So I spotted a house that I like and asked my buyer’s agent to submit an offer. He says that I should offer something close to the 5% off the asking price range, but from my research, it seems like the asking price is more towards 10% higher than the past selling price (at least as of Dec 2009). I went and checked the valuation from the city, and it’s consistent with my findings. So I ask the agent to submit an offer of 10% below the asking price.

He says he’ll submit it and then the next day he asks me for the mortgage pre-approval which I was in the process of getting. We exchange a few calls in between, and he says the buyer is waiting for my pre-approval to show that I can in fact qualify for a mortgage. A few days goes by, pre-approval arrives and I forward it to the agent. I call him the next day and he comes back and tell me the seller has countered my offer with a price close to the asking price. Note that during the whole process I haven’t signed anything (I thought you had to sign the offer letter??)

How do I know if the offer was in fact submitted to the seller? Somehow it doesn’t seem like I’m really dealing with the seller, but rather the agent’s judgement on the price. Am I being too skeptical?

Would it be appropriate if I contacted the buyer's agent or the buyer directly?

 

Not sure if there's a way to tell aside from calling the seller's/listing agent. However, seems to me like you have some doubts so should probably be looking for a new agent on your side, someone you can trust and someone you'd wanting earning that big commission.

 

^^

Sounds like you need a new agent.

But AFAIK, you should be singing any offers that get submitted and the seller should be signing any counter offers. Your agent should be showing you the counter offers.

That's not to say that the offer didn't get submitted or they didn't counter what he said, but EVERYTHING in negotiations needs to be in writing. In CA, every single offer/counter offer needs to be submitted as part of the records, so there has to be a paper trail - with signatures.

 

Why have someone representing you that you don't trust??
What do you think the city mass valuation figure (assessment value) has to do with market value?
As stated, in CA everything regarding real estate must be in writing. Check your state. Exactly what were the terms of the offer that you thought were submitted?

Regarding prequalification, many agents will refuse to spend time with you if you aren't prequalified. Exception is if you have a funds available letter form you financial instituation showing you can pay cash.

 

I just started dealing with this agent about two weeks ago, so I haven't been able to tell if I can trust him 100% yet. Also, I'm new to this whole process so I'm not familiar with what's supposed to happen and how (that's what you guys are here for )

As for the terms of the offer, I don't think there was anything, all he asked me was the offer price, the downpayment, and a pre-qualification letter. That's why it felt like he was screening me rather than the seller considering my offer. It was only done over the phone, he didn't even ask me to sign anything which I found weird

Sounds like my first step would be to ask for paper trail for the offer/counteroffer? I guess I want to get to the bottom of it before I conclude that I can trust him or not. I think if I switch agent it will get ugly...

 

If you don't trust him, that's up to you. But a lot of times this offer/counter stuff is done verbally to save a lot of time. If you want the counter offer in writing then ask him for it.

IMO the city valuation of the property isn't really worth much when making an offer on a property. You should find out what the last half dozen or so similar houses sold for.

I've always suspected that the whole "buyer agent" thing is a bit of a scam. These buyer agents always seem to know what the seller is willing to sell at. While they are supposed to be representing you, they don't get paid until you buy a house. While not legal, I think I would be having plenty of side conversations with the seller agent if I was a realtor.

 

That's what I thought too, it's weird that how thing all works, that the buyer's agent is paid by the seller/listing agent. Seems like a conflict of interest to me. but I guess he's there to help with the paper work but not really the negotiation ..

I did find a bunch of properties sold in the recent 3-4 months, but they're mostly a bit smaller, and about in line with what my idea of a fair price is in the area. However, recent (as in listings listed in Feb) listings are more or less closer to the asking price of the home I'm looking at. Could this be just optimistic hype in price after the new years, the first time home buyer's credit, or is the housing market actually getting better??

 

You may want to start by educating yourself a little better about what is customary practice in your state and locally. This is likely going to be one of the largest purchases in your life. I can tell you that you have no obligation to that agent if there is nothing in writing. Agents are supposed to be and act like professionals. They have a Code of Ethics and everything. In my state we have to be licensed.

Your state probably has a real estate department and a consumer affairs department. Both should have some factual information about what you can expect in the transaction. That market research you have done is a good start.