Back in July, 2006, we decided to buy our first home in San Jose, CA. At the time, after reading about home buyer tips, we decided to "hire" a Buyer's agent to help us through the home buying process. We were referred to a company titled "Buyer's Broker" by NAEBA (located at naeba.org)
Within a day of asking for a referral online at NAEBA's website, we were contacted by one Barbara D (works out of the Redwood City, CA office) who offered to assist us with the home buying process. We were informed, upfront, that we'd have to sign a contract with the agent we "hired" and Barbara acted as if she was giving us a break by telling us that we could work with her first and see how we "gelled". So far, so good. Actually, up until we were ready to make our first (and ONLY!) offer, Barbara acted as if she was looking out for our best interests even though she was snipy with me now and then.
After a few days of searching, we found a condo that we liked in San Jose, CA. The unit was listed at $476K and after looking through the CMA, we decided to make an offer for $465K. Right off the bat, she insisted that we sign an exclusive buyer's agent contract with her, and she insisted that the contract be for TWO months. She wanted this done first EVEN before we started writing the offer. When we signed the contract - we really liked the condo and didn't see a problem - then, the woman's colors came shining through and the claws came popping out.
The first thing she did was to insist that we were to put down more down payment in order to make the offer "more attractive" to the seller! Well, we refused. We had already been pre-approved at that point of time and we didn't see why we had to increase our downpayment. The property had been in the market for TWO months at that time and had not received a single offer until then. The seller was getting married and his agent had let on that he was desperate to sell the property, so we knew he'd be glad to just have an OFFER. But Barbara didn't think so. She insisted that we increase our downpayment and also increased interest rates to 6.5% although our lender - CALHFA - had agreed to finance our loan at 5.75%. Her argument was that the seller would not "believe" that any lender would agree to give us the loan at that %. Ummm, I still fail to see how it was any of the seller's business... but it gets even better.
After going through the CMA, we decided to make an offer of $440K. Barbara, "our agent", did not like that we were offering less than asking price. When it came to the part where we discuss home warranties, she said that since we were making an offer of less than 10k, we should pay for the home warranty ourselves!! Her words were "Why should the seller pay the 300 odd dollars it costs for home warranty when he's accepting an offer of 10k less?!" So much for being a BUYER'S agent! Then she insisted on a 3% security deposit and failed to disclose that this downpayment was completely negotiable. In addition, she did not explain that if the deal fell through in case of non-obtainment of finance or for any reason, we could lose the entire deposit. She probably hoped to put us between a rock and a hard place so that SHE could walk away with her commission and d**n the buyers! I have to admit that we made a mistake too - we blindly believed this woman and were so very keen on buying the property and assumed that the deposit was refundable under any circumstances. The next day, the seller made a "counter offer". We had asked for 14 days to conduct the home inspection and he came back asking for the inspection contingency to be removed in 10 days. I seized this chance to make my own counter offer - we'd remove the inspection contingency clause in 10 days IF we could change the terms of the downpayment and the interest rates. Barbara's reaction? "Buyers DO NOT make counter offers, sellers do!"
At this point of time, I lost whatever little trust I had in the woman. In addition, that very day, the business section of the SJ Mercury News carried a small paragraph about pending layoffs in my husband's company and we simply did not feel comfortable signing the counter offer.The sale fell through, we put a stop payment on my deposit check and thanked our lucky stars that we left when the going was still good.
Another thing that this "buyer's broker" failed to disclose was that closing costs are completely negotiable and could be split with the seller in a cool market. We learned this from friends AFTER the fact, when we discussed this with them.
Funnily enough, Barbara took our decision well. When she emailed asking if we wanted to continue receiving listings, I responded saying No, as we wanted to stop the process at this time and would touch base with her as soon as the job issue was cleared up. My husband, however, still had some confidence in her. HOWEVER, that changed after discussing the contract with our experienced friends who had purchased home before. Our friends helped us realize that we could have gotten a better, pro-buyer deal if Ms. Delantoni had guided us better.
When I called to complain to NAEBA in Oct, 2006, they completely REFUSED to take a complaint stating that NOBODY had *ever* complained about Barbara before! Well, DUH, if they refuse to accept *any* complaints, OF COURSE they would have none on file. I later found out that Barbara's boss, a realtor that sells luxury homes in Souther CA, John R, is an important member (or even founder?!) of NAEBA! OF COURSE they were not going to take any action against either Barbara or her employing broker, John R. John, when I contacted him, claimed that Barbara was a "good" realtor and that we had probably just had a "personality" clash.
My suggestion to ALL buyers out there - DO NOT, DO NOT, DO NOT, DO NOT believe that any realtor is working *for* you if you are a buyer. Their bottom line is ALWAYS, ALWAYS, ALWAYS, ALWAYS their OWN commission, even if they CLAIM to be a "buyer's broker" as our experience has shown! Barbara NEVER showed us any For Sale By Owner Properties - which was a dead giveaway to her intentions and motivations. We got off easily but you may not be so lucky. Never, ever, ever believe that anyone is working for you. Remember, in the homebuying process, you, the buyer, are on your own.