Buying a house stinks....

[Greatwhite]

Realtors can be so shady... 

The wife & I have been looking for a bigger house for a while, and seriously for the last month.  We had a house picked out, but have been "letting it simmer" a bit to come down in price.  The market is slow in the price bracket that we're looking to buy in, and the longer a house sits, the more likely they are to come down at negotiation time.

Well, on Thursday, our agent emailed me a link to a nice house on a HUGE lot with an inground pool, 4 bedrooms, "finished" basement.  We went on Friday morning to see it, and placed an offer Friday afternoon.

Too bad the selling agent was banking on an openhouse this weekend, and planning to accept offers TONIGHT only at 6:30PM.  They rejected our offer on Friday, welcoming us to resubmit one tonight.  Yeah, she was DEFINITELY looking for a war...  The house was priced in the "lower range" that is moving faster, and they wanted multiple bidders.

Tonight - we upped our offer from asking price to +20k over asking.  We did a preliminary home inspection this morning, and used that as ammo.  We were +$20k and NO CONDITIONS.  We knew we would be stuck with a $30k window bill because the wood windows were all rotten.  There was a long list of "little things" that had to be done, but it was nothing that I couldn't do.... And the kitchen looked straight out of "IN STYLE" magazine, but the December 1989 issue.  That's another $50k to update.

SO by the time all was said and done, the house would have cost more than the on we LOVE (with a small yard) -- but it has a beautiful yard with a pool -- so we went ahead.

It was a LONG process tonight, because there were 4 agents there, and they each had to present their offers to the sellers and then wait while the sellers deliberated.  They then came back asking for later closing date and MORE MONEY....?  Forget that.  I was already offering $20k more than I felt the home was worth, but I gave them their later date.

We ended up losing out to another family, who offered $16k more than us - and then waived their "conditional on inspection" clause.  Well - good for them.  I hope they enjoy their money pit.

The wife & I were surprisingly not "upset" at losing out on the house, and were GLAD to have lost it... BECAUSE we had the other house still available, with a much nicer closing date -- 5 bedrooms, beautifully done all throughout to the point that there's NOTHING for me to work on except to plan a deck and pool in the (small) back yard.

The way this whole deal went down left a bad taste in my mouth though.  Pricing low, and "demanding more money" is dirty.  If my agent suggested that I do that, I'd fire him.

As it is, I am in the process of putting down some nice bamboo flooring after I get the laminate out... (on his recommendation)

Hey - anyone want to buy a 3+1 bedroom house all upgraded nicely in Chapel Hill???

[shaheed]

Just recently went through the same thing.  They wanted more offers, and waited,out till the evening ..  Bidding war between 4others.  They rejected everyone's offer and asked us all to resubmit ...!!  I assumed they'd pick the best out of the 4!!  We held our ground and said only condition on inspection, and up'd the price 5grand, and got lucky and got it.  The other ppl offered more but had more conditions.. The owners wanted out fast, and were greedy.  Brutal system for the market...brutal..

[yellowtang]

Funny u came up with that topic.
For the last 6 months I've Been looking for a house..
First time home buyer, however the hunt has not been easy
At all... Even with the required 20% Down payment it had not
Been as easy as I was told to believe.. Everytime I see a home
I think I can make an offer on .... There are 3 to 4 other buyers,
Thus increasing the value of the house.
I am beginning to loose hope on getting a home I can really
Afford....

[jon1985]

I cant beleive how the house market runs.  My buying experience wasnt to bad as Im in a small town so the agents are fairly friendly and helpful because everyone knows everyone.  I have a friend who just bought in ottawa and I would have gone nuts.

yellowtang, I know how you fell.  I bought only a few months before the 20% downpayment came into effect or else I would have had a very hard time getting into a house.

[rgauvin]

Some of it is the realtors, some of it is the sellers. The realtors only make suggestions, the sellers make the decisions. Ever since HGTV started carrying first time home buyer shows or house flipping show, everyone thinks their Donald trump. buyers make ridiculously low ball offers and sellers do everything they can to encourage a bidding war, then turn down all offers asking for more $.

The reality is realty SUCKS.

[Greatwhite]

The house I'm in now is perfect for a first time buyer...  It's actually a rare find in Orleans... MOVE-IN READY.. With new bamboo floors going down in the next couple days, just redid the bathrooms with travertine and Thomasville cabinets...  HUGE back yard... And I have a built in aquarium stand that will hold a 48" tank nicely.

This multiple offer stuff is nuts.  When I list it, I will put my asking price - and accept the first reasonable offer.  If it comes down to a bidding war, OVAS members get a 10% discount.

[exv152]

Maybe wait until the feds begin the real layoffs, maybe that'll shift the Ottawa real estate market into somewhat of a buyer's market, but given there already is a shortage of homes, and the feds plan on laying off gradually over the next three years, that may be slow in the making. I also think the home prices are a bit high right now and are due at some point for a minor adjustment.

The other option is to buy new, no haggling, no price wars, full warranty on the home, longer to go before needing to replace shingles, windows etc, better furnace, water, hydro and gas efficiency, and you're not buying someone else's DIY projects.

[Greatwhite]

The house I'm looking to buy now is 3 years old, so still warrantied and untouched by "unqualified renovators".  It's a beauty..

[Hookup]

we just bought a place... grapevine and no agents from either side.  It was my first time as a buyer without an agent and it went smoothly.  

Here are somethings that have helped us de-stress the buying situation.
1) know what the place is worth to us.
2) never going after "getting a deal", but always negotiate for one.  
3) being ready to make an offer on the spot.

Sorry to hear it's so rough out there for all of you.  Buying a house is supposed to be fun and exciting, not stressful.

[Hookup]

Maybe wait until the feds begin the real layoffs, maybe that'll shift the Ottawa real estate market into somewhat of a buyer's market, but given there already is a shortage of homes, and the feds plan on laying off gradually over the next three years, that may be slow in the making. I also think the home prices are a bit high right now and are due at some point for a minor adjustment.

I too share this point of view and concern.  My wife was looking for an upgrade house (toying with the idea more than really looking) and we agreed that the 400k+ houses are the most likely to take the biggest property value hit in the next 5 years.

[JetJumper]

we just bought a place..

Does this mean a new tank?

[Greatwhite]

we just bought a place... grapevine and no agents from either side.  It was my first time as a buyer without an agent and it went smoothly.  

Here are somethings that have helped us de-stress the buying situation.
1) know what the place is worth to us.
2) never going after "getting a deal", but always negotiate for one.  
3) being ready to make an offer on the spot.

Sorry to hear it's so rough out there for all of you.  Buying a house is supposed to be fun and exciting, not stressful.

The problem with Grapevine and other "name your own price" deals is that people don't really know what their house is worth.  They see what the other houses in the area LISTED AT, not what they sold for.  So when a house is listed at $450k, and it sells in a week, they assume it sold for that much.

A nice house down the road from me was on Grapevine, and it was listed at $419k and sold in a few days.  She was definitely aggressively priced, because I think it was even a ravine lot.  Turns out an agent was involved with the buyer, so they got the sale price (normally agents can't see grapevine deals)... It sold for $408k in the end.  NOW, they are doing some foundation repairs before the closing date!

An agent has access to YEAR AND YEARS of data in the area.  They can see what the houses actually sold for, and can come up with a much more reasonable number.

But nowadays, people are getting smarter and have access to the internet and can see better how to price their houses, and buyers can do their research accordingly and can "guess" at what the house is worth.  Making an offer on the spot is always good for sure!  Don't go into buying a house that is at the top of what you can afford.  Always leave a little room to go up, and then don't be afraid to ask for inclusions like appliances too!

Unfortunately, people always think that their house is the best house ANYWHERE and assume that it's worth more than it is because of some upgrades, etc.  I completely gutted both upstairs bathrooms last summer and spent the winter refinishing them with top quality materials.  We did the windows, roof, new furnace, landscaping, new carpets -- and the agent said my house would probably sell for $425k - but would be $10k (or so) more if I had hardwood instead of laminate.

Well, I'm interested in selling this place quickly once I make a deal on another house - so I just bought $2500 of bamboo flooring and am installing it now.  There is NOTHING to do with this house once I'm done with the floor except maybe change the kitchen counter top...

If I priced the house the way I thought it should be, I'd be asking $450-$475k for it, and it'd be on the market for a long time.  So we're pricing it FAIRLY and aggressively, really, hoping for a quick sale.  There are not many lots in Orleans that are 125 feet from the gate to the back fence with no rear neighbors....  Hopefully that sells the house.

I'll post my MLS in the classifieds here when I have it listed.

[Greatwhite]

By the way - never phone the name on a sign when you are interested in seeing a house.  If you are interested in a house that has an agent selling it, find another agent and get him/her to work for you.  When we bought the house we're in now, 7 years ago, we phoned the listing agent and he ended up with a double commission out of the deal. 

There is a serious conflict of interest in this situation in my opinion.  You can't tell the realtor anything like "I'd pay up to this much money, but I want it as cheap as possible", because he also knows what the seller wants.

I am loving this "having my own personal agent" thing this round.

Oh, if anyone wants a great agent, PM me and I'll send you his details.  My guy has me hooked up on a regular email system where I see any changes in listings in my criteria before MLS sees them.

[Hookup]

The one thing is asking price is just that.   Learning from both mls.ca and others gives you a good feel for what is available... and things that are miss-priced don't sell, so asking price is a good gauge, if taken with common sense.

Determining what you are willing to pay for a place is the buyers responsibility, and should not be the agents.  Why would you let someone who is commission based talk you into a price?  Every time i've used an agent, they show current comps, not the past 10 years etc cause prices change over time, etc..   They do show what things have sold for (on mls.ca) which can help for sure.

All consumers are different.  Some people read everything available before buying a car, test drive everything and compare depreciation values with new prices and year over year maintenance costs... some people buy their car because they like the color.  Nothing wrong with either approach, just different strokes for different folks.

[Greatwhite]

Determining what you are willing to pay for a place is the buyers responsibility, and should not be the agents.  Why would you let someone who is commission based talk you into a price?  Every time i've used an agent, they show current comps, not the past 10 years etc cause prices change over time, etc..   They do show what things have sold for (on mls.ca) which can help for sure.

Oh, I agree full well that it's the buyer's decision what they will pay.  However, in the cases where the same agent is representing the buyer and the seller, the buyer can't say "well, I'll offer this much now, but would be willing to go up to this much" because the agent will then go to the seller and say "this is the offer... and they'll go higher"

Yes, the agent signs contracts saying that he'll work in your best interest, but there are shady people out there.

When I had my agent come up with a ballpark number for me to sell my house, he looked at comps in the area currently.. There are none.  He went back to last year and got a couple, and then I think the year before.

They have metrics... Each year, the average selling price goes up a certain percentage... since I bought this house 7 years ago, it went up 3%, then 4%, then 4.5%, then 3% then 7%... etc etc...  Running the original sale price into that formula, he was able to come up with a number that represented the "approximate value" of the house today if we did nothing to it.  Well, we updated about $100k around the house...  So we added 50% and came up with the $425k number.

Using the same metrics, you can see what a house that sold last year might sell for this year, so you can use that number in deciding a reasonable asking price.

Note that I say "might" and "approximate" because - there's no telling what the house will actually sell for.  An asking price is a starting number, the sale price could be above or below that price...  Once you start getting emotional during the deal making, numbers go up up up...  Some agents bank on emotions (like the lady who we dealt with last night)...

I saw a listing that said "asking price, $589k.  Or buy it now for $624k"... Someone spent too much time on ebay.

[garnpet]

The market in Ottawa sort of defies all expectations.  Even with the tech melt down years ago prices were still going up.  I assume that the impending federal gov't cuts will have the same non-effect on lowering prices.

People for some reason have money to spend on housing these days.  Huge mortgages are the norm, and being house poor seems to be "in fashion."

Greatwhite, as for your dislike of the process, I can agree with your situation.  Most of the deals are not like yours.  The people on our street who have gone the route you mentioned (entertaining multiple bids at once) always seem to have been very up front about it.  They have clearly stated that the house is available for viewing during a certain time and then offers are accepted again at a later defined date.  Hopefully yours situation was just an anomaly.

People are willing to pay above asking price just to get into a house in certain neighborhoods, and buyers, rightfully so, can take advantage of this.  With the money involved you'd be crazy not to if you have a house in a fast moving market.

The last two sales on our street made my head shake.  Both went for above asking price and both went in a day.  I'm not talking about small deals either - one was $995K the other $750K.  The crazy part was they both sold the same week and by the same agent.  Someone is having a good year.

[Fishnut]

I have so much to comment on in this thread!!  For those of you who don't know, I'm a Realtor.

First thing's first...BUYERS NEED TO SIGN A CONTRACT!!

I completely agree with the comment about calling the agent on the sign in front of a house.  That agent should be asking qualifying questions to everyone who calls and is not represented by their own agent.  We have to do this to prevent our sellers from spending time polishing their house and leaving it for a showing to someone who has no business even looking at the house.  ALL of these qualifying questions can screw up the negotiating power of an un-represented buyer because there is no contract in place at that time.  Here's why...

Sellers sign a contract with an agent to sell the house.  everything that agent learns about ANY potential Buyer MUST...and it says this on the contract...MUST be shared with the seller.  Buyers sign a contract and the same applies...anything that is learned about the seller MUST be shared with the buyer.  So, in a situation where an agent is representing both buyer and seller and say both parties are under contract, that means the agent can't say anything during negotiations.  The agent must physically give both parties all the information they need to make their own decisions but there will be no coaching, no opinions and no advice.  Full commission for making sure papers are signed on time and in the proper places.  I hate it.  That's not what we're hired for.  If there is a situation that comes up where someone feels cheated, there are contracts in place that can be brought to the attention of The Ottawa Real Estate Board, CREA and a lawyer.

Now...as for the shady agents.  Yes, there are some shady ones out there...omg, I've met my fair share.  However, the situations that have been described here are not the makings of shady agents.  They are the reality of how houses are sold.  From the prospective of a buyer, those situations suck, but if you're the seller and this happens, WOW!!  Don't forget, agents are under contract to get the best possible price with the best conditions and in the shortest amount of time.  That's what these agents have been doing.

From Hookup: "Why would you let someone who is commission based talk you into a price?  Every time i've used an agent, they show current comps, not the past 10 years etc cause prices change over time, etc.."

People should never be talked into anything.  Agents sell more houses in a month than some people sell in a lifetime.  With that comes a much deeper understanding of the market and the tolerances for offers than most people.  In that respect, the advice we give has nothing to do with our paycheck...or at least it shouldn't.  We know other agents in the market, we know how they operate, we have an idea of what will happen when we see certain houses pop up that are priced very competitively and we can act accordingly.  Clients make their own decisions all the time, taking into consideration the advice that we have provided.  Sometimes, the client doesn't listen sometimes they do.  Greatwhite sounds like he listens!!

Ottawa is a great place for Real Estate.  We don't go through the ups and downs of other markets.  The last time we had a dip was the 90's when the feds laid off lots of people.  Despite the high interest rates and all the lay-offs, this dip wasn't even very big.   It has been taking more time to sell properties over the $450 price point, unless they happen to be in an extremely sought after area.  The places that are selling like hot cakes are the places in the $300 - $400 price range.

If anyone wants the actual market stats, I can get some screen shots from the real estate board to post.

I'll also comment on the private sellers/buyers.  This can and does work.  If people are savvy on both sides and trying to keep the emotions out of the deal, it's good.  There are risks...first, private sellers are not bound by all the rules and regulations regarding honesty, disclosure and ethics that Realtors are.  They can lie and get away with it.  We can't.  If you want to buy a privately listed place without an agent, do your due diligence and get the help of a lawyer.  Never approach a private seller casually.  Making an offer on the spot IMO isn't smart.  How are you able to do that?  An offer is not valid in the eyes of the law unless it's on paper.  What of you make a verbal offer, the seller agrees, then on Monday while you're at the lawyer's getting the paperwork done up, the seller accepts another offer because it was already on paper?  Too bad so sad.  The seller just used your verbal as bait to get a higher one.  Agents are not allowed to disclose the contents of an offer to ANYONE other than the seller.  Buyers who buy privately will often have an appraisal done before their lender will approve any mortgage, adding more cost to the deal and I've heard of some lenders adding extra red tape to the whole thing because it's a private deal. 

I don't remember who said it but realtors CAN see grapevine sale prices.  We have access to the land registry so if a property sells we know exactly what it sells for.  It's not instantly like our internal system but we can see it.

[Leucotome]

Buying/selling a house is incredibly shady.

No matter what your agent tells you, their interest is you selling/buying as soon as possible. They have bills to pay. The more they "help you" find the right deal, the less money they are making/hour and the less they have available for their bills next month. This is why they will push you towards things that are not in your best interest.

I absolutely hate sales strategies: "tiny" becomes "cozy", dilapitated becomes a "fixer-upper", etc.

The moment an agent uses any of those words - I say goodbye.

I bought my first house 2 years ago, and took my time doing so. I went through lots of agents until I finally signed on with one. I feel as though I got a good deal, but who knows, really?

Also, to whoever posted about being added to an automatic e-mail list - don't kid yourself, they ALL do this, I had 3 separate agents do it for me 2 years ago, having met/spoken to each for a total of about 15 minutes.

They ALL WANT you to think your interests are their #1 priority.

[sas]

To clarify a point anyone can access the land registry office.
It's a great way to find out the history of a house.
We bought a 175 year old farmhouse years ago and just recently a cottage
and it's great fun researching properties.

[Leucotome]

http://www.imdb.com/title/tt1152822/

Disclaimer: I don't fully agree with everything in this documentary, however their analysis of real estate interests is good imo.

Edit: Posting from work where this is blocked, so hopefully it's the right clip:

[embed=425,349]http://www.youtube.com/watch?v=17jO_w6f8Ck[/embed]