I bought a house last August (2018) in San Mateo through Mitch. It was my first home purchase so even though I did a lot of my own research, I had to rely on him a lot.
Conclusion first: I paid way more than I should have for the home and location. The appraisal came out about $75,000 lower than the selling price (how the loan was approved is not relevant). With the current market condition, my home value is about $110,000 under the selling price. Also I had to pay him extra cash (.5% of the selling price) because his contract required 3% commission guarantee. And I ended up in the location that I initially excluded. When I visited the area first time I didn't feel good even though I didn't have all the facts then. And now I really regret coming to this location. So how did all that happen?
I actively started searching in May 2018. That was time I met Mitch in an open house. He was friendly and seemed to be eager. While I didn't like the contract term (3% guarantee), I thought I would give it a try. I told him that I'm not in a hurry and gave him what my budget was. Over the time, he kept asking me about my financial situation, and figured out my maximum than comfortable budget.
I give him a credit for being diligent. Between May and June we went to see many homes. But in a way, he kind of rushed me to see more houses in a short time. He seemed to be really motivated to get me a house "fast." On the other hand, he started complaining that I'm worse than the worst type of buyer (referring to single guys) because I don't have urgency and am picky. In 2018 summer and fall, the housing market in peninsula was in the peak of the history. So finding a home that I like at my budget wasn't easy. But the pressure from Mitch was getting harder. He kept saying that if I wait longer, I will be priced out of the market, the mortgage rate will go up, etc.
I had to slow down July thru mid August because my family was staying with me. As i was resuming in mid August, told him I will stop searching after August, because I had multiple international business trips planned for the rest of the year. I think that motivated him hard to make sure I buy a home before then- not necessarily a bad thing. But I felt that he was more motivated by the fear to loose a client after investing much time. Just during over a week, we saw so many houses to the point I was really exhausted (my job is demanding). He suggested this house in the location that I initially excluded. I said I will take a look as the last stop. Then he said, he knows the seller agent and she is a really sneaky old lady. He was acting really weirdly as he talks about this the other agent. He said "sneaky" so many times. It turned out later that they were related (relatives).
Anyways, I went to see the house and liked the house. I still didn't like the area and didn't know much about the area. But I thought maybe it can work out because I like the house. He said the offer is due the next day. So I rushed to make an offer.
One thing I knew about the area was it was the cheapest areas in SM. Mitch started whispering into my ears something like "this is really high-end, you don't see this kind of houses in this area... imagine this house in Burlingame or Hillsborough, it would go over $3M.." While hinting me a specific number, "that would be a respectful offer.." (Back in my head.. why I have to be respectful?) He tried to influence me to increase the offer reminding me of the number that the seller wants, which was ridiculous number. It seemed he was trying to increase my offer closer to my max budget. He gave me the manipulated comp of the area. Since similar house prices in the area were not even close to what the seller wants, Mitch included a much bigger house (4 bds 3 bth) in his comp which matched my max budget. The house I was looking was 3 bds 2bth, and most of the similar house prices were $100k~$200k lower than the number Mitch hinted me to offer.
After I made an offer (I was the highest bid) there was a counter offer the next day. The counter offer was made only to me. The problem was the time pressure. I was at work and had to make a decision really fast within a couple of hours. He should have reminded me that i'm already the highest bidder and no other counter offer made. And my offer was already too high for the location. Instead, he gave me the strong vibe that if I don't increase my offer this deal can go away because the seller wants a much higher number. I didn't even realize how inflated my first offer was then. But under the pressure, I increased to my maximum budget.
I should have backed out when the appraisal came out so low. But I was afraid I would be priced out following year as Mitch kept telling me. Was exhausted too. But now, I'm bound to this location losing A LOT of money, without knowing when I will recover. Lost opportunity to save. There are more detail but can't write all due to limit on this page. People, be careful. read more