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.
Interesting case in San Diego, where an unhappy home buyer is suing their Realtor, alleging that they overpaid for their home because the Realtor withheld sales information that indicated a lower value for the property they purchased. Here is a short segment from The Today show explaining the background.
Certainly, no one likes to purchase a house and find out that the value has declined. However, Realtors don’t control the direction of the market. And there is no state law that homes in California can only go up in value (as if we all needed to be reminded of that right now).
If, as alleged, their Realtor purposely withheld relevant information (for example, pending or closed sales on the MLS) with the intent to deceive the buyer, then they have every right to be upset and to seek recourse. The Realtor has a fiduciary responsibility to represent his/her client’s best interest, and if the agent did in fact withhold vital information then they should bear the consequences.
On the other hand, the buyer should take some responsibility for their transaction. The internet is a very powerful tool, and there are multiple channels available for consumers to do their own research on real estate. Sites such as CyberHomes.com, Zillow.com, and others exist where consumers can get neighborhood sales, estimates of value, and other relevant information about any property.
Lastly, real estate is not something that is easy to quantify. There is always a range of value, even within a neighborhood. Factors like upgrades, market conditions, appeal, lot size, location, and even the direction the home faces can have an impact on the sales price of the property. Just because a home sold for less than the subject property does not mean that the subject property is worth less money…. any of these factors can effect the final selling price of the subject property (up or down, for that matter). In this case, just because there were a couple of sales at a lower sales price than the property in question does not in and of itself mean that the buyers were deceived or misled. From a real estate perspective, a property is worth what a willing buyer is willing to pay, and what a willing seller is willing to sell for. And that figure can range depending on the buyer, as most buyers have different factors they value.
I am not an attorney, nor is my intent to comment on the specific allegations of this suit. But it is an interesting case, and one that is fairly topical at the moment given the sluggishness of the market. In a fast moving market like we are in now, it begs the ultimate question…. How do you really tell the value of a property?
The Pleasanton CA real estate market continued on a slow and steady trend in January, as rainy weather and the dark clouds of bad news on real estate and the economy dampened most buyer’s moods. Fears of a recession and dismal national real estate news were instrumental in prompting the Federal Reserve to again lower short term interest rates by 3/4%, which is certainly good news for mortgage rates in the short term. And the impending stimulus plan being proposed in congress, but not yet signed into law, brought even more hope that the bottom of the cycle is near. Perhaps most significantly, the much discussed increase in the FNMA loan limits, which are currently stuck at a laughable $417,000, seemed to pick up steam, with speculation that an increase into the low $700,000’s for the Bay Area was being considered. This figure, which is based on 125% of the area’s median home price, might be the spark everyone is hoping for to signal the end of the home price declines. As the Senate and House reconcile their stimulus bills, it is not yet certain that an increase in the Federal conforming loan limits is imminent. But most industry insiders are hopeful that the increase in the loan limits will become a reality. All of this is prompting cautious optimism that we will see some stabilization in the Pleasanton area real estate market as we go into the Spring market.
Overall in January, pending sales remained at a low level, ending the month of January at 25 pending single family home sales, up from just 24 in December. The inventory at the end of January rose to 159 single family homes on the market, up from 136 at the end of December. This is still a low inventory figure, although it is expected to rise as we enter the Spring. (click on graph to enlarge).
In the under $1 Million market segment in Pleasanton, pending sales declined in January, ending the month with 14 pending sales, as compared to 17 in Decembr. Inventory rose, with 81 single family homes on the market at the end of January, as compared with 69 at the end of December. (click on graph to enlarge).
The $1 million to $2 million market segment saw an increase in pending sales, with 10 pending sales in January, up from 5 pending sales in December. Available inventory of homes in this bracket rose from 43 available homes at the end of December to 50 available homes at he end of January. (click on graph to enlarge).
In the $2 million plus market segment, there were no pending sales in January, a decrease from 1 pending sale in December, and 9 and 4 pending sales in October and November respectively. Inventory rose slightly, with 28 homes on the market at the end of January, up from 26 at the end of December. (click on graph to enlarge).
Look for both inventory and sales activity to pick up as we get into March and April. Lower interest rates, along with the possibility of the increase in FNMA loan limits, seem to be prompting more buyers to start looking. Most agents are reporting an increase in traffic at Open Houses, and there seems to be more inquiries from potential buyers. While this is no guarantee that sales will increase, it is certainly a good sign. Another positive sign is the emergence of “vulture funds”, where investors seek out bargains on foreclosed properties. This is a signal that at least some professional investors feel we are nearing the bottom of this down market.
Stay tuned… the next couple months promise to be interesting. And yes, there are some excellent purchase opportunities in the market.
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