Post by mccallister84 on Apr 20, 2015 15:12:45 GMT -5
We are currently house hunting.
Saw a house we both really liked but it was at the tippy top of our budget (425). Realtor put in his normal post showing comments - house shows well, buyers interested, concerned about price. The sellers realtor responds - make an offer. I sold the one next door in October for 385 with one less bedroom, smaller yard and smaller kitchen. Out realtor forwards this to us and says he thinks they may be willing to come down.
Personally, I thought she was trying to justify the cost and didn't sound very open to negotiations. We don't necessarily think the house is over priced, it's just more than we really want to spend and the house isn't 100% perfect for us (it's probably 90%).
Is there any harm with going in with a really low ball offer? Like 385? I was thinking that we could have the realtor say that we were going to move on but since they told us to make an offer we are. If they don't go for it oh well. or is it just a waste of everyone's time?
some additional information - the house has been on the market for 2 plus months with no price reductions. That also doesn't seem to be jiving with the realtors "make an offer" attitude.
I'd give them your highest and best & let them know that. No negotiations. Take it or leave it. Let them know you don't think it's overpriced, but it's more than you can spend. That's how we got our home in TX.
Offering 385 will probably just piss them off and be a waste of time, since she told you a home of significantly less value sold for that previously.
I'd give them your highest and best & let them know that. No negotiations. Take it or leave it. Let them know you don't think it's overpriced, but it's more than you can spend. That's how we got our home in TX.
Offering 385 will probably just piss them off and be a waste of time, since she told you a home of significantly less value sold for that previously.
I do agree with going in with going in a little higher if you are willing to. Offer $400k if you would pay that for it--then they are getting more than the neighbors did for the smaller house.
But if $385k is the max you would pay for this house, I see no issue with offering it. It is not your problem if it pisses them off. And you never know when someone is more desperate to sell than you might realize.
Well, you may incite the seller to post angry stories about your insulting offer on a message board.
But, you really don't have much to lose here except some time, and especially with that feedback from the realtor that they want you to make an offer even though its out of your budget.
For the 2nd house we bought we definitely low-balled (at our buyers agent's strong recommendation) and were unable to reach agreement in several rounds of negotiation, so we moved on to other places. The sellers came back to us a couple of weeks later and asked if we were still willing to offer our last (highest), we said yes, and we eventually bought the house.
ETA - to clarify the "angry stories about your insulting offer" part I wasn't trying to say your offer actually would be insulting, just that we occasionally get those sorts of posts here and I always argue that the buyer is not being insulting but that it's a business transaction.
Saw a house we both really liked but it was at the tippy top of our budget (425). Realtor put in his normal post showing comments - house shows well, buyers interested, concerned about price. The sellers realtor responds - make an offer. I sold the one next door in October for 385 with one less bedroom, smaller yard and smaller kitchen. Out realtor forwards this to us and says he thinks they may be willing to come down.
Personally, I thought she was trying to justify the cost and didn't sound very open to negotiations. We don't necessarily think the house is over priced, it's just more than we really want to spend and the house isn't 100% perfect for us (it's probably 90%).
Is there any harm with going in with a really low ball offer? Like 385? I was thinking that we could have the realtor say that we were going to move on but since they told us to make an offer we are. If they don't go for it oh well. or is it just a waste of everyone's time?
some additional information - the house has been on the market for 2 plus months with no price reductions. That also doesn't seem to be jiving with the realtors "make an offer" attitude.
I probably wouldn't offer $385K if you know that the other house was smaller, etc. unless the market has come down since then. I'd offer what you think the house is worth and what you are willing to pay for it. You could totally lowball them but then they probably will get pissed and not even want to work with you. What is the house really worth and what are you willing to pay for it?
I would, but I would also try to make sure that the price I was offering was substantiated. It seems like $385k is low, especially if a smaller house went for the same price. I think the seller's realtor was hinting at perhaps you coming in a little higher than that, but not quite that low.
I agree with others...if 385 is the highest you'd be willing to pay, you've got nothing to lose. It never hurts to offer! But if you're willing to pay 395, don't offer 385. You risk them not even entertaining the offer or coming into negotiations pissed which won't help your situation. IMO, you want them to know that you LOOOOOVE the home, but absolutely cannot afford the list price. If they know your max, they might be willing to meet you there, knowing that you'll love the home and take good care of it. ("Your max" is what THIS home is worth to you, not the max you're able to spend on the perfect home.)
Real estate is one giant mind game. Fun for some, a nightmare for others.
I'd give them your highest and best & let them know that. No negotiations. Take it or leave it. Let them know you don't think it's overpriced, but it's more than you can spend. That's how we got our home in TX.
Offering 385 will probably just piss them off and be a waste of time, since she told you a home of significantly less value sold for that previously.
Sounds reasonable to me.
We've lowballed in the past, but it didn't work out. We offered $180k on a house listed for $220k. It would've been worth the $220k but for the knob & tube wiring, terrible flooring choices, and cigarette smell throughout. The 70's bathrooms weren't helping its cause either, but were probably fair for the price and house size. The seller declined to counter, but reached out to us 2 months later to see if we were still interested. We had talked ourselves out of it by that point. About 9 months after our original offer, it sold for... right around $180k.
This doesn't really sound like that kind of case though. Ours had all kinds of variables - elderly owner's sentimental attachment (and related price expectation inflation), serious systemic repairs, etc. Yours seems to have a reasonable comp next door that suggests that >$385k is fair, and $420k is still probably fair.
Offering $385k doesn't sound productive to me, but something between $385k and $420k seems totally worth trying. The hard part is putting a number on where your high water mark is on price. Do that before you offer anything, so you don't get sucked in mid-negotiation.
Post by mccallister84 on Apr 20, 2015 15:55:59 GMT -5
Thanks everyone for your thoughts!
Another determining factor is that there is one in the next neighborhood listed for 385 - everything is very similar, except that it lacks a finished basement.
I think we were leaning more towards the second due to the price differential (which makes sense since the basement isn't finished). It's just the two of us right now and we figure we probably won't get much use out of a finished basement until any potential kiddos are five or older so we figured we'd just save the money and have it finished down the line.
And again neither house is 100%. But we've looked at a lot so far and these have been the closest.
The danger is that they reject it outright, instead of countering.
You said it's not overpriced per se. So just because it's expensive to you doesn't mean the house isn't worth that... on the other hand, if they haven't reduced the price in 2+ months, they are either unrealistic about what they will sell it for, or they need to get a certain amount out of it. And, honestly, a house is worth what someone is willing to pay for it.
The danger is that they reject it outright, instead of countering.
You said it's not overpriced per se. So just because it's expensive to you doesn't mean the house isn't worth that... on the other hand, if they haven't reduced the price in 2+ months, they are either unrealistic about what they will sell it for, or they need to get a certain amount out of it. And, honestly, a house is worth what someone is willing to pay for it.
But yeah, I'd go up a little. Around $400k.
Well I do think we'd do what previous people have said - this is what we are willing to pay. Honestly I would have no hard feelings if they said no way. I don't think we would have put in an offer if the realtor hadn't come back with "make an offer." I know we'd be going in low.
As a side note, have you checked zillow or one of those websites to see if the neighbors' listing is still up? Sometimes listings stay up for a while even after they close. I would be curious to know what other features the other house had. Yes it is smaller and having one less bedroom is a big deal but did it have upgrades, etc?
Another determining factor is that there is one in the next neighborhood listed for 385 - everything is very similar, except that it lacks a finished basement.
I think we were leaning more towards the second due to the price differential (which makes sense since the basement isn't finished). It's just the two of us right now and we figure we probably won't get much use out of a finished basement until any potential kiddos are five or older so we figured we'd just save the money and have it finished down the line.
And again neither house is 100%. But we've looked at a lot so far and these have been the closest.
Finishing a basement can be expensive. I'd probably offer $395K as a highest and best offer (or as a starting offer and be willing to go to $400K). You'll spend more than $10K finishing the basement in the other house.
Post by FishChicks on Apr 20, 2015 16:28:52 GMT -5
If you don't care that you don't get the house, but you'd also be truly happy if you did get it, and if you can afford something slightly above $385, then I'd offer something slightly above that. It wont' hurt, and might land you with a better outcome than you'd expected.
That said, my personal experience is that it's best to wait until you find something you're 100% happy with, if that can be possible given your budget.
Another determining factor is that there is one in the next neighborhood listed for 385 - everything is very similar, except that it lacks a finished basement.
I think we were leaning more towards the second due to the price differential (which makes sense since the basement isn't finished). It's just the two of us right now and we figure we probably won't get much use out of a finished basement until any potential kiddos are five or older so we figured we'd just save the money and have it finished down the line.
And again neither house is 100%. But we've looked at a lot so far and these have been the closest.
Finishing a basement can be expensive. I'd probably offer $395K as a highest and best offer (or as a starting offer and be willing to go to $400K). You'll spend more than $10K finishing the basement in the other house.
Oh yea I know it will be pricey. Our long term plan is for me to take a few years off when we first have kids (I'm a teacher). When I went back to work (and I be guaranteed a job) we'd pretty much bank my salary that first year and then use those savings to do the basement.
But thanks again! We have a lot to think about tonight.
If you don't care that you don't get the house, but you'd also be truly happy if you did get it, and if you can afford something slightly above $385, then I'd offer something slightly above that. It wont' hurt, and might land you with a better outcome than you'd expected.
That said, my personal experience is that it's best to wait until you find something you're 100% happy with, if that can be possible given your budget.
Ugh. I know. I do want to wait until we are 100% happy but I just don't know if it's possible. We have seen a ton of properties in person, plus elminated 100s online and so far this is the closest. If it was a little bit closer to where N works we'd be sold on it.
We recently had an appraisal done and I have some friends that have bought and sold recently and we have discussed the ins and outs of appraisals in our area. This information isn't law but it seems to be pretty standard for where I live. An extra bedroom on an otherwise similar house would get you about $5k extra on the appraisal, the yard size would get an extra $1k per 1000 square feet, and the kitchen size and layout wouldn't make a huge difference unless there was a pretty vast improvement. If the house you are considering also has more square footage to accommodate the extra bedroom you would increase somewhere around $125-$150 per foot. These numbers might help when determining how much more the house is worth.
Post by maddiepaddy on Apr 20, 2015 17:18:33 GMT -5
You might want to try calculating the price per square foot for the comps including the house the realtor mentions. If the finishes are similar, it will help you compare irregardless of the differences in finished space (i.e. extra bedroom, smaller kitchen, etc...). I found this to be very helpful when I was thinking through what I felt comfortable offering on my current house.
For example: Say the comp house is 2500 square feet and sold for $385K. The house you're looking at is 2650 square feet and is being offered at $425K. That's $154 a foot vs. $160 a foot. If it were me, and I was comfortable with the amount, I would offer $408K (2650*154) and explain why. Or maybe knock a little bit more off because of the smaller yard.
Post by imojoebunny on Apr 21, 2015 22:16:44 GMT -5
It just depends on your market. Houses on the market here on the market for 2-3 months are over priced and need to drop a scratch, but sometimes, someone will pop in town, not be able to find anything, and be convinced they are getting a deal. Do the comps support it and can you afford it are the questions? Do you think you can get something better?
We rolled the dice and bought a place last year that perfectly suited our needs, we are glad we did because now things are much more expensive for the same kind of house.
Post by mccallister84 on Apr 23, 2015 10:19:34 GMT -5
Non update.
The sellers requested we complete a financial disclosure form. We declined - we are preapproved and told them they could speak with the mortgage company regarding any concerns they may have about our ability to obtain financing.
We don't want them to see that we can afford more on paper and come back with a higher counter since we aren't really willing to go any higher.
Ball is still in their court so at least they didn't reject it all flat out.
The sellers requested we complete a financial disclosure form. We declined - we are preapproved and told them they could speak with the mortgage company regarding any concerns they may have about our ability to obtain financing.
We don't want them to see that we can afford more on paper and come back with a higher counter since we aren't really willing to go any higher.
Ball is still in their court so at least they didn't reject it all flat out.