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Tim has much more clearly spelled out what I was ineffectively trying to say: all depends on the house + market.
When we bought (a number of years ago early into the "boom"), we were outbid once by 15% of list (on a house we had overbid on!)... a few months later, the house we actually bought, we paid 20% under the original asking price. The absolute bids were similar + the market was in a state of rapid incline. The only real difference was that the first house was underpriced (for quick sale) and the second house was overpriced (for max return). How one approaches the 2 scenarios, as Tim says, is totally different. I (being fiscally conservative) am personally more comfortable with the overpriced scenario: hammer them with low bids until they break. I get the impression you have a similar bias. Bidding wars frustrate me because they incite irrational spending which I can't do, so someone else (the most irrational, actually) wins! Friends of ours were recently outbid by $90k (on an already not cheap house due for renos)! complete insanity!
I don't see how you can force the selling agent to give you the buyer's commission. You can try to convince them it is in their best interest... you can explicitly write this in the offer as a condition... but there is no way to force the seller to accept. You have to gauge the "hotness" of the property in your negotiations. There are situations where the knowledge a buyers agent provides might save you more than that 2.5% unless you are really on top of the market + negotiating (including the charisma to pull a great deal out of a "difficult" seller/agent). I am certain if I had dealt face to face with the seller/agent in our case, the deal would not have gone through. I'm very stubborn. Our buyers agent was a good "mediator" and we gained far more ground in the negotiations than we gave up while avoiding letting the listing agent lower the list price + attract competing interest.
Also, on some level, getting the right house should be more important than getting the perfect deal. 5-10 years from now, the deal will most likely matter less (assuming you can afford it of course), and the good/bad qualities of the house will most likely matter much more... there is a cost to changing your mind + reselling (another 6-7% of real estate fees)... also note 2.5% on the principal has less impact long term than 1% in the rate if you need a mortgage. Hammer the lenders + get a good rate discount!
James...
posted by 69.63.52...
, Wed, 30 Mar 2011 07:36:53
, Mon, 28 Mar 2011 13:51:03
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