If You Don't Make An Offer, You Won't Know What You Missed

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How much below the asking price should we offer for a home which we want to buy? Last week we saw a home which will be perfect for us. We are now in the process of pre-qualifying with a mortgage lender to be sure we can afford to buy it. If we decide to make an offer, how much below the asking price should we offer? The real-estate agent says it is a bargain at its full asking price. We agree. Once this house hits the multiple listing book in a week or so I'm sure it will sell quickly. Should we offer the full price to be sure we get the house? A Never offer the full asking price. Well, almost never. Unless you offer less, you will never know at what price the house could be purchased. Please believe me there is no worse feeling than to have the seller accept your first offer. If that happens, you know you probably could have bought for less if you had offered less.

Before you make a purchase offer, ask the real-estate agent to prepare a written competitive market analysis (CMA). This is the same form the listing agent gave the seller at the time the asking price was determined by the seller. Then you can add and subtract value for the pros and cons of the house you want to buy as compared to the recent neighborhood home sales.

The CMA may show you the house is a bargain at its full asking price. But unless your local market is very competitive, I suggest offering at least 5 percent below the asking price. If the seller doesn't accept, you will probably receive a counteroffer at a price somewhat below the asking price. Even if you wind up paying full price, by offering less you will feel much better knowing you tried to negotiate for less.

Q I agreed with my neighbor to buy his acreage. When we met at his attorney's office to close the sale, the attorney had prepared a quit-claim deed. The attorney said he had searched the title and everything was in order. But I thought I should get some title guarantee just in case there is a title problem. All I have is the quit-claim deed. Do I have a problem? A A quit-claim deed conveys whatever title the seller owned. It could be full-fee simple absolute title. Or, if the seller didn't have marketable title, you might have received defective title.

In most states it is customary to convey title by warranty or grant deed. If the title proves defective, the buyer then has recourse against the seller. However, it's not too late to solve your problem. Just buy an owner's title-insurance policy from a title-insurance company. Title insurance on a quit-claim deed is better than a warranty or grant deed. For further details, please consult a local real-estate attorney.

Q I listed my home for sale with broker A. It was placed in the multiple-listing service. Broker B then showed my home to his client who didn't make a purchase offer. The client came back twice to reinspect the house. But about a month later broker C showed my house to the same buyer who made a purchase offer which I accepted. The sale is scheduled to close in about two weeks. However, broker B has notified me that he is entitled to half of the selling commission, since he first showed my house to the buyer and did all the work of finding out answers to the buyer's questions. I feel sorry for broker B, but for some reason the buyer went to broker C to make the purchase offer. Do I have to pay broker B too? A No. You owe the sales commission to broker A who is the listing agent. She then is obligated to split the sales commission with the selling agent who is broker C. Since broker B did not obtain the purchase offer, broker B is not entitled to any part of the commission.

The only possible way broker B could claim a commission would be if the local MLS has a "first showing rule" which entitles the agent who first shows a property to part of the selling commission. However, the dispute between B and C is not your problem. Let the two agents resolve their conflict through the local MLS arbitration procedure.

Bob Bruss' column appears Sundays in the Home/Real Estate section of The Times. Letters and comments should be sent to Bob Bruss, Seattle Times Newsroom, P.O. Box 70, Seattle, WA 98111.