering above-asking right from the get-go, she has a legitimate beef if her offer is not presented, or at least told up-front it’s not competitive. Having it go into a black hole is unprofessional on the part of the agent.
I think what @menloparkmom means is that there are investors/flippers/bottom feeders who will throw out 100 low ball offers hoping that one will stick. This can be very frustrating to a real estate agent. Most of these types in my neighborhood have their own real estate license, or have someone on their staff who carries a license. This makes it even more frustrating for me because they can make a zillion offers on their own behalf and then pocket the 2.5% commission that is paid to them in the transaction.
But, I bet it can be frustrating if they are using an agent to shoot out tons of offers that are not even going to get considered.
I try really hard not to waste someone’s time too much. If a listing agent is honest and tells me that they expect multiple offers and the offers are ranging around $X, then I know whether I should even bother to write up an offer. If a property is on the market for more than 30 days then I know the asking price is too high and I will offer what I think it is worth. However, there is a big difference in what I am willing to pay for a property and what an owner occupant homeowner is willing to pay. I usually do not make an offer on properties that I feel an employed or busy homeowner (meaning… not a lot of time to do a huge difficult project) could reasonably remodel themselves - just cosmetic work required.
And, I can get really creative with my terms to try to meet the seller’s needs. Sometimes these ‘creative’ terms are not understood or appreciated by an inexperienced listing agent. For example, I usually waive termite inspections or repairs or Natural Hazard Disclosures. And sometimes I offer to pay all the title insurance costs because I want to use my own Title Company. This causes many agents to fall apart because they insist that I have to get a Natural Hazard Disclosure because “their broker insists”.
It will be interesting to see what finally happens with this house, but of course in the meantime you just move on.
Nah… it is either some desperate family or one of those cookie cutter $2M plus flippers that got it. In the former case, it will be patched up piecemeal. In the latter, we know what will happen…
So this guy finally got his bidding war. Some agents love this tactic. One agent we talked to wanted to price our house about $200k lower than any reasonable market value to start a bidding war. We said no thanks. We didn’t do bidding wars.
I truly hope a young family doesn’t buy it with their last dime. It has asbestos pipes that need to be removed and the back corner of the house is falling off. Gas lines and sewer lines are dangerous. I don’t want to see a young family trying to live there. Hopefully they will get an inspection and run screaming.
But my bigger fear is a landlord buys it and just sticks up a for rent sign with those conditions still in place. This agent works a lot with investors who rent terrible little places for ridiculous rents. Both Tivoli and Charles were subpar condition rentals that he was selling for the owners (or acting as rental agent for renting)
Anyone who buys a home without getting an inspection deserves what they get.
" If a listing agent is honest and tells me that they expect multiple offers and the offers are ranging around $X’"
it is NOT the listing agents job or responsibility to tell you , or any other potential buyer, how much others are offering r may be offering!!
In fact, any listing agent who leaks that kind of information , before offers have been heard, to someone who is thinking about making an offer on a piece of property that he/ she represents, is not acting in their clients- the sellers -best interest!
HONEST Realtors don’t divulge that information.
I think CB, that the best option for you is to get your Realtors license, so you can be on an equal footing with others in the business AND know what kind of behavior is , and is not ok, as a Realtor in Calif.
I would NEVER expect an agent to tell me other offers. But I WOULD expect an agent to present my offer to the buyers.
Then again…if I were an agent, I don’t think I would welcome an offer someone else wrote up…and maybe that was the issue with this agent and CB.
CB…have you considered getting a RE license??
The listing agent’s job is to get the best possible deal for their client. There are many roads that can be taken to accomplish this.
If you want to create an auction environment, it’s pretty hard if you won’t tell anyone what the current number is that you have to beat. If you float a number past the agent there is nothing wrong with the agent saying “that number is not going to fly but if you want to waste your time submitting an offer with that number, feel free”.
That’s not what this agent is doing, though, and I have to wonder if he would present any offers where he is not also representing the buyer, because he wants both sides of the deal. In MA this has become a fairly rare occurrence because there’s paperwork that has to be filled out, and that can open up an agent to some liability. Most agents don’t really want to put a form in front of their customer that says “FYI, I don’t work for you, I work for the other guy”. Some states have even outlawed this (it’s called “dual agency”).
The bar to getting a RE license is pretty low in most states, it might benefit cb to get one.
IME it is the norm for opening offers to be 5 or 10% below asking. That’s a reasonable offer that indicated that the final price will be somewhere between the two. That is the expectation when setting the original price. Such an offer would not be considered a bottom-feeding insult, not worth pursuing.
Clearly, things are different in various markets. 
Also, the offer is a single sheet of paper that probably takes 5 minutes or less to write up and submit.
This varies by market. Here, in the “hot” areas the norm is to offer full price (if it is priced not below market) and add an escalation clause “buyer will beat any higher offer by $X up to $Y over asking price.” Meaning if you are offering full price escalating up to “full price + $200k” and beating the competition by $5K, and another buyer offers “full price +$50k” you only get to pay “full price + $55K”
I do not want to get my real estate license because it opens me up for a whole bunch of liability if I am selling a house I own AND I did renovations. I need to stay in the category of a homeowner selling my house - with renovations and all other conditions fully disclosed by the Seller.
But, that being said, I do know a lot of big competitors that have their own license. I might want to rethink my strategy. Also, in California, a real estate agent has to work under a broker’s license. I would have to find a broker to work under and I cannot imagine that I would work under a large national firm because I would probably be given quotas and they might even have restrictions on buying/renovating/selling my own properties
Our local market is a Seller’s market right now because of low inventory. It is not common to enter offers more than 5% below asking price, unless the property is priced completely wrong, is in serious dis repair, or has been lingering on market over 30 days (which is reason #1). Offers in California involve tons of pages of Real Estate Agent CYA stuff.
I think the specific issue on this offer was because I went in with Buyer Non Representation. This is legal and there is a specific form that I filled out to give the Listing Agent CYA. But, I know that agents hate this and do not want to see any transaction that doesn’t have an agent representing the buyer to keep all the commissions in the realtor community. They have a valid fear that they will be stuck in a dual agency position, without getting the dual agency commission. They fear they will have to handhold and manage the buyer.
I predict a rising trend of lower commissions… there are a lot of low commission brokerages opening up. This is because buying real estate is more in the power of the consumer than it has ever been from the Internet. It used to be that a Buyer was at the mercy of an agent to provide the ‘list’ of properties for sale. Then the agent would take buyers around to view houses. Now a Buyer can see everything for sale on the Internet and make decisions to view properties based on photos and data available. Buyers can execute offers via electronic signature and agents do not have to spend a lot of time meeting with buyers to fill out paperwork, etc. or faxing things around, or driving paperwork around.
And there is Redfin with its low-commissions seller’s agents.
Not in MA.
Plus, if you aren’t writing it up for yourself, there are rounds of signatures that need to be collected, you have to get a check from the buyer because the offer has to include some earnest money. It’s not a five minute process, which is why of you are working with a bottom feeder it can become a huge time sink.
I find it quite surprising that there is so much resistance to commissions dropping below 5%, especially in areas like mine where prices have gone up far in excess of inflation, and there is so much price difference just by crossing a town line.
The exact same house can cost $200K or $600K depending on if it is a few miles away in a less desirable town. It’s the same amount of work to sell it, regardless of the cost. So why does one house generate 3x the commission of the other? Market pressure should have equalized the commissions since the work is the same. And as cb pointed out, it’s a lot less work than it was 20 years ago. I remember paging through the MLS books than came out every week or two (which was technically not allowed by MLS but my agent didn’t care) and checking the for sale ads in the paper. Commissions have come down, 7% used to be common, but they should be lower. We do see 4.5% and occasionally 4%, but the vast majority are 5%.
Not that I am complaining too much, DW is having a killer year. 
I feel like there may be collusion between the firms that is keeping commissions high, but it is impossible to prove of course.
The vast majority here is 6% divvied up equally. Our sellers’ agent is getting 2% because he helped us with the other transaction, but he recommended to leave the buyer’s side at 3% instead of 2.5% because a lot of agents frown upon a lower take and would make sure their clients would not see the house.
What really used to make me laugh were the realtors who tried to maintain that you ought to pay the realtor MORE than the going rate so that they would really try to sell your place.
Oh, so you mean you don’t try for your clients unless bribed?
Good to know.
“I think the specific issue on this offer was because I went in with Buyer Non Representation. This is legal and there is a specific form that I filled out to give the Listing Agent CYA. But, I know that agents hate this and do not want to see any transaction that doesn’t have an agent representing the buyer to keep all the commissions in the realtor community. They have a valid fear that they will be stuck in a dual agency position, without getting the dual agency commission. They fear they will have to handhold and manage the buyer.”
I agree with this 100%.
If you want to play with the
“big boys” going forward, you need to prove that you can take care of any problems on YOUR end of any RE transaction. Either by getting your own RE license ,or finding an agent who will work with you at a low commission rate.
" I might want to rethink my strategy."
I think that’s a really good idea.
I’m sure there are small, independent brokers in SD , like my hubby up here in N Cal, where you could “hang your hat”.
And BTW, commissions here in NCal are now closer to 4.5% than 5%. Negotiated actual rates have come down in the past 10 years both because of technology and the rise in housing prices. Sellers are now generally paying only 2.5% commissions to listing agents.