A hard lesson is learned in one bidding ‘war’

The living room of the apartment that "Jane" and "Jill" lost.

Call them Jane and Jill, clients of mine who searched on their own for many months.  Owners of a weekend place in the Berkshires, they decided it was time to move from their Manhattan rental to an apartment on the Upper East Side.

Finally, the couple found a co-op they loved, even speaking at length with the listing broker to the extent that they tried out a verbal offer on her.  It was only afterward that they decided to bring me into the picture, and their timing was not advantageous.

After calling me, they e-mailed the broker – call her Joy – and let her know that I would be representing them. Of course, that meant that the broker would have to split her commission with me, rather than keeping the whole thing (minus her brokerage firm’s take).

The following Sunday I visited Joy’s open house, told her my name and received neither a welcoming smile or even acknowledgment that she knew why I was there.  In fact, as I left, I asked her if she understood who I was.  “Yes,” she replied icily.  And not another word.

Now that I have that off my chest – though I don’t believe it’s incidental – let me tell you that the one-bedroom apartment with slim views of the East River from the ninth floor is lovely with pleasant kitchen and well-proportioned rooms.

Joy originally listed it exactly a year ago for $469,000.  In April, she dropped the price to $445,000 and raised it to $449,000 in June.  (Think about that for minute.)  In October, the co-op went into contract, but the unit came back on the market in November for $449,000.  In December, the price went down again, to $429,000.

Jill and Jane, who have very strong financials, offered $375,000 through me late last week along with a loan commitment (not just pre-approval) from a respected lender.

Communicating only by e-mail, Joy then said the seller had decided not to counter-offer.  Joy said she had received “several” offers (after how long on the market?) and that the seller wanted everyone’s “best” offer.  She didn’t specify “best and final,” and her request continues to make no sense to me or anyone of the seasoned brokers I’ve asked. Nor did she respond to either of my two e-mails asking what quantity she meant by “several.”

Against my advice to make a best offer that was at least $400,000, my clients went with $386,000, expecting to negotiate back and forth to $400,000.  My advice was to offer what the place was worth to them, hold fast to that price and be content if they lost or ecstatic if they won.

No surprise: They lost.

On Sunday, I was not shocked when they called after apartment hunting again and asked me to try to salvage the purchase.  Now, they wanted to offer $405,000.

Lacking a cell phone number for the broker I now think of as a witch, I e-mailed her Sunday afternoon with an invitation to call me.  I didn’t specify why.  Knowing she carries a BlackBerry, I hoped for, but didn’t really expect, a quick response.  She e-mailed me back the next morning at around 11, saying she was free to talk if I wanted to call her.

When I reached her and explained, ol’ Joy made noises about lawyers and contracts being in progress, even though the seller’s decision hadn’t been made until late Friday.  But, she said with an Antarctic level of warmth and no thank you, she would ask the seller.

Came the decision, in an e-mail yesterday, that the seller wanted to honor his commitment to the winning bidder.  Our offer would be a backup should the transaction fail to materialize.

(Despite the bitterness of defeat that Jane and Jill have tasted, I don’t view the jousting as a war.  As I have written before, to me the word “war” is just a shorthand way of describing what amounts to an auction and the market’s valuation of a property.)

Whether the witch was operating vengefully and in the best interest of her seller, I’ll never know.  But I’ll certainly always harbor doubts about her ethics and question her professionalism.

You may think I’ve ingested too many sour grapes.  I feel sorry for Jane and Jill, to be sure, but I am sure they will find what they want in the not-to-distant future.  It’s just that dealing with so sour a personality as Joy’s has left a bad taste in my mouth.

I guess Joy simply hasn’t learned that what goes around eventually comes around.

But I am certain that my disappointed clients have learned an important lession: The development of a negotiating strategy for the purchase of property is best left to those trusted and experienced brokers who do it day in an out.

That’s a key under-appreciated value that a good broker can add.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

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