Why when selling/buying a property do the buyer and seller never meet? (home sales)

Factual Questions
82

This was a trend a few years ago. Our legal eagles now strongly advise against this practice as it could easily lead to a violation of protected classes (which vary slightly from state to state).

Let’s say the prospective buyer says in a personal letter that he is looking forward to using the back yard for his kids, or says the garage would be an ideal place to paint his “Black Lives Matter” signs. If the seller picks one buyer because of these comments, he could be accused of discrimination (first one, familial status, second, racial matters). Both are protected classes, and might generate a lawsuit if a buyer thinks the comment is the reason he was passed over.

For this reason, my boss has instructed me to NOT pass along such personal pleas unless I get the buyer to sign a statement insisting that I follow his instructions and indemnifying our company. We’d probably want to sit down with the buyer’s attorney and go over this situation first. Best to discourage the practice.

83

We met the seller at closing when we brought our current (for now) house in 2019. We didn’t meet the buyer when we sold it recently as we did ‘virtual closing’ via an app (a post-Covid thing I assume), though we got a rent back for a month while we sorted out out new place, and the new owners popped by to say hi (nice old couple, moving to be close to their daughter how just had their first grandkid.) We never met anyone when we brought our new place, but its owned by a trust and has clearly not been lived in for a while.

84

I’ve bought/sold 3 houses. I met the buyers/sellers in all 3.

85

Late last year I sold the house I’d been in for over twenty years. Never have met the buyer.

With the same realtor I bought into a coop apartment complex. I’d met the previous owner, but that was by chance. My new place is two block from my old one, and we’d seen each other when walking our dogs.

Currently my mother’s house is on the market, using for a third time the same realtor, and I doubt we will meet the purchasers.

86

In my case, for a sale that closed in December 2008, there was no survey of the property on file at the Ontario Land Registry office beyond the municipal lot plan, and the only reason I now have a certified survey of the property is that one was required as supporting documentation for a building permit application I applied for in 2018, and I had to hire a surveyor to create one.

Maybe you think that the municipal lot plan constitutes a survey, however the planning department of the City of Toronto doesn’t agree.

Anyways, this discussion has diverged from the OP’s topic.

87

I’m surprised the lender does not mandate an inspection. I mean, doing a drive-by and search of property prices nearby can tell them a given property is within a reasonable price range but it doesn’t tell them if the home is nearly wrecked by (say) termite damage or a meth lab in the basement which would substantially affect the value of the property.

But, they’ve been doing this a long time and know their business well (and I do not). Doubtless they have good reasons for doing things this way.

88

If the contract has a date that the contingencies have to be cleared by. If they are not cleared then the buyer can cancel the sale and get their deposit back. I did it twice.
The 1st time was for an investment property with 7 living spaces. The inspections turned up too many problems and the seller would not answer my agents calls about the problems. As an example, one unit had the power meter removed and tagged off. The date to clear all the contingencies was on a Saturday night. My agent told the seller’s agent to be avable on Saturday. Saturday he did not answer any calls or texts. We signed all the papers canceling the sale and faxed them to his office Saturday afternoon. Monday morning starting at 8:00 am the seller’s agent started calling my agent. She ignored the calls until about 10 AM. The seller’s agent wanted to know if there was anyway to salvage the sale. My agent called and asked me. My answer was the only way I would consider reopening the sale was id the seller was willing to pay a contractor of my choice to make all the necessary repairs and get the power turned back on. If figured that place was going to be a money pit so I really was done.
And I was pissed because I was doing a 1031 exchange and they had put me up against a time limit by their fooling around. I got all my depost back on that one.

On the other experience was sthe house that I did end up buying. I had canceled the sale because the sell was not wanting to give me any credit for all the faults found. They did change their mind and I bought this house.

89

I can add a little more (bear in mind I’m in the UK, which really matters for definitions!)

I’ve bought one flat (US = apartment) and one house here.

Each time I got the property inspected by a Surveyor (US = Inspector) for faults.

I got a quote for how much I could borrow on a mortgage ('loan contract’ in UK; ‘debt security’ in USA) from a building society (‘mutual finance organisation owned by members’ in UK; nearest USA equivalent = ‘credit union’.)
Adding in my spare cash for a deposit showed how much I could afford to offer for a property.

Each time the buyer and seller hired a lawyer and once the purchase price was agreed, the legal chaps would ‘exchange contracts’ , which made the transaction legally binding.

90

Another detail from the UK: House buyers are often part of a chain - that is where you sell your flat to me but are using the money from that sale to buy a house from Fred. Fred is doing the same thing and can’t move until his sale/purchase goes through. If any part of the chain fails, the whole thing collapses.

The solicitors involved all have to agree on a simultaneous exchange of contracts - frequently a Saturday so that the merry-go-round can begin.

When I bought my first house the sellers allowed me to have some stuff delivered and stored in their garage. When their solicitor found out, he was pretty annoyed - pointing out the problems that may have occurred if the sale had fallen through.

The second house I bought - we were in rented accommodation so we had possession for a couple of weeks before moving in to clean, decorate and furnish.

91

My parents bought a house in the late 1940s, paying £2,500 for a three bedroom house in a suburb of London (UK.) They lived there for over 50 years…
In their later years my parents wanted to sell their house and move nearer to my sister and I (in the Midlands.)
They had never considered moving before, so had no real idea what to do. I was happy to pop down and assist.
I got three estate agents (US = realtor) to each visit the house and estimate a selling price…
It was hilarious when the first agent had assessed the house (which was in excellent condition.)
“Based on similar properties selling recently nearby I would put this house on the market for … £270,000.”
My beloved Mum had never considered what inflation had done to the value over 50 years, so loudly exclaimed "Rubbish!’ :astonished:
I had to reassure the agent that all was well. :wink:
Anyway the next two agents came in with similar values (in the range £270,000 - £275,000), so we knew all was well.

Now I promise this next bit is true. :smiley:
After discussion, the house was put on the market for £249,999. (This was partly for a quick sale and partly for legal tax reasons.)
So it was incredibly popular (being sold at £20,000 under market value.)

But just two days after being advertised the estate agent explained there was a promising appointment to view (and as usual he would show the prospective buyer around.)
So the agent was ready when a chauffeur-driven Rolls-Royce drew up outside. The chauffeur smoothly opened the rear door and a well-dressed middle-aged gentleman got out, followed by a stunningly beautiful young woman.
They entered the house and it gradually became clear to Mum that:

  • the man was incredibly wealthy (he was in shipping) and was married
  • the woman was not married
  • the house was for the women to live in by herself (but owned by the man)

So the women says “I love it! It’s just right for me!”
And the man says “I want it - I’ll the full price pay cash. :open_mouth:”

(As you’ll have seen above in the thread, avoiding a ‘chain’ saves a huge amount of time.)
So my parents agreed … and two days later the man went into the bank, produced a suitcase with £249,999 and the house was sold. :heart_eyes:

92

In a hot market, lots of houses get sold without inspection. Many sellers have lots of above list price offers so they have the freedom to pick an offer with the least contingencies (inspection, mortgage) or even take an all cash offer. If you put in an inspection contingency, your offer wouldn’t get a second look.

The lenders don’t seem to care - ours didn’t. If we put in an inspection contingency would wouldn’t have gotten a house. A good realtor with an inspectors eye is a great asset.

93

This was, as I understand, the entire purpose of the computerized land registry system in Ontario. The registry was the final word. It was no longer necessary to pore over a century or two of land titles and surveys (measure the land) of dubious quality, or typos, or random forgotten liens. If it was in the registry, it was real (estate). If it wasn’t in the registry, whether title or lien, the claimant was outta luck. Plus when you get to modern subdivisions, the original huge farmland has been subdivided once into standard lots, so there’s not a lot (Sorry) to dispute.

There was some confusion with my friend. The agent peppered the area with printed flyers. My friend contacted the agent under the impression he was the seller’s agent, or the agent gave him that impression. My friend went and got his own “buyer’s agent” which would be the logical thing to do when buying a fairly expensive property. The agent did not do much more than MLS would have done. I suppose it’s a risk you take when you try to sell a property freelance?

A good appraisal will take into account the state of the property - it just doesn’t delve deep into the possible defects of the building. “Looks like it will need new shingles soon” and a raft of other obvious defects may affect the appraisal. But it’s not expected to discover things like “the basement floods every spring” or “the insulation is deficient”. it’s more of a quick walkthrough (if that) and a comparison to similar properties.

94

And to the OP, we met the sellers of our current house, but we didn’t meet the buyers of the house we sold. My previous house I bought from the owners/developers so we met, but they weren’t living in the unit so it didn’t feel the same. We had no interest in meeting the buyers of our house, we were out of there during the showings and had removed all of our stuff and staged it generically.

I though writing a letter to the buyers sounded like a good idea, but our realtor hated them. He said he wouldn’t present any letters written to us unless we absolutely demanded them. His thought was they interfere with the transaction, which should be analytical, not emotional. We wrote one early in the process but after going through it for a while realized that our offer should speak for us.

95

We met the seller of our first house. She was there when we first saw the house, she was there when we had the inspection done (though the agent insisted that she leave the house), and she was at the closing. She arrived to the closing without keys to the house. She insisted that she didn’t have keys because she never locked the doors. I changed the locks immediately after the closing because I was suspicious. When we sold the house six years later she tried to buy it back. She had a real hardon for that house.

96

[quote=“md-2000, post:93, topic:962085, full:true”]

This was, as I understand, the entire purpose of the computerized land registry system in Ontario. The registry was the final word. It was no longer necessary to pore over a century or two of land titles and surveys (measure the land) of dubious quality, or typos, or random forgotten liens. If it was in the registry, it was real (estate). If it wasn’t in the registry, whether title or lien, the claimant was outta luck. Plus when you get to modern subdivisions, the original huge farmland has been subdivided once into standard lots, so there’s not a lot (Sorry) to dispute.

[\quote]

What you are describing sounds a lot like the Torrens system, which I understand is used in Australia.

Procuring Cause

[quote=“md-2000”]
There was some confusion with my friend. The agent peppered the area with printed flyers. My friend contacted the agent under the impression he was the seller’s agent, or the agent gave him that impression. My friend went and got his own “buyer’s agent” which would be the logical thing to do when buying a fairly expensive property. The agent did not do much more than MLS would have done. I suppose it’s a risk you take when you try to sell a property freelance?
[\quote]

Unfortunately, some agents go out of their way to appear to be representing a seller and a particular property in just this manner. Personally, I think it borders on the unethical, but it is encouraged by many web sites. They will take MLS listings and post them on another agent’s site (not the listing agent’s site), hoping prospective buyers won’t see the fine print or notice that it is someone else’s listing. Buyers will eventually find out what’s going on, but by then, the agent may have established procuring cause. And the buyers often don’t care, since it doesn’t cost them anything anyway.

I spotted this some years ago when I found my own listings on someone else’s site, and requested info from this agent (under another name) to see what would happen. When I reached the agent, he told me he pays a large monthly fee to be able to intercept such buyers.

The MLS allows this practice, but insists that the listing company – not the agent – be listed on the ad. It’s often hard to find.

97

The only way I would make an offer on a house without an inspection would be if it was a brand new house or so under market that I could afford to make major repairs to the house.
I have had mortage companies make the loan on the condition the house passed an inspection.

When you get to view a house to make an offer you are only looking at the surface area’s. You do not know how many repairs will be necessary.

My son and daughter looked at a house where the sell refused to take an inspection contingency. They made an adjustment to the offer based on no inspection. It was turned down. Someone else did make a low offer with no inspection. He missed his guess on the house. The repairs to the house were more that he could make and still make a profit reselling the house after the repairs.

As I have said before a wise seller has the house inspected before placing the house on the market.

If you want I can list some of the things the inspector found on the house we purchased last year.

98

In the greater Boston market this past year this would mean that you couldn’t buy a house unless it was a project house. There were over asking cash offers on many houses without inspection clauses, and you couldn’t compete without waiving it. It’s certainly a calculated risk, but it was the only way to buy something.

99

Here in Southern California, we lost out on a few houses because we did not offer enough over asking. When we were only given 20 minutes to look at this house before making an offer, there was no way I was going to make an offer without the inspection. A contractor estimated to correct all the deficiencies would be about $28,000. Long story made short the seller went ballistic when we insisted on a $15,000 credit for all the problems. But he did accept finally. Or offer was $60,000 over asking with an escalator clause that could have taken it to $80,000.

There are not a lot of cash offers here, so that is different. But if the seller will not accept an inspection clause then the buyer had better be able to determine all the potential problem before making an offer. Other wise the buyer may end up with a money pit.

100

I’ve never heard of offering above the asking price for a house - it just isn’t done here. Most buyers would die before paying the asking price, let alone over it.

101

Last aummer houses were regularly getting $100K over asking around here, often all cash offers. At least one place went for nearly $1M over asking. We went over asking on all of our bids and lost out on all but the last one. It was an insane sellets market. Things cooled off by the fall, we got full asking price for our house.