I don’t care about fairness

Real Estate Broker · Phoenix, AZ · Member since 2016 · 68 posts · 38 votes

8mo

There’s 'fair,' and then there are legal or professional obligations, depending on what the guy claiming to be the seller was really up to. I’m sure you left out details for brevity, but fairness is subjective. When buying investment properties, the goal is to find sellers whose idea of 'fair' makes you money. That said, when people go at real estate alone, buying or selling, they often don’t know what they don’t know. With so much complexity and so many ways to apply knowledge, the concept of fairness often gets dragged into real estate, even though, ethics aside, it has little to do with business.

Nevertheless, that's why there are so many laws and organizations meant to protect consumers. So to some degree, anything not illegal or unethical might be considered fair.

Congrats on getting that contract! A lot of action around Casa Grande, I've been poking around Eloy myself. It takes vision, and I expect a heap of patience, but talking buy-and-hold, this area presents one of the more potentially lucrative 10-year investment opportunities in Central Arizona.

[email protected]602-975-3566

Jeffrey Daniels, REALTOR® - Century 21 Arizona Foothills519 Reviews

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Dan H.Pro Member

Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes

8mo

Quote from @Shiloh Lundahl:

Over the weekend I saw a property come up in Casa Grande, Arizona which is an area where I buy properties and then I will sell them on a lease with the option to buy.

The property was a 2 bedroom 1 bath home a little over 1000 ft.². I figured if I could add another bedroom and another bathroom, then I can increase the value substantially. It was up for sale on the market for $100,000 as a 2 bed 1 bath home. I figured that I could probably put $60,000 into it and then it should be worth about $240,000 as a 3 bedroom 2 bath home.

So on Monday, I called the number for the person who listed it. I told him that I had several rentals in the area and I gave him an offer for $100,000 with $20,000 nonrefundable earnest money deposit and close in a week. He said he would get back to me and when he did, he said that he had gotten multiple offers that day that were all $10,000 or more higher than my offer. He said he wanted to be fair and give me an opportunity to send in my highest and best offer. I told him that I didn’t care about fairness. And in fact, I didn’t want things to be fair. I told him that I wanted an unfair advantage and then I didn’t wanna be in a bidding war.

So I adjusted my offer to $105,000 and found out that he was doing something similar to a novation were even though he didn’t own the property he could market the property for sale. So I told him that rather than closing on the property, he could just assign it over to me like a wholesaler and that would save him closing costs. Also, since I went directly to him, I wouldn’t be using a realtor and the seller wouldn’t have to pay for my realtor fees.

Later in the day, I got an email from him accepting my offer even though it was lower than other people’s offers. What I’ve learned about real estate investing and business in general is the idea of fairness is completely subjective and what’s fair to one person may not look fair to another. There’s too many factors that can come in into play. So don’t focus on the idea of fairness. Instead, I focus on the idea of maximizing an unfair advantage in order to win at real estate investing and in business.

Now don’t take this to the extreme. I’m not advocating for doing things illegal, immoral, or unethical. I’m talking about leveraging your unique ability and marketing it to make it look like you are the best choice.

What do you think with regards to fairness in real estate investing?

My first thought was did the “seller” really have multiple offers or was he trying to get you to bid against yourself.

My son recently placed an offer on a full gut rehab $90k over initial ask. He was projecting a $25k to $35k profit with favorable financing (I offered 5%, no points). I recognize there are some outstanding flippers in this market but it was a competitive offer and anyone beating it with HML financing would have tight profit even if they were outstanding flippers.

The selling agent stated they had 5 offers higher than ours. My son’s projected profit was too slim to get in a bidding war with 5 higher offers. He could at most raise his offer a few $k.

The property ended up selling for $2.5k more than my son’s initial offer. When I saw this I asked his agent if she felt the selling agent lied about the other offers and she said she did now. I asked her if she felt if my son’s price was shopped and she indicated almost for sure. Selling price is $2.5k higher than my son’s original offer seems very suspicious. She seems very confident the selling agent shopped our price. She indicated their brokerage will be reluctant to deal with the other brokerage going forward.

This is a big town but the RE is not that big. That agent now has skeptical credibility. If there are more cases like this, it will definitely hurt his reputation.

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Alan AsriantsBusiness Member
Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
8mo
Quote from @Dan H.:

Quote from @Shiloh Lundahl:

Over the weekend I saw a property come up in Casa Grande, Arizona which is an area where I buy properties and then I will sell them on a lease with the option to buy.

The property was a 2 bedroom 1 bath home a little over 1000 ft.². I figured if I could add another bedroom and another bathroom, then I can increase the value substantially. It was up for sale on the market for $100,000 as a 2 bed 1 bath home. I figured that I could probably put $60,000 into it and then it should be worth about $240,000 as a 3 bedroom 2 bath home.

So on Monday, I called the number for the person who listed it. I told him that I had several rentals in the area and I gave him an offer for $100,000 with $20,000 nonrefundable earnest money deposit and close in a week. He said he would get back to me and when he did, he said that he had gotten multiple offers that day that were all $10,000 or more higher than my offer. He said he wanted to be fair and give me an opportunity to send in my highest and best offer. I told him that I didn’t care about fairness. And in fact, I didn’t want things to be fair. I told him that I wanted an unfair advantage and then I didn’t wanna be in a bidding war.

So I adjusted my offer to $105,000 and found out that he was doing something similar to a novation were even though he didn’t own the property he could market the property for sale. So I told him that rather than closing on the property, he could just assign it over to me like a wholesaler and that would save him closing costs. Also, since I went directly to him, I wouldn’t be using a realtor and the seller wouldn’t have to pay for my realtor fees.

Later in the day, I got an email from him accepting my offer even though it was lower than other people’s offers. What I’ve learned about real estate investing and business in general is the idea of fairness is completely subjective and what’s fair to one person may not look fair to another. There’s too many factors that can come in into play. So don’t focus on the idea of fairness. Instead, I focus on the idea of maximizing an unfair advantage in order to win at real estate investing and in business.

Now don’t take this to the extreme. I’m not advocating for doing things illegal, immoral, or unethical. I’m talking about leveraging your unique ability and marketing it to make it look like you are the best choice.

What do you think with regards to fairness in real estate investing?

My first thought was did the “seller” really have multiple offers or was he trying to get you to bid against yourself.
My son recently placed an offer on a full gut rehab $90k over initial ask. He was projecting a $25k to $35k profit with favorable financing (I offered 5%, no points). I recognize there are some outstanding flippers in this market but it was a competitive offer and anyone beating it with HML financing would have tight profit even if they were outstanding flippers.
The selling agent stated they had 5 offers higher than ours. My son’s projected profit was too slim to get in a bidding war with 5 higher offers. He could at most raise his offer a few $k.
The property ended up selling for $2.5k more than my son’s initial offer. When I saw this I asked his agent if she felt the selling agent lied about the other offers and she said she did now. I asked her if she felt if my son’s price was shopped and she indicated almost for sure. Selling price is $2.5k higher than my son’s original offer seems very suspicious. She seems very confident the selling agent shopped our price. She indicated their brokerage will be reluctant to deal with the other brokerage going forward.
This is a big town but the RE is not that big. That agent now has skeptical credibility. If there are more cases like this, it will definitely hurt his reputation.

There is an ethical line here. In the business we call this - fishing for other offers. This is some thing that drives me absolutely crazy. It's when I submit an offer for a client. I'm waiting to hear back and all I hear is crickets because in the meantime, the other agent is taking that offer and marketing is around trying to get some thing better. In this market unfortunately for the buyer it works. That being said, in reality that Agent is working for their seller, and not from my buyer. In theory it could be deemed as ethical, but I don't think that it is right when it easily crosses the ethical line is when that seller agent fish is your offer and then double end of the deal to make double the commission. I've actually lost a few bids like this, and this was incredibly frustrating. What people also have to understand is that there are a lot more factors to the purchase price in an offer. Sure your offer might only be 2.5 K lower but maybe that other offer waived all of his contingencies was providing cash had a lot more cash in the bank from their proof of funds, etc. At that point the best offer is not always about the price. Sellers and agents will accept offers 5 to 10k - even more sometimes less then the highest offer due to having more favorable terms. Sometimes that extra $5000 is not worth the headache of going through an inspection waiting for hard money financing to go through a longer deadline, etc. Once that gap gets larger larger, then certain terms do not outweigh the price difference.
[email protected]267-767-0111
Alan Asriants - New Century Real Estate 590 Reviews
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Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
8mo
Quote from @Alan Asriants:

Quote from @Dan H.:

Quote from @Shiloh Lundahl:

Over the weekend I saw a property come up in Casa Grande, Arizona which is an area where I buy properties and then I will sell them on a lease with the option to buy.

The property was a 2 bedroom 1 bath home a little over 1000 ft.². I figured if I could add another bedroom and another bathroom, then I can increase the value substantially. It was up for sale on the market for $100,000 as a 2 bed 1 bath home. I figured that I could probably put $60,000 into it and then it should be worth about $240,000 as a 3 bedroom 2 bath home.

So on Monday, I called the number for the person who listed it. I told him that I had several rentals in the area and I gave him an offer for $100,000 with $20,000 nonrefundable earnest money deposit and close in a week. He said he would get back to me and when he did, he said that he had gotten multiple offers that day that were all $10,000 or more higher than my offer. He said he wanted to be fair and give me an opportunity to send in my highest and best offer. I told him that I didn’t care about fairness. And in fact, I didn’t want things to be fair. I told him that I wanted an unfair advantage and then I didn’t wanna be in a bidding war.

So I adjusted my offer to $105,000 and found out that he was doing something similar to a novation were even though he didn’t own the property he could market the property for sale. So I told him that rather than closing on the property, he could just assign it over to me like a wholesaler and that would save him closing costs. Also, since I went directly to him, I wouldn’t be using a realtor and the seller wouldn’t have to pay for my realtor fees.

Later in the day, I got an email from him accepting my offer even though it was lower than other people’s offers. What I’ve learned about real estate investing and business in general is the idea of fairness is completely subjective and what’s fair to one person may not look fair to another. There’s too many factors that can come in into play. So don’t focus on the idea of fairness. Instead, I focus on the idea of maximizing an unfair advantage in order to win at real estate investing and in business.

Now don’t take this to the extreme. I’m not advocating for doing things illegal, immoral, or unethical. I’m talking about leveraging your unique ability and marketing it to make it look like you are the best choice.

What do you think with regards to fairness in real estate investing?

My first thought was did the “seller” really have multiple offers or was he trying to get you to bid against yourself.
My son recently placed an offer on a full gut rehab $90k over initial ask. He was projecting a $25k to $35k profit with favorable financing (I offered 5%, no points). I recognize there are some outstanding flippers in this market but it was a competitive offer and anyone beating it with HML financing would have tight profit even if they were outstanding flippers.
The selling agent stated they had 5 offers higher than ours. My son’s projected profit was too slim to get in a bidding war with 5 higher offers. He could at most raise his offer a few $k.
The property ended up selling for $2.5k more than my son’s initial offer. When I saw this I asked his agent if she felt the selling agent lied about the other offers and she said she did now. I asked her if she felt if my son’s price was shopped and she indicated almost for sure. Selling price is $2.5k higher than my son’s original offer seems very suspicious. She seems very confident the selling agent shopped our price. She indicated their brokerage will be reluctant to deal with the other brokerage going forward.
This is a big town but the RE is not that big. That agent now has skeptical credibility. If there are more cases like this, it will definitely hurt his reputation.

There is an ethical line here. In the business we call this - fishing for other offers. This is some thing that drives me absolutely crazy. It's when I submit an offer for a client. I'm waiting to hear back and all I hear is crickets because in the meantime, the other agent is taking that offer and marketing is around trying to get some thing better. In this market unfortunately for the buyer it works. That being said, in reality that Agent is working for their seller, and not from my buyer. In theory it could be deemed as ethical, but I don't think that it is right when it easily crosses the ethical line is when that seller agent fish is your offer and then double end of the deal to make double the commission. I've actually lost a few bids like this, and this was incredibly frustrating. What people also have to understand is that there are a lot more factors to the purchase price in an offer. Sure your offer might only be 2.5 K lower but maybe that other offer waived all of his contingencies was providing cash had a lot more cash in the bank from their proof of funds, etc. At that point the best offer is not always about the price. Sellers and agents will accept offers 5 to 10k - even more sometimes less then the highest offer due to having more favorable terms. Sometimes that extra $5000 is not worth the headache of going through an inspection waiting for hard money financing to go through a longer deadline, etc. Once that gap gets larger larger, then certain terms do not outweigh the price difference.

Ours was cash offer with no HML (unless you consider me the HML but seller did not know where the cash was coming from). Only 2 contingencies were to 1) see garage to ensure that it had nothing super wrong with it (such as a meth lab) 2) review of the condo rules for anything crazy. Son offered to close at seller specified time within window of 3 weeks to 2 months. I could have shown access to cash at maybe 10x the offer price.

No inspection, financing, or appraisal contingencies. $20k EMD (son's offer was $365k) which seems low for this expensive market but is way higher than standard in this market.

The issue for this realtor and his broker is my reputation in this market is likely much better than theirs. Same for the agent/broker my son used. My son used a brokerage that is many times larger than the seller’s brokerage.

There was a clue as to issue with the seller and/or brokerage as the initial broker that had the property listed dropped it. We initially placed the offer with that agent who told our agent that he dropped the seller and would get the contact info on the new agent. He was vague why he dropped the seller but did indicate seller was not motivated and was unreasonable. If that was not enough indication, there was no combo access provided to the complex. The new agent instructions actually included how to “break” into the complex. We got the complex combo via an agent that had listed a somewhat recent sold comp. It was not hard to obtain with a little thought. Also suspicious that the list price had increased to $100k more than initial ask (suspicious seeing our submitted offer was $90k over ask). So there were some red flags on this transaction. How bad does a seller have to be for an agent to drop them when agent has at least one offer in hand?

I suspect all offers were all cash and waived finance contingencies and close to all likely waived inspection contingency. Still it is hard to fathom an offer that had less contingencies or more reliable source of funds. I would hope all offers had contingency to view cc&r docs. Condos can have crazy rules on what needs association approvals and even restrict inside flooring.
It is not good if a large brokerage believes a smaller brokerage shopped their buyer’s offer or lied about having many offers higher than our offer. I know our agent will never believe the other agent again. She is more sure that seller agent lied about his offers (I totally agreed with this as soon as I saw the selling price) and our offer was shopped than I initially was but she has convinced me that our offer was shopped. She plans to warn her buyers about this agent going forward.

Good luck
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Shiloh LundahlPro Member

OP

Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes

8mo

@Jeffrey Daniels let me tell you this. I have owned probably 6 or 7 houses in Eloy. And I just put one up on the market for a rent to own and I have probably gotten 30 inquiries within the last week. We start showings tomorrow and I think it will be gone by Friday. We even increased the rent from $1500 to $1550 because of all of the inquiries.

https://www.zillow.com/homedetails/1005-N-Myers-Blvd-Eloy-AZ-85131/8696517_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare

480-206-1209 Podcast Guest on Show #287

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Chris SeveneyBusiness Member

Moderator

Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

8mo

Fairness is in the eye of the beholder. For example we have given someone a loan who was significantly behind, then when they went to sell the house requested we take a 20% haircut because we were already making a lot of money on the deal and thought it was "fair". Last time I checked, when someone signs a contract, I expect it to be honored and view following the contract as fair.

Now there are times when disputes occur and when that happens, both parties typically end up believing the end result was not very fair, but it probably was.

Real estate is a busines driven by agreements and contracts, if you sign an agreement understanding what it is you signed, then to me its fair.

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V.G JasonPro Member

Investor · Member since 2022 · 3k+ posts · 3k+ votes

8mo

Brag all you want about being unfair, but don't cry about it when someone treats you unfairly too.

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Ying Tang

Member since 2025 · 316 posts · 119 votes

8mo

Sorry I'm a bit confused...

Can he accept your offer even if it is lower than others?
Isn't it the seller who makes the decision? Why would a seller ignore higher bids? Or do you mean that the agent didn't present all the offers to seller?

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Shiloh LundahlPro Member
OP
Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
8mo
@Ying Tang The highest offer is not always the best offer. So an agent may present all offers to the seller and explain why one offer may be be better. Even even if it's not higher. The seller may determine whether the offer that is lower is still better.
480-206-1209 Podcast Guest on Show #287
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I don’t care about fairness

I don’t care about fairness

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