MAN! Where do you live?

I could see this happening a year or two ago, but not now. Yes, WHERE DO YOU LIVE?

When I read stories here about how demanding and picky buyers are being, I can't help remembering the horror stories in reverse from when it was a sellers' market: not allowing an inspection contingency or an unexpected call from the seller's agent for a best-and-final offer after a written offer is made. Power seems to bring out bad behavior.

I'm in NYC - my nabe is Brooklyn Heights. The 'hot' properties here right now are two- and three-bedroom apartments. Much of the new development in Brooklyn and elsewhere in the city consists of one- and smaller two-bedroom condos, perfect for (and being actively marketed to) single people and empty nesters, but not enough space to meet the growing demands of families with children. Family-sized apartments are always in short supply and there seems to be a feeding frenzy surrouding them at the moment.

DH and I have our two-bedroom place on the market at the moment - great time for us as sellers but I'm certainly not out to jerk around any buyers. Been on the other side of that fence and it ain't pleasant.

I had the same thing happen on one of my listings. We did highest and best. The guy who "lost" kept coming back, inching up each time. He finally put an offer in for $25,000 over asking price. He tried sending a letter with his last offer that was so sappy it was oozing. Talking about how they couldnt wait to bake cookies in the kitchen with their children while it snowed outside and the christmas tree was glowing in the room next door. It was really quite unbelievable. My seller sent back a message with me after the 4th offer that said: Thank you for all your offers, however,no amount of money is going to make me change my mind. I gave my word, and my word is my word. He is closing tomorrow with the lower offer. :) Ya gotta love integrity!

thus screwing the winner of best-and-final out of her legitimately 'won' property.

As a seller it must be nice to have people fighting over your property, but as a buyer; it isn't fair.

The bid was supposed to be for best and final, not almost final if you didn't win :( Technically, someone else could have done the same thing to the one that upped it. Wonder how they would have felt?

Don't know why they didn't get an open bidding war going...

Roselvr, I totally agree. Best and final only works if everyone agrees to put in their BEST and FINAL offer. Otherwise you'd go for rounds and rounds of people bidding blind and trying to top the highest number.

I guess since it's more seller friendly - and the sellers pay the commision - the vast majority of real-estate firms that I've dealt with in NYC do sealed best-and-final instead of an open system. There's only one brokerage firm I know that uses a totally open system that works just like an auction - you always know the amount of any bid above yours and always have the opportunity to make another bid or bow out.

If I were the seller, I would have to call a 'foul' on that 'play', and even though that might mean less money for me, the seller, it's only fair that the 'best and final' winner get the house. I DO believe in Karma, and wouldn't/couldn't feel right about reneging. ;o)

patty_cakes

I agree. The "best and final" winner should have prevailed. That just shows the pure greed of some people. For an apartment!

I would die there. Right now there are birds singing outside my window. We saw the deer eating our flowers last night. And the bear was back yesterday. And the only time anybody blows a car horn is during an inspection.

I was raised 45 miles due west of NYC. And I have said many times. "They don't PRINT enough money for me to go back there!"

the vast majority of real-estate firms that I've dealt with in NYC do sealed best-and-final instead of an open system. There's only one brokerage firm I know that uses a totally open system that works just like an auction - you always know the amount of any bid above yours and always have the opportunity to make another bid or bow out.

If apartments are that desirable, then more firms should do something like this.

I DO believe in Karma, and wouldn't/couldn't feel right about reneging. ;o)

So I do, I don't doubt it will come back to them.

I was raised 45 miles due west of NYC.

I was 30 minutes away, fairly close to Elizabeth NJ. I too say there is not enough money in the world to make me go back up there. I used to love the city when I was younger, doubt I could handle it now lol

I was raised about 60 miles west of NYC and still in NJ and they still have deer and birds. Never saw a bear out my window but we are careful not to put anything out to entice them close to the house. We now live just another 7 miles west into PA but the area is the same.

born and raised 15 miles west of NYC, and there isn't a better area in the country to live(Northwest Bergen County)..moved last summer to Pa,nw of Philly...and it doesn't hold a candle to my former area...

After the seller verbally accepted the highest offer

In NY a verbal agreement means nothing

In NO market is a verbal offer binding on a real estate deal. If I'm not mistaken, that's usually actually stated in state laws. (bcs in other matters, verbal contracts are binding; but real estate is for such high stakes that many states have specifically eliminated the option, to make life easier. It's sometimes under the Statute of Frauds)

NYC has a weird situation, it's true--the contract isn't usually signed until after inspection, etc. There's apparently a "binder" process that isn't binding. All bidding is verbal--unlike in other areas of the country where the signed-by-the-buyer contract is sometimes submitted as a bid.

But a buyer can verbally accept that half-signed contract, and then not sign it that very day, and get an offer before they sign, and change their mind.

And so there can be a a long period of time when a buyer thinks he has a deal, and the seller can change his mind, almost without penalty. But of course, the buyer can back out, too.

In NO market is a verbal offer binding on a real estate deal. If I'm not mistaken, that's usually actually stated in state laws. (bcs in other matters, verbal contracts are binding; but real estate is for such high stakes that many states have specifically eliminated the option, to make life easier. It's sometimes under the Statute of Frauds)

Talley Sue, I did not know this. I thought only us poor put-upon New Yorkers were subject to this, and maybe the unfortunates in a few other states.

And so there can be a a long period of time when a buyer thinks he has a deal, and the seller can change his mind, almost without penalty. But of course, the buyer can back out, too.

DH and I were talking about this over the weekend. We're in contract on a house and I know that if we back out, we'll lose our 10% down payment (though in practice, much of the time the seller will refund it, if the deal collapses due to divorce, onset of terrible illness or something like that). But what happens if the seller backs out? DH hemmed and hawed and said, well, in theory we could take the seller to court to force a sale based on violation of a contract, but he didn't know if it would actually work. Huh.

We're in contract

The difference in NYC (over other places) is that the contract comes SO late. All the negotiating (cut in price to compensate for inspection issues, etc.) is done BEFORE the deal is enforceable. In other areas, those things are done to modify the original contract.

But in other states, there is still a little bit of time where the circumstance you describe could happen. Verbal communication saying that "the contract will be signed," and then the signer changes his mind.

i've seen many posts here about people who say, "we submitted our bid, and we heard they're accepting, but we don't have the signed contract yet."

Often that could happen over the weekend even in another jurisdiction! The agent looks at the offers on Saturday, talks w/ the owners, notifies the buyers of the end result (not price, but yea/nay)--but the sellers aren't in the office to put their signature on the paper. So one of the buyers comes back w/ a lot more money early on Monday morning, and the sellers get told about it when they come in to sign the other contract. Not being idiots, they take the new offer.

Sorry and all that, but this is business. And it's not like the disappointed seller has lost that much--it was just the WEEKEND. What, 48 hours at most, and one of them was a Sunday? She didn't pay for an inspection. She didn't pass up lots and lots of other homes because she thought she had this one. There weren't any *real* damages in the legal or financial sense.

The process of buying an apartment (and don't say "for an apartment?" christopherh. They are the ONLY HOMES YOU CAN BUY in many neighborhoods of the city; we do not HAVE single family homes in many of our neighborhoods. Or if we do, they are three times the price of an apartment, or more--my apartment in such a neighborhood is supposedly worth $450k; a 3BR is worth $575k, and we're considered "affordable"), esp. in NYC where it is likely to be a co-op instead of a condo, is three months minimum, and usually at least a month between offer and signed contract. So the seller is disappointed, but she is not actually OUT anything. She was not at all damaged, except emotionally.

As for damages, if a true contract is breached--

If you sue the seller for "specific performance," you can win. As long as there's not some contingency they can use to squeak out of it (and most contingencies are for the BUYER, not for the seller).

You could perhaps use that threat to negotiate letting them out of the contract. You could say, "we will not sue you, if you will pay us the equivalent of OUR deposit, to compensate us for the time we lost trying to buy your house."

*maybe* just *maybe* a judge wouldn't find in your favor, but I highly doubt it. If they didn't, you could prove damages in terms of the market going up, your inspection money, and the time you lost.

HOWEVER, as you noted, in many instances, if a buyer has to back out bcs of an unpreventable disasters, a seller will refund the deposit out of a sense of karma.

and likewise, buyers who see that the seller has had a disaster, will often agree to dissolve the contract out that same sense of karma. They may ask for the reimbursement of true monetary losses.

I agree that the potential buyer didn't suffer any real damage, financial or otherwise. But the whole story leaves a bad taste in my mouth because it's just another tale of the paranoid cut-throat world of real estate. There's such suspicion on everyone's part, and episodes like this reinforce the stereotypes about greed, selfishness and lack of "fair play" on all sides. Buyers don't trust sellers, sellers don't trust buyers, and neither trusts agents! What suffers is the system. This kind of behavior encourages everyone to behave badly and bring their most underhanded dirty-dealing tactics to the process, lest they 'lose'. Why play fair if no one else in the game is doing so?

The agent who told me the story feels horrible about her part in it all. Legally she had an obligation to her client, the seller, to pass on the offer; but ethically she thinks it was a slimy tactic, especially since the new offer was encouraged by another agent who's a personal friend of the guy who made the late winning bid. This other agent gave him a heads-up that this was a way to get around the supposed endgame of "best and final". My agent feels dirtied by the whole affair. She and the buyer played by the rules and lost to an unscrupulous buyer following the advice of a bottom-dealing agent, plus sellers who played the game but reserved the right to change the rules at the end to their advantage.

One technique that I hate as a buyer but loved as a seller was the one used when we sold a California house in 2002 (hot market). The seller's agent just says "agent's tour on Thursday, open house on Sunday, everyone submit offers, seller will choose best offer on Tuesday".

So the buyer doesn't have a clue if he's competing with 10 other buyers or no one at all. In our case the "best" and only offer was for $25k over asking. The guy could have got the house for the asking, but he didn't know it.

(Don't go feeling too sorry for him. He just sold - 5 years later - for an extra $100k or so over what he paid)

In our case the "best" and only offer was for $25k over asking. The guy could have got the house for the asking, but he didn't know it.

the true price of something is whatever someone is willing to pay. That's what he was willing to pay. He was willing to pay $25k more than you were asking in order to not run the risk of losing the house in a hot market.

But it is sort of frustrating to be bidding against an unknown amount. I think I'd rather have an open auction.

Even in a "final and best bids" situation, I don't think the seller's agent is obligated to say how many people are in the competition, and of course he/she doesn't say how much anybody's bidding.

We were in the same situation a month ago, saw the house we liked (finally). DH went back to work and I had agent call seller's agent right then and there and tell them we want to put in bid for asking price. She said fine..get it in writing to her and she can take it off MLS, just happend to ask about closing and she mentioned that they had a bidder on Monday..but the buyer wanted to move in right away and the the seller needed more time possibly till middle or end of July. This happened Tuesday 12n, 2 hours later my agent called and said there were 2 other bidders, so now the seller was accepting other bids till closing that day at 5pm....the house would go to highest bidder. Waited out the long night and all day Wednesday. Our RE Agent called late Wed night to say we got the house! I was floored! Turns out the house had 5 bidders! 2 bids for 10k over asking price , 2 asking price, 1 under and us offering 3k over asking price. We got the house...not because of the price....but the flexibility in closing day. Our RE agent recommended that we say this price with closing by Aug 30. Our seller did not turn out to be greedy...he just needed the time and we were able to offer it to him. OF course with 5 bidders and Memorial Day Weekend coming up....we sweated it out for another 6 days before we felt comfortable saying anything about the house. I am breathing a little easier...the seller might even move up the closing date a week earlier, fine by me. I still have to sell my place.

I was annoyed, mad, irritated that even though the seller had decided on a bid...that someone else can come in and take it away in one quick swipe. NOT FAIR!! I found out a little while ago that house generated calls/bids from 15 other families....I'm glad the seller stuck it out with us.

BTW- we live in Central NJ, and in this town everything was priced about 50k-100k over what we got the house for. SO you can see what the mad rush was all about.
Sorry for being so long. AND good luck to everyone out there.

congrats on the purchase, it all worked out for you. And the best of luck to you in the listing and selling of your current home,buying without even being listed is a very aggressive move in todays market.

"born and raised 15 miles west of NYC, and there isn't a better area in the country to live(Northwest Bergen County)..moved last summer to Pa,nw of Philly...and it doesn't hold a candle to my former area..."

Roughly 30 miles west of NYC here, Somerset County. Beautiful horse country area yet still accesible to NYC. I wouldn't want to live anywhere else.

C