All Forum Posts by: Daniel Vroman Rusteen

Price: $1.2M

Offer: $900k

I had my agent call to see if the seller would accept this price because it's been on the market for a year.

The seller's agent said the owner had rejected a $1M offer in the past, but it's been awhile so maybe and asked for a formal offer with proof of funds and pre-approval.

Why?

Why not just ask the seller since they'd already declined a $1M offer instead of having us do more work.

From my perspective, if they want to sell, they have a verbal offer they can accept, and if they don't want to present a verbal offer, the seller probably isn't very motivated.

What would be the point of sending a formal offer in this scenario?

Quote from @Matthew Irish-Jones:

Quote from @Daniel Vroman Rusteen:

I started interacting with a RE agent months ago when I began looking for an Airbnb investment. The agent has been communicative the whole time (something that I can say about 5% of agents in my limited experience) so I'm a fan!

But as I've read more about the process, including a BP published book by Brian Green 'Long Distance Investing', I'm wondering if not only is a RE agent not needed for me, but is likely to work against my favor.

Why? 

First, in terms of negotiating, I have experience buying a home outside the USA and I noticed the RE agent, who I assume was a negotiating expert, didn't negotiate very well. I lost that deal, and ended up buying another home directly from the listing agent. Negotiating is about what words you use, when you say it, etc. Back to today: I got off the phone with my agent, where I communicated how I wanted to present my offer (in summary: if the seller rejects my original offer, I hope they'll make a counteroffer, but if I decline that counteroffer, I will move on to make an offer on the next property of the few I am interested in the market - this is to avoid a back-and-forth and the property had been listed for a year with a 25% price cut in that time). At the end of the conversation with my RE agent, I asked them to repeat back to me how they'll present my offer, and nothing. So then I repeated and the agent still missed some points of how I wanted the offer presented.

Second, coming from the BP book, I am coming in with an offer well below asking as an investor. If I deal with the listing agent directly, they'll get 2x the commission, so even if my offer is below asking, they'll be on my side to get it accepted. Or is that not how it works in reality?

Regarding security with buying the property, I can't say I'm too worried about that. I'll still have a lawyer review everything plus the title company. Or, is this not a good idea?

I feel bad telling my RE agent that I will negotiate directly with the listing agent now after all she's communicated with the listing agent already. Is this a very bad idea? Would the listing agent not want to do business with me because I've done this? Obviously, my agent will not be happy, is there something I can do for her to make her whole?

PS The reason I went this far with my current agent is that I am investing out of state and my rationale was having an extra person out there who could possibly help me. I don't know if the agent would help me, or would be done with me after the close. I'll also have a cleaner, handyman, and anyone else I can form these relationships with while I'm out there.

Thanks in advance with any help and reading this lost post!

 LOL brother.  You asked your agent to repeat back to you?  Sounds like neither you or your agent really know what they are doing. 

A good agent knows the market and provides analysis with rental comps, sales comps, projected maintenance expenses, projected CapEx... The data should be transparent so you can verify what supporting data was pulled.

If you worked with our brokerage.  I would be telling you how many registered offers there were, and what percentile your offer falls into with chances of winning.  If its a competitive situation and you wanted to submit an offer with a sub 20% chance of winning I would submit a verbal offer, I would not waste my time writing up a contract. 

A good investing agent is going to present hard data to work off of.  There are no secret negotiating tricks, low ball offers with love letters, or highly intelligent investors from afar that can win bids due to awesome use of language.  Sellers are sophisticated enough to pick the best offer, they only see the price and the terms, any other negotiating tactics are a waste of time.  

Your agent is very responsive because you may be their only client.  I whole heartedly disagree with everything you said about negotiating.  It has nothing to do with words, or when you say them. 

Thanks for the insight! One point of clarification, I didn't have her repeat it back to me like a child. I wanted to ensure that she understood what I was trying to communicate. Words a crude device for what goes on in our heads, but they're all we've got!

Very interesting about the negotiating. I would venture to guess many RE agents would disagree with you on that. At least, I disagree. I assume(d) they think they are good negotiators, or is your thinking common in the industry that negotiating is null and void, what matters is only the money. In that case, you can text over or email an offer? Makes no difference.

I'm researching title companies (in NY if that matters) and they all have ratings of 2 and 3 stars. I found one with a rating of 4.1 stars.

Is there something going on?

For example, if you check Airbnb's (the company) online reviews whether BBB or the app store, you'll see it's low and that's because a bunch of guests who don't get refunds or hosts who are mad are leaving reviews.

Maybe a better question: how to vet a title company?

Quote from @Michael K Gallagher:

@Daniel Vroman Rusteen I think there's just a general misunderstanding of the value an agent or local expert brings to the deal that you either do not wish to see or simply don't find value in it.  Which is fine.  But unless you are a market expert and know exactly where the neighborhood cut off, and what a tenant in that area would expect etc, then you'll likely have a hard time without an agent or local rep of some kind.  

from your comments above I also think there's a basic misconception/misunderstanding of fundamentally how negotiation works in the open market, and that again is likely an area an agent can help you. But again if you don't see the value and believe the books you've read are enough then have at it.  

PS the book you read is by david greene not brian green, as a point of clarification.  

Re knowing the market, which is one of the reasons (I've read up on that) you'd want a RE agent, esp if not from the area, which I am not, my agent is from about 2 hours away and as the listing is an existing Airbnb for 3 years, I see the prior numbers, and based on that, reviews, and market data, have made an estimate of what I believe it will make under my ownership. I'm not sure if her local expertise would add any value.

Another commenter boldly assumed that I think I know it all, which is not true. I thought that was obvious, and why I am posting to this forum with such detail. I've never purchased a home in the USA before, and I don't KNOW what I'm doing is correct, but I think it is and looking for any clarifications and insights from the good people here.

ps thanks for the clarification on author name! whoops! I'll try to edit after posting this reply if I can

Quote from @Mike Dymski:

I would work with an experienced agent where good negotiating skills were table stakes and that's their value proposition (they do it all day, every day).    My agent has been doing this for 20+ years...I could not do her job as well as she does it nor could she do mine.

 My current agent is part-time...a consideration that I didn't mention in my original post.

I started interacting with a RE agent months ago when I began looking for an Airbnb investment. The agent has been communicative the whole time (something that I can say about 5% of agents in my limited experience) so I'm a fan!

But as I've read more about the process, including a BP published book by Brian Green 'Long Distance Investing', I'm wondering if not only is a RE agent not needed for me, but is likely to work against my favor.

Why? 

First, in terms of negotiating, I have experience buying a home outside the USA and I noticed the RE agent, who I assume was a negotiating expert, didn't negotiate very well. I lost that deal, and ended up buying another home directly from the listing agent. Negotiating is about what words you use, when you say it, etc. Back to today: I got off the phone with my agent, where I communicated how I wanted to present my offer (in summary: if the seller rejects my original offer, I hope they'll make a counteroffer, but if I decline that counteroffer, I will move on to make an offer on the next property of the few I am interested in the market - this is to avoid a back-and-forth and the property had been listed for a year with a 25% price cut in that time). At the end of the conversation with my RE agent, I asked them to repeat back to me how they'll present my offer, and nothing. So then I repeated and the agent still missed some points of how I wanted the offer presented.

Second, coming from the BP book, I am coming in with an offer well below asking as an investor. If I deal with the listing agent directly, they'll get 2x the commission, so even if my offer is below asking, they'll be on my side to get it accepted. Or is that not how it works in reality?

Regarding security with buying the property, I can't say I'm too worried about that. I'll still have a lawyer review everything plus the title company. Or, is this not a good idea?

I feel bad telling my RE agent that I will negotiate directly with the listing agent now after all she's communicated with the listing agent already. Is this a very bad idea? Would the listing agent not want to do business with me because I've done this? Obviously, my agent will not be happy, is there something I can do for her to make her whole?

PS The reason I went this far with my current agent is that I am investing out of state and my rationale was having an extra person out there who could possibly help me. I don't know if the agent would help me, or would be done with me after the close. I'll also have a cleaner, handyman, and anyone else I can form these relationships with while I'm out there.

Thanks in advance with any help and reading this lost post!

They recommend agents and lenders, but there's not even a forum thread dedicated to the lawyers, is there a reason for that?

I am looking for a real estate lawyer licensed in NY as I'll be making an offer on a property in that state (first time).

As backups, I am also looking at Arizona and Maryland and, equally, looking for RE attorneys in those states.

Have narrowed that down to NY, AZ, and MD right now.

I see they provide investor-friendly lenders and real estate agents, but a quick search didn't provide me anything for attorneys. If they do not, will any old RE attorney do? I'm guessing there are subtleties that I'm hoping someone more experienced can share with me.

For example, I got a part-time RE agent (which I've since learned might not be the best idea) from Zillow for a listing I'm about to make an offer on.

I have put in $25,000 in Q2 2023 in their STR 2 Fund. Please feel free to ask any questions.