Missed another deal. Advice?

Question

In my area, deals are few and far, so its best to not miss any.

This is the last one that closed just last week.

Singly family house was on the market for $120k with nursing home getting proceeds from their patients home.  I know the realtor personally and I said nice house, needs work, would they take 60?  She told me no, it can't ever go that low due to the nursing home lien. I took her word for it, so i let it go.
	 
	 8 months later, it closed for $40k with asking price of $120k still.  I asked her what happened, I thought it couldn't go lower.  She said, oh, it has a mold problem and the roof leaks.  She sort of just shrugged it off when I asked why didn't she tell me about it ( I see here twice a month for other reasons).   I would have paid 60+ easily.

I guess my question is, how do you keep yourself on the top of realtors "call" list when things get cheaper? She already knows I'm a cash buyer and never do any type of inspections or appraisals.

My only thought was to nonchalantly mention, "of btw, if you ever see a house drop into my price range, i'll throw and extra grand, or 5k under the table if we get it to close.
	
	I dont' want to insult any realtors either......advice?

Shaun Reilly · Answer

I agree that you should have put in an offer and that you probably should have followed up after it had just been sitting so long.

However my big takeaway is that I would never want to use this Realtor for anything.  As a seller I'd be livid if my agent had a verbal 50% higher than the offer I was considering taking and never even follow up with that person.

Also the fact that she didn't think anything of it when you asked means she doesn't care at all about you and working with you for mutual benefit.

Bryan L. · Answer

@John H.  - My advice.  Take control of your business and your ability to feed your family by becoming a Realtor yourself.  Until then, have your Realtor friend set up an automatic search and email to you from her MLS account.  Actually, I think you can do it yourself at Realtor.com, but that site is delayed by a couple of days.

Rick Baggenstoss · Answer

@John H. I think you lost a deal but learned a few valuable lessons for free.  :-)

JScott's on to the critical ones which that your team shares in your successes but you own (or take ownership of) the failures.  With this perspective, you'll engineer your business to eliminate these small, annoying failures.

For example, if a house is on the market for 90 days plus, or comes back on to the market after being under contract, dig in and find out the issue.  Some issues you can address very profitably.

"Houses don't drop into your price range."  As you've seen here, they are marketing outside of your range, hoping for their price.  You have to drag them into your price range and only you (or your competitors) can do it.  Some pictures and description of the leaks and mold would have been a nice accompaniment to your offer.

Thanks for reminding us all of this important part of the business now go make some aggressive offers.

Rick

Matt Devincenzo · Answer

I agree with @J  Scott on this one. You said it was still listed at 120K eight months later. That in and of itself should have been enough of a reason for you to submit an offer because as DOM increases, so does motivation and sales price starts to decrease. Maybe your realtor friend could have mentioned the other problems earlier, but you could have approached the sale price again when it sat for an extended time and put in an offer.

J Scott · Answer

Remember, no matter what happens, it's YOUR fault...if you go in with this attitude, you'll make better decisions...

Here's what YOU could have done differently:

- Clearly, you didn't find the mold issue and roof leak.  Why not?  Did you inspect the house thoroughly?  Or did you not even bother to walk the house?  Regardless, had you found the issues, you may have gotten your price.

- You didn't follow-up with the agent.  Sounds like the agent represents the seller, not you, so you can't necessarily expect the agent to follow up with you (though she would have been smart to).  You need to follow-up...put a reminder on your calendar to call the agent every two weeks until you get the deal or someone else does.

- You didn't write up an offer.  Asking someone if they'll take a certain amount isn't the same as presenting a written contract.  For one, it sounds like the sellers never even heard your offer (and the agent had no obligation to present it because it wasn't in writing).  Had you written it up, it would legally have had to be presented.  Second, when you present something in writing and signed, there is now an emotional attachment to it...it's tangible...they can see it and feel it and it's tougher to just say, "Nope, not interested."

Jared Anderson · Answer

I see this all the time.  Realtors have buyers in their back pocket all the time. Listing the home on the MLS is just a ruse to the client to demonstrate that it was "marketed."   If you watch the same address in 6-12 months you will find the same realtor relisting it as a flip.  You have to keep in mind what an agent's incentive is.  Is it to keep their constant buyer's happy or some random buyer happy?  The second listing commission will tell you that answer.  I personally think this is a big dirty part of the business; being an agent I can say that.   Who ever the Realtor "represented" just missed out on $20,000.   
	
	The best way I've seen to get over this is to make an offer with the same listing agent representing you as well.  They now have an incentive to take a commission on both ends of the deal.

Andrew S. · Answer

I would cut that realtor off immediately.  She is not representing you in an acceptable manner in my opinion.  Keep her as a friend but fire her as realtor.

Thomas Johnson · Answer

A buyers agent would be your best bet on getting offers in, contracts have so many legalities even with cash offers, the agent/friend probably didn't take it seriously by it being verbal. An investor friendly buyers agent would be a great asset to your business and little to no cost to you.

J Scott · Answer

Very true, but for me, it's even more than saying you're taking ownership of the failures.  Here is what I consider the most important thing I've ever written in terms of running a real estate business:

Controlling Your Real Estate Deals

Missed another deal. Advice?

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