Frustrated, almost had a deal, and then they claim they got a cash offer

58 Replies

Property was purchased at auction like 2 months ago by some real estate agent at $86k (great deal, huh) who "Manages" a property company and is also the listing agent for the property I want. I called the listing brokers agency yesterday, spoke with an agent and worked out a deal. List price is $129k, I offered $110k, the listing agent, who is the manager for the company who owns the property came back and said we have a deal at $115k, and I was fine with that and told my agent to send me the offer contract. This morning I call to verify if there are any HOA fees and my agent tells me that the seller is taking an all cash offer that is higher than mine. (Which is just stupid). Anyways, how the hell am I supposed to buy my first house with these kinds of stupid road blocks all over the place. My main problem is finding an agent who can manage to keep in contact with me long enough to make an offer. I call them, email them and tell them I am ready to make an offer and they disappear! Ridiculous! I must have tried 10 times over the last year to make an offer and it never goes anywhere, the agent I call never gets me an offer contract and either I am too frustrated to push on or the house gets sold or something.

I am assuming this is a home you want to live in correct?  The numbers are not good enough for a flip so I just wanted to confirm.  

Dont get too frustrated, there are plenty of homes out there.

Medium buymemphisnow stacksCurt Davis, Buy Memphis Now | [email protected] | 605‑310‑7929 | http://www.BuyMemphisNow.com

Oh and did I mention what BS the auctions are, especially for me who wants to buy a property out of state 1200miles away. First you need to have a 5% deposit ready, 2nd you have to pay full price cash on the Sale day (which is the Auction date), not only that but most banks bid a ridiculous amount and most houses are "sold" to the plaintiff (bank).

So how am I supposed to buy a property if I cant fly there every week and see each and every listing, and if I bid and am lucky enough that the bank doesn't care and sells it to me for what seems a great deal (but the house could be likely torn apart) I don't even know what I am buying. Ughhh

No, it would be my first investment property. Technically I will buy the first one as a second home. Renovate it myself (should take me a month or 2) and then I would rent it. I would prefer to get a mortgage on it right away rather than paying cash up front, because I do want to buy many houses and need as much as my cash available as possible. Although, I have the ability to get loans by other means, I would prefer to hold out on that until I finish a deal or 2.

The property is a decent property. Its zestimate from Zillow is $160k. I would say that I can even flip it in rentable condition for $150k within a few months. The listing agent did post that it needs a complete remodel, but from further information its only the interior that needs remodel, floors, kitchen, bathrooms, walls freshened up, etc, which I can do myself easily. I know that area VERY well, even though its 1200miles away, I have family there and have been wanting to buy rental properties there for the last 5 years unsuccessfully. LoL

I could get a tenant in the next day for $1000/month. Average rents for similar size are $1400-$1500, there are a lot of odd balls asking for $2500 for some reason, but I think those are mostly for seasonal tenants and the houses are furnished...

Originally posted by @Martin S:

Property was purchased at auction like 2 months ago by some real estate agent at $86k (great deal, huh) who "Manages" a property company and is also the listing agent for the property I want. I called the listing brokers agency yesterday, spoke with an agent and worked out a deal. List price is $129k, I offered $110k, the listing agent, who is the manager for the company who owns the property came back and said we have a deal at $115k, and I was fine with that and told my agent to send me the offer contract. This morning I call to verify if there are any HOA fees and my agent tells me that the seller is taking an all cash offer that is higher than mine. (Which is just stupid). Anyways, how the hell am I supposed to buy my first house with these kinds of stupid road blocks all over the place. My main problem is finding an agent who can manage to keep in contact with me long enough to make an offer. I call them, email them and tell them I am ready to make an offer and they disappear! Ridiculous! I must have tried 10 times over the last year to make an offer and it never goes anywhere, the agent I call never gets me an offer contract and either I am too frustrated to push on or the house gets sold or something.

Cash is and always will be king! Find a money partner so you can bring cash to the table in lieu of financing. You can always refi later. Otherwise you will keep losing out, com'on you're in NYC. 

If you're that frustrated because you can't see the properties that are 1200 miles away and you don't have someone on the ground that you trust there then put that on the back burner for now or find someone in those housing markets thats on the ground and can operate in your best interest when you can't be there. Every auction in every city has similar protocol as the one you stated, that's the way it is.

Kudos,

Mary 

But it cant even be true that they got an all cash offer higher than mine. Seriously, what all-cash investor would purchase it after its been listed for over a month on Zillow/mls, for more than $115k, when the seller who is a real estate agent who listed it AND the "manager" of the property company which owns the property who purchased it at $86k 2 months ago... Ok, Ok, I do know there are some stupid investors out there, I saw a guy in a NYC auction go from $2million to $3 million for a building that needs to be tore down and the bank maxed out at $2.01million, and everyone else already backed out, everyone choked when they heard his bid, lol, and no it wasn't proxy bidding where it goes up incrementally over the last bid, he paid that much!

Usually all cash investors are low ballers, and they run around and make 50 offers at once. Which is what I would expect. So I'm betting there is no deal or it wont go through, and this is just a tactic to get me to go up closer to asking at $129k which wont work. In a week or 2 I will check the status and call back, perhaps with a different RE agent to make the same offer at $110k again, and if they piss me off again, I will go down to a $105 firm final offer, then move on...

Just FYI, I'm working with another agent for another property which I am VERY interested in as well. That agent is slowww, wont answer calls, asked for my ID and utility bill for me to be able to submit an offer? Huh???

Just now I found another home I really like as well, and I called the first agent I worked with to make that $115 offer ( she works alongside that "manager" guy, so maybe this will get his attention and he will cut the BS.), so I told her I found another house I like and I would like her to make an offer for me, (since she was pretty quick to get me an offer contract last night). She asked for the MLS number and said she will research and call me back in 15...

I would buy all 3 houses if they accept my offers.

She got back to me, gave me some more info. I said all good. She said she will email me offer contract soon. Not bad, that's what I like, I like someone who will get the job done right away, not go for a vacation in the middle of the day while someone is trying to buy a house.

You're making a lot of assumptions here, and causing yourself frustration due to them. One being that cash offers are necessarily lowball (they're not), another that someone else wouldn't choose to offer more than you (they might), or that a new buyer would necessarily be swayed by the fact that the current owner got it for a low price (why should they, if it's a deal that meets their criteria?) And if auctions didn't have those restrictions they would end up circling around and around with unqualified buyers who didn't have the means to get the deal done quickly -- and that's the point of selling at auction, to get the deal finished and done with as little fuss as possible.

If you are serious about buying a property in that area, find yourself a good buyers agent who is willing to work with you. If you just call the listing agent in each instance you'll waste a lot of time. Because yes, they will want you to prove to them (each time) that you're a legit buyer. Listing agents get calls from people all the time who say they want to buy but don't have the capacity, so they're bound to have some skepticism.

Medium team zen logo vJean Bolger, 33 Zen Lane | http://www.solidrealestateadvice.com

@Martin S.  

Definitely sounds like you need to find the perfect buyer's agent - have you considered yourself for that job?  Get a license and then you control the speed of the offer, viewing of the property (although from what I'm reading, it sounds like you are comfortable making offers without seeing the properties?), etc.

Hi Martin. 

I am in Brooklyn and pretty active. Nothing you described sounds out of the ordinary. The only thing, that is surprising is the numbers you're throwing around. I have not seen anything in Kings County with an upset price less than 300k in years so not sure which auctions you are going to. 

Another thing to consider: much of NYC real estate is used by foreign investors as a way to hide assets. With the view they are going to have a different cost/benefit analysis. 

Finally, Cash is going to do it. People are bidding in the million plus range in all cash. 

If you want, feel free to reach out directly. I know the market well and could offer some advice on areas to look for. 

Wouldn't I have to live in the state that I want a license?

Yes, as long as I can put an inspection contingency in the contact, I have no problem flying out the next day once I get an offer accepted (I have tons of miles from my credit cards)...

And like I said before, I know the area, family lives there and I've been searching properties there for 5 years. Prices seem PERFECT for me at the moment.

@Martin S.  Don't know about specific residency requirements but it probably depends on the particular state.  I have no direct knowledge but I have heard on many occasions of agents who are double/triple licensed in border states (NY, NJ, PA).  If you post what your hunting grounds are, someone might be able to chime in with specific info

No I'm not buying in NYC, the prices here are wack. I live in a 611sf studio worth $1mil, would rent for $3k (would be negative cash flow for an investor). Unbelievable! Purchased by my mom 8 years ago just over half what its worth now, and paid off already.

Even in the ghetto the prices are stupid. Some of the worst neighborhoods to raise a family, where there are gun shots daily and nightly, and murders, killings, impalement, robberies, even kidnappings with hostage situations! The prices are not that much different from decent neighborhoods. Just look at Coney Island, lol, Yes I grew up there, $400k for a foamboard townhouse (with seawater stains, and even the occasional piss stains) that will likely rent for $1500 MAX = Negative cash flow. Maybe you can get a deal in Staten Island, but who wants to drive over that $15 bridge every day, ok its $8 for residents... And we have a house in Staten Island anyway, we had enough of the driving and the boredom that we moved back to our Co-op in Bensonhurst like 14 years ago, and even managed to rent out the house for just over breakeven cashflow to a friend who still lives there today and pays rent on time, house paid off now and we even upped the rent, lol...

I'm looking in Sarasota, Florida, if your an agent that can work with me, and not be slow, or if/when you are busy at least let me know and not ignore me, then let me know... I don't call often, I prefer email, or even text. I can shoot you addresses and offer prices, and you can email me offer contracts, I sign, send it back and we can do 20+ deals in 1-2 years ;-)

Just show the agents your bank statement, and they might take you as a serious buyer?


Joe Gore

Now the agents are just totally retarded. This other property that I was working with another agent with, wants 2 forms of ID and a utility bill for him to be able to submit an offer. My wife wouldn't agree until I asked her if I block out the DL number. So the agent called me and said it would be fine, and now he emailed me that it wont be fine and that I should look for another agent because of all the fraud in Florida! No DUH SHERLOCK, you want me to send you our drivers licenses, and you are talking about all the fraud in Florida, how wonderfully stupid in all aspects.

Anyways, I either need another agent, or perhaps tell the first agent I was working with for that $115k house that I want to make an offer on another property, and of course if both offers are accepted, I'd take both... What do I do?

We have our money a little split up. $70k is the highest in one bank, is that good enough?

People don't get mortgages on 2 separate second homes at once do they?

@Martin S

I think you would have better luck if you sat down over a cup of coffee with the agent so you can explain what you are looking for and let the agent know you are serious and not have the agent chasing deals where you will be making low ball offers and never close. You could have to spook the agent for them to ask for a copy of you DL with unnecessary questions.


Joe Gore

This post has been removed.

And you think we like all these Floridians here in NYC? Every time I'm driving behind a Florida plate, I cringe, and want to run em over with my big SUV for driving so bad.

I never said I was going to live there, at least not now. NC is actually my next stop if everything goes to plan, I just like the real estate there and vacationing there.

And I don't drink coffee, coffee is really bad for you!

I'm not even making low ball offers, I'm actually making very reasonable offers just above the lowest price I believe these sellers would actually go for if they were serious sellers. Like I said, I've been watching Sarasota real estate for the last 5+ years. I've seen asking prices and selling prices all the time and look at comps all the time and I've seen houses sell for less than I was willing to pay many many times, actually all the time except for the last 2..

And when they don't like my offers, they don't sell, end up rehabbing and then selling later for about the same as I was offering. DOH!

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