Buying a House Drama

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Cognitive_Squeeze
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Buying a House Drama

Post by Cognitive_Squeeze »

This is my first home purchase, and I had no idea of all the drama involved.

Case: The property is for sale at a listed price of $254K. It has been on the market for less than two weeks. We offer $205K , then $210K and the buyer doesn't negotiate. A few days later, the agent reaches out to us and says that she has a $230+ offer, but would prefer to sell the house to us.


We based our original bid on a similar recently sold property for $275 and provide a discount exercise per our realtor's advice.

Roof: $15K
Minus one less room: $10K
Furnace & water Heater: $6K
Paint: $5
Floors: $6K
Bathroom repair: $6K
Kitchen repairs: $10K
Repair second floor stairs $10K

Both have the tenant income
Both have a double lot, the one we would like to buy is slightly larger.
Garages are the same

Note: I can do much of the work and can obtain plumbing fixtures and equipment at 70% discount. In fact, I have $3K in free fixtures seating in the basement. We have a family member that can help with the roof and repair the stair. We can probably do the work for less than what's noted, but it will require a lot of work.

Anyway, we offered $205 and the owner didn't bother to counteroffer. We raise to $210 and the same thing happens. We didn't bother raising it to $215 or $220 in light of the lack of response. The agent thinks $212 or even $215 is a fair price. Also, she indicated that if pay more than that is only because we really want the place. We are not thrilled with it, and we plan on keeping it as rental after a few years of living there.

Anyway, a few days go buy and the sellers realtor contacts us and says:
"Wanted to check with you to see if your buyer has any further interest in this property. We have received a much higher offer (above $230K) then their last offer, which the seller is considering accepting. However, she would prefer to sell to your clients."
We feel we connected with the Owner and talked about good family times. She loved our daughter.
We didn't have a realtor and disclosed that we had plenty of funds to buy the property. We will need a mortgage, tho'
The owner is emotionally attached to the house. She is present at each showing and could've sold it two years ago after her mother's death. The house had an attic that her mother used to create a rental property when her father passed early in her life. That saved them from loosing the house and gave them extra income. It's a touching story.

Why in the world would she reach out to us and try to sell it for $20K higher than our last bid? I'm tempted to go $225, which means we are paying a little extra to get the deal done and start the renovation work. My wife wants to go up to $230K. My -cheap- gut is telling me $220.

We plan to live/work/repair the house over several years, then buy a single family home and keep this as two unit rental. $800 for upstairs and $1200 for downstairs. We have plenty of money left over to handle the repairs.

I am not a fan of the drama.

With this minimal amount of info, could this is be a bluff?
Last edited by Cognitive_Squeeze on Fri Jul 10, 2015 3:48 pm, edited 5 times in total.
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westie
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Re: Buying a House Drama

Post by westie »

I don't see any drama, you made an offer that was rejected, the owner received a better offer and their realtor is checking to see if you want to offer more. Just say no and you'll never hear from them again.
Longdog
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Re: Buying a House Drama

Post by Longdog »

Tell her, "thank you for showing us the house. We think you should take the higher offer. Best of luck to you." Then move on, and don't look back. It does sound like you're being played.
Steve
adamthesmythe
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Re: Buying a House Drama

Post by adamthesmythe »

> I don't see any drama

No drama, you have a failure to reach an agreement.

It's very simple, for whatever reason the seller thinks the house is worth more than you are willing to pay. Either adjust your thinking about an acceptable price or move on to the next house for sale.
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Toons
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Re: Buying a House Drama

Post by Toons »

No Thank You.
Move On :happy
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ResearchMed
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Re: Buying a House Drama

Post by ResearchMed »

The seller and agent are just trying to push to get a higher price.
That is their right, and it makes sense for them.

Who knows what "story" is being given to others who may have made offers.
(Or maybe you are the only one, and they are simply trying to get you to increase your offer.)

If you don't want to spend more, then as others have said, "Just say no".

You will probably find frequent variations on this theme as you look further.

RM
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Topic Author
Cognitive_Squeeze
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Re: Buying a House Drama

Post by Cognitive_Squeeze »

“Life is really simple, but we insist on making it complicated.” ― Confucius


I'm creating my own drama, it seems.
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Watty
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Re: Buying a House Drama

Post by Watty »

There is always another buyer in the wings.

I would check back in at the end of August to see if the house is still on the market.
Jack FFR1846
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Re: Buying a House Drama

Post by Jack FFR1846 »

They are playing games. Offer $199k and give them one hour to accept because you have found a house in better condition, in a better location on 5 acres for $180k but you like this owner so much better.
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renue74
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Re: Buying a House Drama

Post by renue74 »

Bidding wars only help 3 people in this situation....the seller, the seller's agent, and the buyer's agent.

Don't get emotionally attached to a home. There are plenty of others.

If you really want the home, write a nice thoughtful, handwritten letter about how you would love to live in the home, raise a family in the home, etc. and submit it with your original offer. Maybe even indicate the that offer you supplied is at the top of your young family's budget.

If they don't accept...move on. There are others out there.
stan1
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Re: Buying a House Drama

Post by stan1 »

You are essentially asking the seller to pay for a lot of repairs/upgrades. It looks like you are discounting at retail cost but expect to do the work yourself. Classic low ball technique that may occasionally work but not very often because there are usually other buyers willing to pay more. If she can sell it for $230K why would she entertain offers or even negotiate at $205K or $210K? No drama here. The seller's realtor is doing her job. Many sellers do actually care about their neighborhood and in a multiple offer situation its not uncommon for seller's emotions to come into play in what offer they select. Offer what you think the house is worth, write a nice note, if you really want the house have your daughter draw a picture of it, and send it up one last time. Otherwise keep looking.
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Topic Author
Cognitive_Squeeze
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Re: Buying a House Drama

Post by Cognitive_Squeeze »

Ha!! One must love realtors.


Here is a wonderful and unexpected update
The roof estimate was for $13,000-$14,000 depending on which shingle is selected.
However, buyer with the 2nd offer agreed to our counteroffer (above $240K), I expect the contract to be signed over the weekend.
The inspection will come up with a wonderful shopping list. I wish her well, and hope she can make good money to have a comfortable retirement.

Good luck, we are moving on. :sharebeer
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grettman
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Re: Buying a House Drama

Post by grettman »

Glad to hear you have moved on. I am about to sell my home soon and will be buying again. A key lesson learned from my previous purchases: Buying a house is a business transaction. Yes it is true you are buying a "home" and most folks consider primary residence as just that and not an investment. But at the end of the day, it is business. Which means tamp down emotions. Some of what I read here seems like there was a lot of back and forth that can tug on emotions. Its tough to do I know, but the check the emotions at the door when you are dealing with these folks. Your realtor should help with this too! Who knows how I will do when we buy our next house but I keep reminding myself and my wife...ITS BUSINESS.
Saving$
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Re: Buying a House Drama

Post by Saving$ »

Jack FFR1846 wrote:They are playing games. Offer $199k and give them one hour to accept because you have found a house in better condition, in a better location on 5 acres for $180k but you like this owner so much better.
LOL! I love this.
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Re: Buying a House Drama

Post by itstoomuch »

This is pretty much how the security market/exchanges work. An Ask price and a Bid/offer price. The difference is the Spread.
If you can not abide by the spread, then you need to move on or offer another bid. :annoyed
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TradingPlaces
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Re: Buying a House Drama

Post by TradingPlaces »

Wait a minute. Are they saying that they will sell it to you for $212, while someone offered $230?

If so, definitely, offer $212. But if they are fishing for more info and price, then by all means, tell the agent to get lost.
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ResearchMed
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Re: Buying a House Drama

Post by ResearchMed »

TradingPlaces wrote:Wait a minute. Are they saying that they will sell it to you for $212, while someone offered $230?

If so, definitely, offer $212. But if they are fishing for more info and price, then by all means, tell the agent to get lost.
Who knows if someone else really offered a serious $230k??

And anyway, it's only worth to the OP what the OP wants to pay.

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celia
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Re: Buying a House Drama

Post by celia »

Tico_75 wrote:We based our original bid on a similar recently sold property for $275 and provide a discount exercise per our realtor's advice.

Roof: $15K
Minus one less room: $10K
Furnace & water Heater: $6K
Paint: $5
Floors: $6K
Bathroom repair: $6K
Kitchen repairs: $10K
Repair second floor stairs $10K

Both have the tenant income
Both have a double lot, the one we would like to buy is slightly larger.
Garages are the same
These are not comparable houses, in my opinion. One sold for $275k and the other needs lots of work. Even if all the repairs were done, who says they would end up with the same value? I think you need a better yardstick to measure against.
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jabberwockOG
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Re: Buying a House Drama

Post by jabberwockOG »

As a buyer a house is only worth what you think it is worth. It may be worth less or more to someone else but that is not relevant to the transaction at hand. Sellers are always super motivated to get two or more buyers interested in their house hoping for a higher price and if possible a bidding war. Putting in an offer that is lower than asking will almost always result in a "second buyer" appearing...sometimes it is true sometimes it is complete BS. Know the market and what houses sell for in your area, bid what the house is worth to you and avoid bidding wars like the plague. Be patient, don't fall in love with real estate, there is always another house that will be a good fit.
Last edited by jabberwockOG on Sat Jul 11, 2015 6:29 am, edited 1 time in total.
TradingPlaces
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Re: Buying a House Drama

Post by TradingPlaces »

itstoomuch wrote:This is pretty much how the security market/exchanges work. An Ask price and a Bid/offer price. The difference is the Spread.
If you can not abide by the spread, then you need to move on or offer another bid. :annoyed
I don't know what you are talking about, but this is definitely not how the securities markets work. Not even close. Despite all the horse manure that the securities markets get, the securities markets are a whole lot more functional than real estate markets.
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Re: Buying a House Drama

Post by XtremeSki2001 »

SteveM wrote:Tell her, "thank you for showing us the house. We think you should take the higher offer. Best of luck to you." Then move on, and don't look back. It does sound like you're being played.
This. We walked away and the seller contacted us a month later asking if we were still interested and they'd be willing to accept our previous offer. By this time we found a better home and actually got to see them both and make a decision. We went with the other home. The seller who rejected our first offer had their house sit for 8 more months.
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Topic Author
Cognitive_Squeeze
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Re: Buying a House Drama

Post by Cognitive_Squeeze »

Well, we thanked the seller and wished her well. I passed the neophyte stage on real state buying- assuming that three bid counts for that.

This treatment reminds me of car salesmen I encountered last year or the life insurance salesmen real state is very emotional ad irrational, but I think we learned a good valuable lesson: to follow our family's motto ""stick to the plan and execute".

They played the other buyer -if there was one at all- against himself. It's also possible this was an exercise to see how much solid buyers were willing to pay for that house.

Next time, I will use my gut BS smelling spidey sense and deduct 2%. I must say the comments and advice here were dead on accurate, thanks!
Last edited by Cognitive_Squeeze on Sat Jul 11, 2015 11:36 am, edited 1 time in total.
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Topic Author
Cognitive_Squeeze
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Re: Buying a House Drama

Post by Cognitive_Squeeze »

celia wrote:
Tico_75 wrote:We based our original bid on a similar recently sold property for $275 and provide a discount exercise per our realtor's advice.

Roof: $15K
Minus one less room: $10K
Furnace & water Heater: $6K
Paint: $5
Floors: $6K
Bathroom repair: $6K
Kitchen repairs: $10K
Repair second floor stairs $10K

Both have the tenant income
Both have a double lot, the one we would like to buy is slightly larger.
Garages are the same
These are not comparable houses, in my opinion. One sold for $275k and the other needs lots of work. Even if all the repairs were done, who says they would end up with the same value? I think you need a better yardstick to measure against.
This depreciation exercise was performed by our realtor. I think it includes assumed depreciation in light of the other property's upgrades age. For instance, a kitchen renovation will cost approximately $20K for a basic layout, and not $10K as noted. The roof seems high at $15.

I have no other way to compare property costs, but to trust our realtor's expertise and research on my own to compare prices.
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Kenkat
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Re: Buying a House Drama

Post by Kenkat »

I once sold a computer CPU on eBay. Comparable items were going for around $80. I started mine at $45 with a buy it now of $80. I got an email from someone who said "will you accept $25?". No, I replied. Will you accept $30? No, value of this item is closer to $80+. Will you accept $35?. No, and this is my last reply to you. This item is worth $80+. Use Buy it Now if you want it.

The item sold for $90 eventually.

My point is, to come in at $205k when they are asking $254k on a listing only TWO WEEKS old is an offer that is DOA in my opinion. To then bump to $210k - still DOA. Waste of your time and theirs in my honest opinion. Maybe it is really only worth $205k, but not in the seller's mind.

If the house had been sitting for six months, it would be a different story. If the $240k offer falls through and some time passes, you'd have a better negotiating position. But not at the moment.
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