Loose Lips Sink Ships
It is the seller's broker's ethical responsibility to the seller to report anything
you say or do that might impact on the transaction or selling price of
Let's take my favorite (actual!) example. The buyer was looking at a million-plus
dollar property in Concord for which he had offered $800,000; on the home
inspection, in the presence of the selling agent, he
mentioned that he could really afford to increase his bid to $900,000 if
he had to; well, guess what?
When out looking, there's nothing wrong with telling a broker what your price-limit
for properties is, but once you are negotiating, be very careful what you
say or you may pay more than you had planned.
One big mistake that you can make is on the "Inspection Contingency" in
your offer. Some brokers suggest that you insert a dollar amount so that
the contingency states, to paraphrase the wording "the buyer will not renegotiate
the price of the house unless there are serious structural problems discovered
on the home inspection in excess of $5000." You can see that this is very
advantageous to the seller (and not you!), because not only have you limited
your ability to renegotiate the price after the inspection, but you may
also have agreed to pay up to $5000 more for the house than your agreed
upon offer price!
I have seen offers where "$0" was inserted on the dollar line, or phrases
substituted indicating that the inspection only be "satisfactory to
the buyer," with no dollar figure at all. These are improvements, but to
avoid problems limiting your options, I suggest that you discuss even the
offer with your attorney.
Another point to avoid in the offer is the requirement that you show the
inspection report to the broker or seller. The report belongs to you and
you alone. Giving the broker the report can reduce your ability to renegotiate.
One final caution. Looking at houses can be exciting, particularly if you
have found one you love. The seller's broker's job is the relay to
the seller all that he or she observes about you. Don't be too cool and
don't be too hot. Either response can indicate the intensity of your interest.
If you start talking about where your living room couch
is going to go, it may cost you that set of new furniture you were hoping
Brokers can be very useful. They can work with you to sift through the many
properties on the market to help you focus on what you want. They can obtain
additional information for you about a particular property.
But use the seller's broker to tell the seller what YOU want the seller to
know, not what the broker wants the seller to know. Remember, the home
inspector and your
attorney work for you. The seller's broker represents the seller.
From "JUST PROPERTY"
By J. May