Expert: Karyn Foley - 5/11/2007

Question
Hi, My Partner and I have recently put an offer on a town home that is perfect for us.  When we went to the first open house we met with the selling agent who also happens be the owner.  We told her that we have buyers for our place and that we are interested in hers.  She told us she was taking offers in 3 days.  We called after that to check in with her and she told us she my just rent it because she didn't get any offers.  By this time we had a buyer for our so we new we could make an offer.  Then we got our broker involved.  She was originally asking 549K so we offered 559K.  When we were placing our offer at that time she told us she had 4 other offers after telling us she was going to put it up for rent. She then told us she had 5 offers and countered our offer to 589K.  We accepted and then she said she was going to check with her office to see if there were any hire offers that came in.  I feel that is is haggling and she really doesn't have any other offers at all.  I also feel like if she did she would have know what they were before she counter offered us.  I also feel that by us accepting her counter means that we came in higher than any of her other offers.  I just have a bad feeling that she is going to come back to us today and say she has a higher bid to make us go higher when she actually does not.  Is there a legal way for us to find out if she really does have other offers?  I really think she is playing us form one day putting on the market then 4 days later telling us she is renting it and then two days later having 6 offers including ours.  There has to be some rules about this.  I also know that brokers are in for their commission as well and don't know if ours is being honest as well.  He also found out for us that over the last 4 years she has put this property on the market 4 time and has taken off 4 times.  Any thoughts on how we should proceed?  Thanks

Answer
You have every right to know if there were really any other offers.  With the background of on the market and off the market, it sounds suspicious.  I would call the office's owner or manager, and ask for confirmation of any and all other offers presented.  You do not have the right to know what the dollar amount offered was, but you do have the right to have the other offers confirmed.  If there is no confirmation and you feel you are being cheated, then immediately put in writing that you wish to withdraw your offer.  You may indeed be manipulated.  However, if there are other offers verified, then you should have your counter offer signed and accepted at once, there is a time limit for that on your contract.  In the meantime, have you accepted and signed a contract for the sale of your home?  If not, then are you fully able to buy the new home without selling your home?  Or - if you do have a contract, is your purchase subject to the successful close of escrow on your property?  You should have guidance from your lender on what and how to do it.  From the gist of your letter, you do not appear to be well represented or informed by your agent.  Your agent is your advocate and should be giving you answers and a professional direction on all of this.  You should not be dealing directly with the owner/agent, but with your own agent and make certain you have everything in writing.  There are many homes from which to choose, and it is not worth getting strung out or strung along.  I am re-reading your email, and it says you accepted her counter.  Then it should all be signed up and a deal.  Do not delay getting the answers you need, because there is usually a time limit for you to approve your inspections and contingencies, and during that time period is when you should withdraw.  Your agent does sound direct, and I don't know why your agent would like.  Give your agent the opportunity to seek out what is truly going on.  Then, if you still feel uncomfortable with your agent, interview others and select one in whom you have confidence.  Your deals smells fishy, so please be careful.  If you do go through with it, your lender will send out an appraiser as part of the loan contingency.  You should have the contingency written in your contract that states it is subject to the loan and the loan is subject to an appraisal.  If the appraisal comes in lower, you probably will not qualify for the loan you signed up for, and during that loan contingency period you can also decline to proceed if it is a lower value that you paid.  It is no longer a sellers market out here in the Los Angeles area, and as far as I know, in the rest of the country.  There can be exceptions in some hot pockets throughout the country, like beach front home, view homes, gated areas, et cetera.  Otherwise, it is a fairly even handed market with foreclosures on the horizon and buyers being able to deal and negotiate on prices.  Don't rush into anything without being serious, comfortable and informed.  Good luck to you, and let me know what happens and if I can answer any other questions.  Karyn Foley