Dual Agent is also listed the home price (obviously)

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Dual Agent is also listed the home price (obviously)

Harrison Chiu
New York City, NY · Member since 2016 · 10 posts · 1 vote

Hi BP,

Long Story Short: 

I saw a property that was listed for $230,000. It already was under contract, and then the deal fell through, so I went and checked it out. I liked it. The listing agent is also the one that showed me the property,

Because I'm a newbie, under pressure, I offered $200,000 for it. After a brief back and forth, the offer is at (surprise) $215,000. 

After that, I went home and did some more research and it seems that from a comp point of view, the fair market value is around $200,000. I don't believe that this area will appreciate greatly.

I asked the dual agent how the listing price came to be, if an appraiser did it, and they said that they listed it themselves with comps. I had seen comps they sent me and disagree with the list. After my own research, that's how I reached the FMV of $200,000.

My question is:

How bad form is it going back to the dual agent and offering lower than my original offer? (I feel very dumb)

I disagree with they assessment and as dual agent their only role is to be a communication channel they said, though they did hint that the original offer was close to the asking price (which I seriously doubt and that's totally not impartial).

Thanks,

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Andrew Johnson
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
9y

@Harrison Chiu So take my feedback as a grain of salt.  Realtors (dual agent or not) always list based on their selected comps.  If you choose different comps then you'll come up with a different value.  Appraisers are either supposed to be neutral or look out for the interest of the bank (lender).  I can't recall a seller ever going to an appraiser (they aren't free) before listing a property.  Reasonable people can disagree on the value of the property.  It happens all of the time.  So, given that, you are where you are today and the "how" doesn't really matter anymore.  

What it sounds like to me is that you don't want to pay $215K.  So don't.  You haven't mentioned any earnest money so it sounds like there isn't much to lose.  Sure, you'll damage the relationship with the realtor but it doesn't sound like (in this scenario) you really trust their judgement to being with.  I certainly wouldn't make a habit of doing this but it's better to feel dumb than overpay.

You will, however, likely kill the deal and any shot at the property.  Maybe you won't, maybe they'll come back to the table, but if I were in your shoes I'd plan on the deal being dead with your move back to $200K.  If you're comfortable with you, you have your answer.  I wouldn't want to *hope* than an appraisal comes back lower and try to use that for leverage down the road.  Others, of course, may disagree.

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  • Nick G.
    Investor · Moorpark, CA · Member since 2016 · 248 posts · 191 votes
    9y

    @Harrison Chiu Yeah, things can be tough with a dual agent. At the end of the day, you're in charge, so do whatever you want. Always do your own research, like you have, and trust in it. Go back and offer them less, who cares? What's the worst they can do, say no?

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  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y

    @Harrison Chiu So take my feedback as a grain of salt.  Realtors (dual agent or not) always list based on their selected comps.  If you choose different comps then you'll come up with a different value.  Appraisers are either supposed to be neutral or look out for the interest of the bank (lender).  I can't recall a seller ever going to an appraiser (they aren't free) before listing a property.  Reasonable people can disagree on the value of the property.  It happens all of the time.  So, given that, you are where you are today and the "how" doesn't really matter anymore.  

    What it sounds like to me is that you don't want to pay $215K.  So don't.  You haven't mentioned any earnest money so it sounds like there isn't much to lose.  Sure, you'll damage the relationship with the realtor but it doesn't sound like (in this scenario) you really trust their judgement to being with.  I certainly wouldn't make a habit of doing this but it's better to feel dumb than overpay.

    You will, however, likely kill the deal and any shot at the property.  Maybe you won't, maybe they'll come back to the table, but if I were in your shoes I'd plan on the deal being dead with your move back to $200K.  If you're comfortable with you, you have your answer.  I wouldn't want to *hope* than an appraisal comes back lower and try to use that for leverage down the road.  Others, of course, may disagree.

    1Reply
  • Matt Shields
    Broker · Phoenix, AZ · Member since 2015 · 351 posts · 273 votes
    9y

    Be very careful in dual agency. While the agent is supposed to represent both parties fairly, ask yourself who is paying the agent? Two other things. The higher the price the more money the agent makes. Also, since the agent is getting both sides of the commission, can the commission be negotiated? 

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  • Harrison Chiu
    OP
    New York City, NY · Member since 2016 · 10 posts · 1 vote
    9y

    @Nick G. 

    @Andrew Johnson

    Thanks a lot for the responses. What a difference hindsight makes. If I just chilled out a little and waited AFTER I did the research, this $165 I'm about to throw their way might seem like a calculated offer as opposed to an insult... But yeah, what's the worst that can happen...

    Thanks again, lots of learning to be done. 

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  • Jeffery Waicak
    Investor · Massillon, OH · Member since 2015 · 266 posts · 156 votes
    9y

    I wouldn't back out. You agreed to the price, they agreed to the price it's a deal.  

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