Winning a bidding war is good for 30 seconds, until you realize you`re the person who just beat up 71 other buyers for the same house. You`re the one who paid the most. And you have no idea how much you paid more than the second highest bidder. You may have won with 1,500 USD or 150,000 DOLLARS. You`ll never know. The purchase and sale agreement included the default printed clause: “Once completed, free ownership will be granted to the purchaser, unless otherwise stipulated in this contract.” All commission reduction agreements negotiated by brokers and sellers are mandatory for intermediation. When commission reduction agreements are proposed, details must be provided in writing and by the broker or seller to their broker. Any reduction in commissions should be in line with the brokerage`s guidelines. But in all cases, intermediation is linked by agreements to reduce commissions concluded by their employees on their behalf. That is true up to a specific point.
A value buyer looking for a deal can offer, through the listing agent, a lower sticker price with a warranty agreement that came into effect without affecting a seller`s final result. But most buyers in this scenario, without a mitigating force from a trusted buyer-agent, take this logic too far. A buyer I met recently in one of my offers offered $1,499,000. The winning bid, which arrived a few days later, was a represented buyer who arrived at 1,550,000 $US. The unrepresented buyer felt that he should benefit financially from his lack of representation (not to mention his misunderstanding of the visual value of $1.5 from 1,499). This buyer had no one to help him from his own point of view. He had no idea, so he never had a chance. I remember that those who think they don`t need help are usually the ones who need it most. Were the buyers who did not win treated well? Buyers spent time looking at the property, paid for certified deposit checks and many probably spent money ($400-700) on a home visit. Many of them probably received bad advice from their agents and thought they could actually get this house with their $800K subs offer.
And what buyers probably don`t know is that they unknowingly participated in a game that will drive up prices in the neighborhood, so they probably can`t afford to live there anymore.