Making an offer today

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DJB
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Making an offer today

Post by DJB »

After much deliberation and input from this board, I am pulling the trigger on making an offer on a 1-BR condo. Thanks to everyone who has offered their input.

I will disclose financial details at a later date. My offer is well below asking price and somewhat lower than my agent suggested. I realized that my goal in this deal isn't to squeeze every penny from the owners. I could have gone that route, and frankly I 'maximize' in most other areas of my life. I want a good deal, but I it doesn't have to be a great deal, and I don't want to take another person to the cleaners.

I found my agent through Redfin. I could have shopped around more, but the first person and I hit it off pretty well. He has been a very good resource. I've looked at 8-10 condos in person and dozens more online. I weighed various mortgage options and ultimately decided on 30-year fixed with 25% down. I could have done 15 years for a lower interest rate, but I don't want to feel 'house poor.' Also, the 30 allows me to max all my tax advantaged accounts. I've shopped around for my lender, and I will probably go with AIMLoan, since their rates were considerably lower. I've researched title companies, and learned they one can save a couple hundred bucks by shopping around. I knew intellectually that taxes/closing costs were high when buying/selling. Now I really appreciate it.

Some of my favorite resources:
  • Bogleheads (of course)
  • Redfin for searching for properties online
  • mtgprofessor.com for all things lender-related
  • http://clta.titlewizard.com/wizard/step/county for searching title companies
  • Friends who've bought in the area
  • My parents (gasp!)
Now the negotiation begins. It will be interesting. I really like this property, but from the listing price I think the owners may value it more than I do. I guess we will find out soonif we share any middle ground. I have a number in my head that I know I can walk away happy. So I guess there is nothing to lose.

I will post periodic updates as things move along. I couldn't have done it, at least not nearly as wisely, without you.
staythecourse
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Re: Making an offer today

Post by staythecourse »

DJB wrote:Now the negotiation begins. It will be interesting. I really like this property, but from the listing price I think the owners may value it more than I do. I guess we will find out soonif we share any middle ground. I have a number in my head that I know I can walk away happy. So I guess there is nothing to lose.
Just don't make the mistake ALL homebuyers make and fall in love with the property UNTIL you have the keys in your hand. The best negotiators in home buying are the ones who don't "need" to move and are fine if it doesn't work out.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
LongerPrimer
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Re: Making an offer today

Post by LongerPrimer »

if you wanted to max out TA accts. then why don't you do a 7 or 5 variable?
Confuscious
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Re: Making an offer today

Post by Confuscious »

And remember that one day you will be in the sellers shoes and I'm sure you would prefer a quick enjoyable sale. I know buyers who will offer considerably less than asking if they know the seller did the same when they bought.

Good luck!
bloom2708
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Re: Making an offer today

Post by bloom2708 »

The danger of a very low offer in a Sellers market is they may simply not respond or even counter offer.

In actuality it CAN hurt to offer well below. The realtor typically has a % range where most offers fall within asking.

Similar to how it CAN hurt to over price your home on the selling side.

It will be interesting to see what happens. Good luck. Go with the 7/1 ARM.
ieee488
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Re: Making an offer today

Post by ieee488 »

So after asking for advice whether you should or not with the general consensus being no, you ignored the advice.

[OT comment removed by admin LadyGeek]
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Re: Making an offer today

Post by LadyGeek »

This thread is now in the Personal Finance (Not Investing) (buying a home - financial aspects).

Here's the previous thread: Leaning towards buying a 1-BR condo in Bay Area

DJB - I also fixed your list format in the first post.
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denovo
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Re: Making an offer today

Post by denovo »

LongerPrimer wrote:if you wanted to max out TA accts. then why don't you do a 7 or 5 variable?

Because most people won't or can't pay off their home in 7 years and it would be a foolish not to lock in a low rate for 30 yrs.
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DJB
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Re: Making an offer today

Post by DJB »

ieee488 wrote:So after asking for advice whether you should or not with the general consensus being no, you ignored the advice.

[OT comment removed by admin LadyGeek]
I did ask for advice, but there didn't seem to be consensus either way. There was definitely a split with more people than I expected encouraging me to go for it. The main reason against it was resale value, and some suggested I buy a 2BR-2BA instead. I looked into these. The only way I could afford it would be to move to a less desirable area, which I wasn't prepared to do. And from a financial standpoint, the demand may not be as great when it's time to sell, but as long as I get a good enough deal on the buying side, I think it's a wash.

I wasn't really after consensus, since I know I'd never get it. I wanted different opinions and considerations so that at the end of the day I can make a thoughtful choice on my own. That's exactly what I did.
Jack FFR1846
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Re: Making an offer today

Post by Jack FFR1846 »

Good luck. Don't worry about what the agent says for an offer range. Remember that the agent works for the seller. I had an agent tell me that anything more than 5% below the asking price would be an insult. My present house was listed for $380k. I offered $225k. I bought it for $226.5k.

I don't listen to selling agents' advice.
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LongerPrimer
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Re: Making an offer today

Post by LongerPrimer »

denovo wrote:
LongerPrimer wrote:if you wanted to max out TA accts. then why don't you do a 7 or 5 variable?

Because most people won't or can't pay off their home in 7 years and it would be a foolish not to lock in a low rate for 30 yrs.
I will reword to 7yr or 5yr ARM
:greedy
staythecourse
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Re: Making an offer today

Post by staythecourse »

Jack FFR1846 wrote:Good luck. Don't worry about what the agent says for an offer range. Remember that the agent works for the seller. I had an agent tell me that anything more than 5% below the asking price would be an insult. My present house was listed for $380k. I offered $225k. I bought it for $226.5k.

I don't listen to selling agents' advice.
I would go a step further and say don't listen to your buyer's agent either (if you have one). As David Swensen would say it is always important to make sure you have the same alignment of interest as the other person. A buyer's agent my work for you, but he does not get paid unless the sale is made. He/ she will do what it take within reason/ ethics to push for a sale. Any other outcome means they go home empty handed after doing all the work.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
denovo
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Re: Making an offer today

Post by denovo »

LongerPrimer wrote:
denovo wrote:
LongerPrimer wrote:if you wanted to max out TA accts. then why don't you do a 7 or 5 variable?

Because most people won't or can't pay off their home in 7 years and it would be a foolish not to lock in a low rate for 30 yrs.
I will reword to 7yr or 5yr ARM
:greedy
My point stands. The rate still will change later. ARMs are pushed by banks because these low FRM's aren't good deals for them.
"Don't trust everything you read on the Internet"- Abraham Lincoln
LongerPrimer
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Re: Making an offer today

Post by LongerPrimer »

I'd be guessing that OP is a young lady of 29. "No kids", something a guy would never say.
I have a son 29, purchased a 2bed/2bath, this past July. Originally he was looking for a 1 bd but we convinced him to go for 2+2 for resale value and incase he has someone move-in as a permanent or guest. He has a 7/1 @2.625%. A 30 yr was 4.0%. The odds are that within 9 years, he will sell or rent out this place when a future wife makes her decision.

If OP may want to do an analysis to discover the breakeven point. And make some guesses for the future. :?:
LongerPrimer
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Re: Making an offer today

Post by LongerPrimer »

My point stands. The rate still will change later. ARMs are pushed by banks because these low FRM's aren't good deals for them
FRM = ??
denovo
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Re: Making an offer today

Post by denovo »

LongerPrimer wrote:
My point stands. The rate still will change later. ARMs are pushed by banks because these low FRM's aren't good deals for them
FRM = ??
fixed rate mortgages
"Don't trust everything you read on the Internet"- Abraham Lincoln
DualIncomeNoDebt
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Re: Making an offer today

Post by DualIncomeNoDebt »

DJB wrote:Now the negotiation begins. It will be interesting.
It won't be. Generally, three counters and either you have a deal, or you don't. And if you lowballed, which it sounds like you did, they may not even respond. I know how I would respond: my counter is full asking price. Don't like it? Walk.
gloomydog
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Re: Making an offer today

Post by gloomydog »

Most buyer agents get paid only if the sale goes through. But the redfin agent the OP has picked is advertised as being paid for good service by redfin - they get paid as long as they've provided good service, even if deal doesn't go through, is how I understand it.

OP, you can offer whatever you like, but the seller may not respond or may get furious like a seller I had some years ago. But it's no big deal, just shrug it off and move on to the next. :D The seller who got mad yelled at my agent and had his agent yell at my agent too, but 1 year later re-approached us to find out if we're still in the market and interested. We were not, had purchased another. They ended up selling about 2.5% less for what my max offer was, and almost 3 years after their house listed (I got interested 1 year in).

Even if this is *the* perfect house for you and the seller doesn't respond, you will still have a chance if you've priced the correctly.
adamthesmythe
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Re: Making an offer today

Post by adamthesmythe »

When negotiating for real estate there can be considerable emotion (and non-rational behavior) on both sides.

A rather low offer risks no counter from the seller, and possibly a negative response to a subsequent offer that might have been acceptable before. (I know this doesn't make sense. Emotion.)

If you want that particular place then it is worth listening to a buyer's agent recommendation for a first offer. If you are not strongly committed and there are other options low-ball may work.
cherijoh
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Re: Making an offer today

Post by cherijoh »

DJB wrote:After much deliberation and input from this board, I am pulling the trigger on making an offer on a 1-BR condo. Thanks to everyone who has offered their input.

I will disclose financial details at a later date. My offer is well below asking price and somewhat lower than my agent suggested. I realized that my goal in this deal isn't to squeeze every penny from the owners. I could have gone that route, and frankly I 'maximize' in most other areas of my life. I want a good deal, but I it doesn't have to be a great deal, and I don't want to take another person to the cleaners.
Here are some things that might influence whether or not the owner's are willing to negotiate:
1) How long has the unit been on the market and have they already dropped the price one or more times?
2) How does the price compare to other sales of 1-BR units in the complex. One thing about condos is that you are likely to have identical floor plans for comparison purposes. What are the recent sales prices for other units? Are they actually overpricing their unit for the market?
3) Are there any other 1-BR units up for sale at this time? Competition could effect their willingness to negotiate.
4) How long have they owned the place and how much did they pay for it? People tend to outgrow 1-BR condo's fast, so they could have bought it when prices were higher and don't want to take a loss. Or they could be thinking of the "round trip" on closing costs and want to at least "break even" net of costs.
5) Have they done any upgrades - new kitchen or bath, custom draperies, etc? People often overvalue what they can re-coop on improvements.
6) Is the unit currently occupied? (Would they be willing to wait it out to get their price or have they already moved and are carrying two mortgages?)
7) What are the homeowner covenants regarding rentals? (If it doesn't sell, could they rent it out?)

People are funny and can behave irrationally. If the house is overpriced and their realtor was trying to get them to reduce the price, they may be amenable to negotiation. Or they can stick to their guns and eventually end up accepting far less than your offer. If on the other hand, the unit is reasonably priced, recently on the market, and/or getting a reasonable amount of showings, they could blow you off.

My sibling & I ended up selling the family home after my Mom passed away eight years ago. Based on the realtor's recommendation, we priced the house to sell in a reasonable time frame - we wanted to avoid any shelf-life issues. Plus the realtor mentioned that housing prices were softening after a huge run-up over the past several years. The first offer we received (within 2 weeks of putting it on the market) was low ball and the realtor suggested we just ignore it - which we did. The second offer, which was received a few weeks after the first one, was more reasonable and we negotiated that one to a successful sale.
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DJB
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Re: Making an offer today

Post by DJB »

You hit the nail on the head with #4. My offer was rejected.

Quick update (with numbers) for those interested. The condo I made an offer on is listed right around $300K. I offered $255K, which I believe is on the low end of the ballpark (but still in the ballpark) based on what comparable properties have sold for recently. Seller verbally told the agent that she needs 289K to break even and really wants that. (she paid nearly 350K right at the peak). No counter offer. I would be willing to negotiate my offer price, but I think 289K is crazy for what it is. I would be shocked if she could get that much today. Unit has been listed for about 6 weeks and my offer was the first one she received. I told my agent to tell hers that I am interested and to keep me in mind if she decides to reconsider her price. Part of the problem is square footage listed is significantly higher than it actually as. I'm fine with the small size, but I believe she (and maybe her agent) are using comp pricing to much larger units. My agent told me he shared this with them.

Any suggestions about where to go from here? I haven't fallen in love with the condo, but of the ones I've seen, it's the one that best matches my criteria, so while I am completely prepared to walk away, it would be nice if we could work something out. She must be paying 2K/month to let the unit sit empty, so I'm guessing that in a month or two she will lower the asking price. I'm not looking for a steal, but I don't want to overpay and end up in her position years from now. Given her position, she is really after "top-dollar," and while I am prepared to negotiate and make a fair deal, I don't feel prepared to pay top dollar for anything. Should I make another offer in a couple weeks? Wait a couple months? Wait for her to get back in touch with me?

Thanks again for your continuing input.

Thoughts? Questions?





cherijoh wrote:
DJB wrote:After much deliberation and input from this board, I am pulling the trigger on making an offer on a 1-BR condo. Thanks to everyone who has offered their input.

I will disclose financial details at a later date. My offer is well below asking price and somewhat lower than my agent suggested. I realized that my goal in this deal isn't to squeeze every penny from the owners. I could have gone that route, and frankly I 'maximize' in most other areas of my life. I want a good deal, but I it doesn't have to be a great deal, and I don't want to take another person to the cleaners.
Here are some things that might influence whether or not the owner's are willing to negotiate:
1) How long has the unit been on the market and have they already dropped the price one or more times?
2) How does the price compare to other sales of 1-BR units in the complex. One thing about condos is that you are likely to have identical floor plans for comparison purposes. What are the recent sales prices for other units? Are they actually overpricing their unit for the market?
3) Are there any other 1-BR units up for sale at this time? Competition could effect their willingness to negotiate.
4) How long have they owned the place and how much did they pay for it? People tend to outgrow 1-BR condo's fast, so they could have bought it when prices were higher and don't want to take a loss. Or they could be thinking of the "round trip" on closing costs and want to at least "break even" net of costs.
5) Have they done any upgrades - new kitchen or bath, custom draperies, etc? People often overvalue what they can re-coop on improvements.
6) Is the unit currently occupied? (Would they be willing to wait it out to get their price or have they already moved and are carrying two mortgages?)
7) What are the homeowner covenants regarding rentals? (If it doesn't sell, could they rent it out?)

People are funny and can behave irrationally. If the house is overpriced and their realtor was trying to get them to reduce the price, they may be amenable to negotiation. Or they can stick to their guns and eventually end up accepting far less than your offer. If on the other hand, the unit is reasonably priced, recently on the market, and/or getting a reasonable amount of showings, they could blow you off.

My sibling & I ended up selling the family home after my Mom passed away eight years ago. Based on the realtor's recommendation, we priced the house to sell in a reasonable time frame - we wanted to avoid any shelf-life issues. Plus the realtor mentioned that housing prices were softening after a huge run-up over the past several years. The first offer we received (within 2 weeks of putting it on the market) was low ball and the realtor suggested we just ignore it - which we did. The second offer, which was received a few weeks after the first one, was more reasonable and we negotiated that one to a successful sale.
Wellfleet
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Re: Making an offer today

Post by Wellfleet »

Let it sit for a few weeks and have your agent express your continued interest weekly. This happened to us in 2012. The house had a pool adjacent to the foundation that I believe lowered the value as I would need to remove it. The seller disagreed and rejected my offer. We said thanks but no thanks to countering and a few weeks later we got a call to see if we were interested in our offer. Nope because we moved on.
staythecourse
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Re: Making an offer today

Post by staythecourse »

Interesting that the owner showed you her cards (if it is the truth) with the exact number she is looking for. As I mentioned before do not fall in love with the place. This goes for picturing yourself in the property already as that is a form of falling in love with residential property.

There is no right or wrong. If you really want it counter with 10% less then what she needs or counter with what you feel is fair. If you really don't care then I would just leave it as is and EARNESTLY look elsewhere. Who knows you might find a property better then this one.

What I would not do is play games as the owner has been blunt with what she/ he is looking for so this is not going to play out as a back and forth until you hit a middle number between you two.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
LongerPrimer
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Re: Making an offer today

Post by LongerPrimer »

^ the showing cards of seller is pretty much known thru Trulia-Zillow-Redfin. Seller is holding a fairly weak hand.
OP has stronger cards. With such a low offer, the question is whether the offer is large enough to cover the existing mortgage. And if it doesn't, then will the mortgage holder accept a short sale? :annoyed
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midareff
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Re: Making an offer today

Post by midareff »

An offer 15% under the asking would not get an answer from me either if I was the seller. You have to come to grips with the reality some sellers are not sellers. ... they are hoping for something that will not happen. The comps are the comps and fair market is what it is. If your realtor can't sell the deal at fair market look elsewhere.
bigred77
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Re: Making an offer today

Post by bigred77 »

DJB wrote:You hit the nail on the head with #4. My offer was rejected.

Quick update (with numbers) for those interested. The condo I made an offer on is listed right around $300K. I offered $255K, which I believe is on the low end of the ballpark (but still in the ballpark) based on what comparable properties have sold for recently. Seller verbally told the agent that she needs 289K to break even and really wants that. (she paid nearly 350K right at the peak). No counter offer. I would be willing to negotiate my offer price, but I think 289K is crazy for what it is. I would be shocked if she could get that much today. Unit has been listed for about 6 weeks and my offer was the first one she received. I told my agent to tell hers that I am interested and to keep me in mind if she decides to reconsider her price. Part of the problem is square footage listed is significantly higher than it actually as. I'm fine with the small size, but I believe she (and maybe her agent) are using comp pricing to much larger units. My agent told me he shared this with them.

Any suggestions about where to go from here? I haven't fallen in love with the condo, but of the ones I've seen, it's the one that best matches my criteria, so while I am completely prepared to walk away, it would be nice if we could work something out. She must be paying 2K/month to let the unit sit empty, so I'm guessing that in a month or two she will lower the asking price. I'm not looking for a steal, but I don't want to overpay and end up in her position years from now. Given her position, she is really after "top-dollar," and while I am prepared to negotiate and make a fair deal, I don't feel prepared to pay top dollar for anything. Should I make another offer in a couple weeks? Wait a couple months? Wait for her to get back in touch with me?

Thanks again for your continuing input.

Thoughts? Questions?

Seller needs 289k to sell the property without bringing a check themselves to closing. Anything less will involve a short sale or cash from the seller (which is painful for the seller in many ways).

Its time to walk away and forget this property. Pretend its not on the market. If they reach out to you tell them you need a much better price then 289k.


A side note... In my city and I think many other major cities, if a property is priced relatively correctly, an offer less than 90% of the asking price is usually not received well. In my experience, if I thought the property was priced that incorrectly, I'd just move on down the road and assume the seller was either not motivated to sell at a fair price or not looking at their property rationally.

Believe me, another opportunity will present itself (in the form of a fairly priced property that meets your criteria) eventually. Don't worry about missing out.
staythecourse
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Re: Making an offer today

Post by staythecourse »

LongerPrimer wrote:^ the showing cards of seller is pretty much known thru Trulia-Zillow-Redfin. Seller is holding a fairly weak hand.
OP has stronger cards. With such a low offer, the question is whether the offer is large enough to cover the existing mortgage. And if it doesn't, then will the mortgage holder accept a short sale? :annoyed
The 289k data is NOWHERE to be found, because it involves multiple factors: Price the house is bought (only available public info.), down payment placed, current outstanding mortgage, current price (can be gotten close via comps.), closing costs for the seller, any costs they poured into the house recently which they hope to get back, etc...

No matters in the end the one with the strongest hand, like in any negotiation, is the one who needs it more. I would think in selling and buying houses to live in the advantage goes to the one who hat the time... Either the person does not need to sell at x time or move in to a new location on y date.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
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steadyeddy
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Re: Making an offer today

Post by steadyeddy »

bigred77 wrote: A side note... In my city and I think many other major cities, if a property is priced relatively correctly, an offer less than 90% of the asking price is usually not received well. In my experience, if I thought the property was priced that incorrectly, I'd just move on down the road and assume the seller was either not motivated to sell at a fair price or not looking at their property rationally.
Completely agree. It's often better to let the price drop down the reality on its own than to make a "low ball" offer and hurt feelings. We offered 90% of asking price and closed at 94% of asking price, but we only made our offer after the price had dropped 15% already. We wouldn't have been able to negotiate off that initial number...too much anchoring working against us.
4nursebee
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Re: Making an offer today

Post by 4nursebee »

OP, how old are you?
Pale Blue Dot
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DJB
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Re: Making an offer today

Post by DJB »

4nursebee wrote:OP, how old are you?
I am 29.
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DJB
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Re: Making an offer today

Post by DJB »

steadyeddy wrote:
bigred77 wrote: A side note... In my city and I think many other major cities, if a property is priced relatively correctly, an offer less than 90% of the asking price is usually not received well. In my experience, if I thought the property was priced that incorrectly, I'd just move on down the road and assume the seller was either not motivated to sell at a fair price or not looking at their property rationally.
Completely agree. It's often better to let the price drop down the reality on its own than to make a "low ball" offer and hurt feelings. We offered 90% of asking price and closed at 94% of asking price, but we only made our offer after the price had dropped 15% already. We wouldn't have been able to negotiate off that initial number...too much anchoring working against us.
I have heard this before, but I have never quite understood this. If I were selling a place in a hot market and I hadn't received an offer in 6 weeks, I would be glad to receive ANY halfway decent offer. At least it's a starting point. Even if I received a laughable offer, I can't imagine feeling offended - at worst, mildly annoyed for having wasted 10 seconds responding to an offer I wouldn't ever take. And it might help me reconsider my price point since all the well-priced units here sell in days. Fair point that maybe I shouldn't have made an offer at all and waited for the price to drop on its own. But I figured it couldn't hurt to ask, especially knowing my intentions were honest and I genuinely want to strike a fair deal.
bluejello
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Re: Making an offer today

Post by bluejello »

DJB wrote: I have heard this before, but I have never quite understood this. If I were selling a place in a hot market and I hadn't received an offer in 6 weeks, I would be glad to receive ANY halfway decent offer. At least it's a starting point. Even if I received a laughable offer, I can't imagine feeling offended - at worst, mildly annoyed for having wasted 10 seconds responding to an offer I wouldn't ever take. And it might help me reconsider my price point since all the well-priced units here sell in days. Fair point that maybe I shouldn't have made an offer at all and waited for the price to drop on its own. But I figured it couldn't hurt to ask, especially knowing my intentions were honest and I genuinely want to strike a fair deal.
It really depends on the seller's psychology. There are "need to sell right now" people — maybe they are getting a divorce, maybe they got a new job in a different state, maybe they've already committed to buying a new house and absolutely must sell their existing place ASAP. These people will be happy to receive any offer, even a lowball one, especially if it comes without a mortgage contingency. When I am looking for rental properties, these are the types of people I like to buy from.

And then there are "opportunistic sellers". These may be investors who bought looking for appreciation and can afford to hold out until they get it, or maybe they are people who are just thinking about upgrading to a new place, but there's no real time pressure for them to sell. Opportunistic sellers are willing and able to wait for a high bid. And sometimes they get it.

Sounds like you're dealing with one of the latter. The advantage you have in this negotiation is that you don't NEED to buy. There's no time pressure for you, so you can afford to keep looking at other places while your seller considers her options.
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dumbbunny
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Re: Making an offer today

Post by dumbbunny »

The seller is testing the market in the first 4-6 weeks. Your offer has been the only offer so they are priced too high and my guess is the seller doesn't want to face reality and lower the price. And if they do it won't be as low as your offer. I'd keep looking.
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sliu
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Re: Making an offer today

Post by sliu »

It's an unfortunate turn off events but as some others have suggested, check your emotions at the door and move on in your search. Don't get too caught up with what the seller's thinking *might be* because people are irrational at the best of times :happy

It's a good learning experience as this sounds like you're first home purchase. Time is definitely on your side.
ieee488
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Re: Making an offer today

Post by ieee488 »

bluejello wrote: And then there are "opportunistic sellers". These may be investors who bought looking for appreciation and can afford to hold out until they get it, or maybe they are people who are just thinking about upgrading to a new place, but there's no real time pressure for them to sell. Opportunistic sellers are willing and able to wait for a high bid. And sometimes they get it.
My mother's former neighbor was this type.
The house was a mess. Yet the location was very desirable.
The buyers bought it even though the house was in worst shape than a similar house in much better shape on the same court that was priced only slightly higher.

All the seller needs is ONE buyer willing to buy at that price.

The seller needs a place to stay too. Why sell at a lost?
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ieee488
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Re: Making an offer today

Post by ieee488 »

DJB wrote: But I figured it couldn't hurt to ask, especially knowing my intentions were honest and I genuinely want to strike a fair deal.
To you it was a "fair" price. Apparently not so to the seller.
Don't act as if you are doing the seller a "favor" by offering a "fair" price.
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soccerdad12
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Re: Making an offer today

Post by soccerdad12 »

I don't understand why anyone feels the OP did something wrong with what they offered. The seller probably spent all of 1 minute deciding it wasn't viable for them. No harm, no foul. Additionally, the value of the home currently has nothing at all to do with what the seller paid for it. It may make a difference in what the seller will take for it, but shouldn't have anything to do with market value.
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tainted-meat
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Re: Making an offer today

Post by tainted-meat »

soccerdad12 wrote:I don't understand why anyone feels the OP did something wrong with what they offered. The seller probably spent all of 1 minute deciding it wasn't viable for them. No harm, no foul. Additionally, the value of the home currently has nothing at all to do with what the seller paid for it. It may make a difference in what the seller will take for it, but shouldn't have anything to do with market value.
I agree with your post. If the buyer has the time and patience, he could go around and offer on any property at a price he felt appropriate. If someone gets offended, by a 'low' offer, then that person is way too sensitive.
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DJB
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Re: Making an offer today

Post by DJB »

ieee488 wrote:
DJB wrote: But I figured it couldn't hurt to ask, especially knowing my intentions were honest and I genuinely want to strike a fair deal.
To you it was a "fair" price. Apparently not so to the seller.
Don't act as if you are doing the seller a "favor" by offering a "fair" price.
I've never said anything about doing the seller a favor. I didn't make an offer out of the goodness of my heart. But I don't think I hurt anybody, either.
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DJB
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Re: Making an offer today

Post by DJB »

tainted-meat wrote:
soccerdad12 wrote:I don't understand why anyone feels the OP did something wrong with what they offered. The seller probably spent all of 1 minute deciding it wasn't viable for them. No harm, no foul. Additionally, the value of the home currently has nothing at all to do with what the seller paid for it. It may make a difference in what the seller will take for it, but shouldn't have anything to do with market value.
I agree with your post. If the buyer has the time and patience, he could go around and offer on any property at a price he felt appropriate. If someone gets offended, by a 'low' offer, then that person is way too sensitive.
Thanks for both of you. I'm new to this house buying thing, and I'm glad to know that some people don't think my approach was hurtful.

Interestingly, I just stumbled upon this condo on Craigslist now available to rent at $1800/mo. Looks like they tested the selling market, realized it wasn't great, and moved on to plan B. That's probably what I would do in their situation, too. It's unlikely they're even covering their costs with this rent, but if the selling market improves, it may turn out well for them. In the meantime, I will look to find a match with a motivated seller.

I appreciate the ongoing commentary and input.
ieee488
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Re: Making an offer today

Post by ieee488 »

DJB wrote:
ieee488 wrote:
DJB wrote: But I figured it couldn't hurt to ask, especially knowing my intentions were honest and I genuinely want to strike a fair deal.
To you it was a "fair" price. Apparently not so to the seller.
Don't act as if you are doing the seller a "favor" by offering a "fair" price.
I've never said anything about doing the seller a favor. I didn't make an offer out of the goodness of my heart. But I don't think I hurt anybody, either.
I didn't say you hurt anybody.
But your follow-up posts are starting to sound like you are taking as a personal affront that your so-called "fair" offer wasn't accepted.
If you are viewing this as a purely business transaction, then just move on.
There is no need to dwell on why the seller did not accept your offer.
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bloom2708
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Re: Making an offer today

Post by bloom2708 »

Is this an opportunity to rent the condo? How does $1,800 compare to your current rent?

Live in it, test drive it. Buy it on the next dip or determine you really aren't interested in buying it.
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Traveller
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Re: Making an offer today

Post by Traveller »

A few comments:
1) I too never understood the "you might offend' concern when making an offer. Offer what you are willing to pay (or close to it to leave a bit of negotiating room). You have the right to offer whatever you want and seller has the right to respond however they want. If they dont even counter, then you werent playing in the same ball park anyway.
2) Wait them out - I had one home I purchased fall through initially, but the seller later came back after they realized they set their price a bit too high.
3) There was some speculation that the $289k is the sellers "get out clean" number where they would not need to show up at closing with a check. I had a similar belief when I purchased my current home. I offered, they countered above what I was willing to pay, and I responded that I am sticking with my original offer but would agree to buy for cash some furnishings in the home (furniture and some artwork - fairly valuable stuff that really went well in the home). I found out at closing that the amount of this side-deal gave the seller the cash he needed to walk away clean. (note: seperate transaction, you cant comingle real and personal property under new rules at least in my state).
4) If they are now renting the place out and the rent is close to what your financing cost would have been, I might approach them with an offer to lease with an option to buy (with some percentage of the lease going to down payment) at some future date.

Lastly, anytime a deal fell through for me something better always came along.
Savvy
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Re: Making an offer today

Post by Savvy »

My advice: Be patient.

I don't think this is the place for you. You would know if it was. Don't settle. FWIW: We are first-time home buyers. We closed in April.

We made an offer on a house in February that ultimately fell through. At the time, I couldn't imagine NOT getting that house...it was perfect in so many ways (including price) and...interestingly...I like the house we ended up buying a lot more!

People always told us the same thing: Be patient. All I could think was this "No, you don't understand, we have to act now because of XYZ so I need to buy this house" I was wrong, patience really paid off. Thankfully we didn't overbid on the house in February.

Finally, this helped us a lot:
http://www.mrmoneymustache.com/2013/09/ ... y-a-house/

Best of luck!
Savvy
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runner9
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Re: Making an offer today

Post by runner9 »

I'd keep looking. Keep the current one in mind if it's still available in several months and/or the price is lowered. Maybe you'll find something you like better and/or better priced in the meantime.
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