Doug Buenz
Real Estate Broker
Alain Pinel Realtors
(925) 463-2000
I am a local Real Estate Broker with
Alain Pinel Realtors serving the
Pleasanton and the Tri-Valley
area. I am an avid watcher of the
local real estate market, as well as
cultural and political events.
But that is what I do, not who I am... » read more
Real Estate Q & A
Unreasonable buyers asking for more money from Seller
I entered into a contract to sell my house a couple of weeks ago. Because the market is slow, I ended up taking a lot less for my house than I was planning on. Now the buyers have had inspections, and they want me to credit them $3500 for repairs, most of which are complete B.S. I am really mad about this. Should I tell them to take a hike? Fred W.
Fred, take a deep breath and relax. In some ways this market can be called "Revenge of the Buyers". Remember 4 or 5 years ago when Sellers told buyers things like "take it or leave it" or "don't ask for anything to be fixed... we have 2 other buyers who want it". Now the tables have turned. Don't get hung up on the details of what the buyer wants. Some may be legit, and some might be categorized as outright extortion. But so what. If you want to sell you house, swallow hard and sign it. If you think you can do better in this market, tell them no. It is really that simple. But tread carefully, because working with buyers today is a little like trying to feed a squirrel. They don't really trust you, they are skittish, and at the first sign of trouble they go scampering for the woods. If you refuse the $3500, it could end up costing you $5000, $10,000, or even $20,000 more to get the next buyer in contract.
Stubborn Seller Won't Move Out?
I am buying a house in Pleasanton, and the contract is signed and the escrow is getting ready to close, and the seller decides he does not want to move out at close of escrow, but wants a week after close to move out. When we express the fact that this will not work for us, he threatens to cancel the contract. Can he do this? Ben in Pleasanton
Ben, I have good news and not so good news. The good news is that no, the seller can not unilaterally cancel a ratified contract just because he doesn't get his way. If all contingencies are removed and you are coming down to the wire, the seller can't arbitrarily start changing the terms. And he certainly can not cancel a contract. Real estate contracts are bilateral. they require the agreement of both the buyer and seller. If he attempted to cancel the contract, you could likely tie up his property so he could not sell it to someone else, and take him to court to force him to sell to you under the terms of the contract. That is the good news. The not so good news is that this course of action is time consuming, emotionally draining, and costly. If the seller becomes difficult to deal with, try to relax and work around him if you really want the house. You can always take him to small claims court after the close to recoup any out of pocket expenses you incur. Unfortunately, there is virtually no protection in a contract for an obstinant seller. You can either put up with him as best you can, and then seek renumeration in small claims court, or threaten him back, but it is difficult if not impossible to physically force the seller out of the premises. As always, consult an attorney about the specifics of your case.
Confusion on Commission Agreement?
Doug, my friend listed her house with an agent with the understanding that if one of her friends (named specifically) buys her property, the agent would be compensated at 4% commission. So one of her friends has made an offer. When the agent sent my friend the estimated pay out from the transaction, the agent put in her commission as 6%. Her explanation is that the original deal was only good until she listed the house in MLS. Is this ethical? Or legal? Or standard practice? Ginny C.
Ginny, that is a great question. As is often the case, the devil is in the details. Any agreement involving the sale or transfer or brokerage of real estate in California must be in writing to be enforceable. So if there was no written clause regarding the friend, then your friends are out of luck. So is it legal? I think a better question is the agent legally entitled to the 6%. Based on what you have described, the answer is yes, since there obviously is no written agreement regarding this situation. Is this ethical? I always have a problem with any party that does not honor the spirit of an agreement, even if the details are not specifically spelled out. But keep in mind that neither you nor I heard what was actually said. Again, this is why all agreements dealing with real estate must be in writing. I this standard practice? Again, I am not sure what you are referring to, but if there is an exception or exclusion to the commission agreement for one party, there normally is a time limit during which the party must act. Whether or not that was clearly stated in writing, or clearly explained, is a matter of conjecture at this point. The lesson here is to always get agreements in writing, especially if they are modifications to standard agreements.
Statistics released for February by Dataquick showed that sales activity dropped for the 25th consecutive month in the Bay Area. Contra Costa County sales dropped nearly 20% from last February, which is a new 10 year low. The median home price in February also declined in Contra Costa County by 5%. Alameda County sales were up 3.7%, and the median home price was up slightly.
So what is going on here? This is a classic “dalmation” market, which is spotty. Some parts of the Bay Area, primarily the penninsula and the Tri-Valley area, are showing a robust early spring. In Pleasanton, for example, closed sales are up nearly 50% from last February, and so far in March they are showing no signs of letting up. But in the secondary markets of Eastern Contra Costa County, Solano County, and the Central Valley, it is a very soft market, with an abundance of inventory and lackluster sales activity. It can even be a different market for neighborhoods within a city, where some neighborhoods are hot with multiple offers, and other neighborhoods are sluggish. The lesson here is not to draw too many conclusions from aggregate data such as the dataquick report. What you are experiencing in your particular city, or particular neighborhood, could be much different.
Lastly, a word about Median Sales Price. I have written on this topic before, but just to reiterate. The Median Sales Price tells you what the median price for closed sales was for that period of time. It is not a substitute for price trends unless it is viewed over a long period of time. And it requires a large sample to have any significant relevance statistically. There are other factors which influence median home price. Somtimes certain segments of the market heat up or cool down. If there is a surge of activity in the $1 million to $2 million price segment, and slower activity in the low end, you would likely see the median home price increase. One month last year the median home price in Pleasanton increased from $800,000 to $905,000, yet home prices were soft to declining at the time. Obviously, the average home in Pleasanton at that time did not go up over $100,000. So take aggregate statistics with a grain of salt. If you really want to know what is going on, ask your neighborhood real estate professional (emphasis added).
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Contra Costa County, Bay Area Home Sales Drop