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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Any real estate buffs?
Question for anyone who is knowledgeable in real estate:
Are there any rules that must be applied in a multiple offer situation, ethically speaking? Or is it essentially just a free-for-all for the seller to get the best price they can?
I'm asking because we are looking to buy a house, and we keep getting stuck in these multiple offer situation where we have no idea what is going on. We feel like we are really being taken advantage of, and we just keep backing out because we don't want to end up paying more than we feel the place is worth.
Are there any hard and fast rules that must be followed, or do we just have to deal with it?
Re: Any real estate buffs?
What specific issues have you been running into? There are a ton of rules when it comes to real estate, but I'm not sure which specific rules you're looking at.
The seller is free to get the best price they can, as long as they have not already accepted an offer. They can have three offers in front of them and negotiate with each buyer and wait until there is a clear winner. We were the lucky sellers in this situation once ourselves.
Well, I guess it is just seeming a little one-sided (leaning towards the seller). I suppose that really depends on the market, and right now it is a seller's market (at least in the area we are looking).
My dad was saying something about the seller having to sign back a price, but I guess that doesn't apply in a multiple offer situation. It is just frustrating to not know where the other offers are at, but I guess we just have to go in with what we are comfortable paying and hope that we come out on top.
why couldn't we have been ready to buy last year - the houses were so much cheaper
Nothing you've posted sounds unethical. The sellers do have to sign the contract they agree to- but they have time to do that, whether it's a multiple offer situation or not. They don't have to sign right away. In the meantime, they are free to wait a few hours for other offers, to counter-offer, and to have their real estate agent contact the buyer's real estate agent and try to work on a larger offer.
Legally, I don't think the seller's agent is allowed to tell you what the other offers are. I'm not 100% sure about that though. I know for sure that a buyer's agent can't tell the buyers what is the lowest amount the sellers will settle for, if they know such a number, or that seller's agents are not allowed to tell the sellers how high a buyer is willing to go, if such a thing is known. Those are confidentiality laws and I imagine that revealing the amount of competing offers probably fits within those laws as well. In any case, they certainly aren't required to tell you, and there would be nothing unethical about keeping those numbers confidential.
I know when we sold, we received an offer from the first person to tour our home. Our agent said that she wasn't going to accept offers until all booked appointments were completed that night, hoping that more would come in. She was right- four people wanted to put in an offer, but two dropped out as soon as they heard they'd be competing against other offers. Two remained. Our agent came over with the two offers, called both buyer's agents and asked them to do better because it was "too close to call", and repeated that step twice more when the offers continued to come in within $1000 of each other.
In the end, we chose a buyer based on personality over price (although there wasn't much of a price difference between the offers). One of the buyer's agents came and presented her final offer herself, and while doing so really chatted us up about the buyers. They were a young couple, expecting their first baby, and were actually waiting in the car outside because they were too excited and nervous to wait at home. My husband and I really felt for them and really wanted someone to live in our home who loved it, and since we'd already gotten so much more than we had hoped to sell our home for, we picked them. After we signed the paperwork we invited them inside to meet them and I'm really glad we did, they were such sweet people it makes me happy to think of them living in our home that we loved. If you do find yourself in a multiple offer situation, that might be something to consider- play to their sympathies instead to their wallet.
Annabelle - thanks so much for that. It is good to know that other people have experienced this, so we know we aren't being played just because we are newbies to this. Our agent does try to play up that kind of stuff for us, but we usually give up once we reach the maximum price we will pay.
Janie - that is exactly what is happening in our neighbourhood, and we cannot stand it. It does seem super sleazy, but if it is legit then what can we do about it? I guess you can't really blame the seller though for trying to get the best price they can.
There's some information here:
http://www.reco.on.ca/ConsumerInfo.aspx?section=CompetingOffers
This is for Ontario. If you're not here, they won't apply as each province has it's own regulatory body.
Basically, there is nothing to keep the sellers from doing everything in their power to get the highest price. There are some disclosure requirements for agents, but not many. It's a competitive market right now and it sucks for buyers
Thanks CBL - I am in Ontario so I will have a look.
I know it sucks, and it sucks that we weren't ready to buy last year. We really want to get our life started though. C'est la vie!
That was really helpful CBL, and it looks like a great site for future reference. It seems that what we are experiencing is normal, and we are doing the right thing by backing out when we no longer agree with the price.
Hopefully we will have some luck soon.