I have been looking at two flats with my real estate agent, and I am not sure if everything that is supposed to be happening actually is. This is my first real estate transaction, and I am working with a friend of my aunt's. Recently I looked at a two flat in Englewood, Chicago, which was listed at $160K. One of the units was vacant and had been very recently rehabbed with new stove and fridge, but we hadn't seen the other unit yet, nor had we seen the basement. It has been on the market for months.
When I asked about the price, she suggested 155K, and we started the paperwork for making an offer, and she put me in contact with a lawyer and a home inspector. The lawyer sent me out a contract, but I haven't signed it yet. Yesterday, my agent and I got in to see the unit that is rented, and it is a mess. It is really really cluttered, an elderly couple has been there for what looks like decades. In one bedroom was a man who appeared bedridden and wasn't responsive at all when we walked in. I thought, and my real estate agent told me, that without removing all of the tenants things, it would be impossible to do a thorough home inspection. Dismayed, I decided to cancel the deal. When I got back home, I looked online at the Zillow estimate, and it was nearly $50k less than what the asking price was. I know that the Zillow estimate isn't going to be 100% correct, but based on what the first floor looked like, the sales price of other two flats in the area and my own knowledge of the area, I now feel like we should have either offered quite a bit less or walked away. At the very least, we should have waited to see the first floor before putting in the offer. I feel like I dodged a bullet here, and I am wondering if we shouldn't have seen the first floor before making the offer, or before I contacted the lawyer and had her draw up a contract?
We have been to look at 4 or 5 houses so far, and I also get the feeling that, since she lives far away from Englewood, she just wants to kind of get this over with. She complains about coming to see the properties, and yesterday, before I asked her to come with me, was going to send me alone to see the occupied first floor unit. She knows that I am pretty green about the real estate process and she has many years of experience doing this.
What are your thoughts on this?
@Jay Garrison I think its quite simple. You get yourself another agent. Go out ad look at a few more properties but contact the listing agent and look at it with them. This way you get to know the agents and kind of do an interview of them without them even knowing it. OR just start literally interviewing agents who work specifically in your area and know the market well. If your agent is not doing a good job then make a change. This is business and not personal.
First of all seems like you need different agent. Yours doesn't do much. He suppose to give you comparables and help you with strategy and negotiation. Based on your story I don't see that.
Second as a home inspector I can tell you that inspection is only visual. So if a place is cluttered inspector cannot move things. Make sure that electric, water and gas is on before inspection and still good inspector can tell you about overall condition of the house. Get someone with infrared camera it helps. Good luck with your house hunting.
You need a new agent, one that specialized in investment properties and that specific neighborhood.
2-4 units in Chicago can be very complex so make sure you find someone with lots of experience in them.
Also, do not look at Zillow. It is not even a close resemblance of reality
I agree with Alex, Woytek, Brie. Your Real Estate Broker should be working in your best interest the entire time and should be able to give you a Comparable Market Analysis (CMA) prior to putting an offer in, at the very least. Finding a local agent is helpful for sure but with today's technology, a broker who specializes in Chicago should be able to work nearly every neighborhood and get help from some colleagues if they are not super familiar with a certain area.
I'm a real estate broker in Chicago and I'm not saying you need another agent because I want you to choose me, but before purchasing you should interview other brokers to find one that best fits your goals, needs, and wants. One last thing, your broker should be able to draft, submit, and follow up on any offers you approve. Best of luck.
@Jay Garrison its not uncommon to make offers on properties without seeing all of the units. Especially multi family properties. But immediately after you have the property under contract all units should be available for you to see.
As to the price, you might very well have dodged a bullet for a 2 Flat in Englewood at $160K unless it was super nice. But prior to even making an offer you should have received or requested a Comp Report from your realtor. That Comp Report would have told you before you even set foot out the door if the asking price was realistic. And sending a rookie buyer out to see a property on their own is not a good practice either.
In the absence of some good advice from your agent your "gut feeling" to pull out on this one might have been the right decision.
Hey its nice to work with family and friends but when its your money on the line you need a profession that knows that particular area well and has totally got your back.
Best of luck.
Get used to not being able to see all the units of an occupied multifamily property. Thats standard in many if not most markets.
I Purchased a 4 Unit in Portage, Indiana 2 years ago and never set foot on the property until AFTER I closed. My tradeworkers and other due diligence was enough research for me. You personally don’t need to see the units.