Negotiating a House Using Seller's Agent (opinions wanted)

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athan
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Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Sun Jun 18, 2017 1:00 pm

We are looking to buy a house in a smaller town where the housing market is cold. The reason is new houses are being built in the town every day, which drives down the resale value of older houses. We found a house we like in a community with tons of young families like ourselves. The houses range in value from mid-200s through high 300s.

We are looking at the nicest, largest house in the community. It has a great layout and everything we want, including a 3 car garage, mudroom, finished basement, open layout, flat 1/2 acre backyard.

The house was built new in 2012 and sold for $355,000. Since then, the owners have finished the basement nicely, and also added a tiny back deck. I have researched market trends and comps sold in the last 3 years, and the value has not increased at all in this time.

However, the sellers listed the house on the market at a price of $409,900. We toured the house using their agent, and put an offer of $355,000 (same price they bought in 2012) A day later they countered us at $399,900. We think the house is way over valued for this community, so we did not counter with another offer right away.

Instead, we waited a month to see if their would be any other offers. Like we expected, no other offers were made.

Last week the sellers went around the agent's back to contact a mutual friend of ours, and said they were anxious for us to place another offer. The wife even said she was having trouble sleeping at night. A day after that, they dropped the sale price online to $394,900. We then waited a day and offered $362,000 including some furniture and exercise equipment they were most likely planning on leaving or selling.

The agent told us the seller seemed pissed at this offer, and did not counter us back. On top of this, our mutual friend let us know the sellers are not happy with the agent because he showed us 3 other properties at our suggestion. They even told our mutual friend they are thinking of taking their house of market to get rid of the agent. I think they are trying to sell directly to us not using the agent.

It is an interesting situation, but I feel the agent could do more to bridge the gap for everyone involved.

Any thoughts are appreciated.

rebellovw
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by rebellovw » Sun Jun 18, 2017 2:54 pm

Really no opinion necessary and who cares about what is going on behind the scenes. They are free to dump that realtor anytime. You can also go with a different realtor but so far seems like as a buyer you have the power.

All you can do is be patient and wait or up your offer. As sellers they are the one to accept the offer or pass - sounds like they are holding out for something better.

If I were in their shoes - which I was not too long ago (my selling agent brought be some buyers) - I'd pretty much know what the house is worth based on comps and offers I was receiving. In my case my realtor said - hey I have someone that is interested - can we show the house early (before all the upgrade work was done) - I said - hell no - they can wait - but if they want to pay my immediate asking price - that may be something different.

My point is - the seller should deal with their realtor and accept or pass on the offer.

MindBogler
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by MindBogler » Sun Jun 18, 2017 2:56 pm

Given you have now been rejected twice, I suspect you do not understand the market as well as you claim. You want the home and the seller has a price. That is the market price. I know housing markets vary widely, but I don't believe there is a single market in the USA where housing has not appreciated in the last 5 years. So unless the house was purchased at an upside down price in 2012, you're just griefing these sellers with lowball offers. A modest 2% YoY price appreciation for the last 5 years puts the house at around $392,000. That is about in line with the observed inflation rate. Without knowing more I can't say for certain but I think you are probably being unreasonable.

livesoft
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by livesoft » Sun Jun 18, 2017 3:03 pm

What thoughts do you want to entertain? We pissed off the owner of the house we bought. Five months later he sold to his corporate re-lo service and we bought the house from them for $400 over our first offer to the owner. We paid less than the original owner paid for the home the year before.

People don't like to lose money selling their homes. What else is new?

The seller's asking price is often ridiculously inflated. The buyer's offering price is often ridiculously deflated.
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athan
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Sun Jun 18, 2017 3:07 pm

"I know housing markets vary widely, but I don't believe there is a single market in the USA where housing has not appreciated in the last 5 years."

Really? No housing markets in the U.S. where housing has not appreciated? I own a townhouse in the same market and know for a fact that I cannot get out the full value I paid for the house.

Their house has stayed on the market for 5 weeks now with no other offers. I don't feel I am being unreasonable at all.

ACM4297
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by ACM4297 » Sun Jun 18, 2017 3:10 pm

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sevenseas
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by sevenseas » Sun Jun 18, 2017 3:17 pm

I too am unsure about exactly what part of the situation you are interested in opinions on. However, what stood out to me is that you are using the seller's agent to negotiate. It is never wise for the same realtor to represent buyer and seller, as that would obviously represent a conflict of interest. I'd recommend that you find your own buyer's agent to represent you. S/he will know the market (so will know if your offers are unreasonable or not), and perhaps give you some guidance in further negotiations. As for the sellers, they sound as if they are anchored to a particular price range but also are getting a bit desperate. Their agent should be giving them guidance as to whether their expectations are too high, but sounds as if that relationship is strained. Also, maybe they are trying to work around the realtor to save themselves the broker fee.

athan
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Sun Jun 18, 2017 3:23 pm

sevenseas wrote:I too am unsure about exactly what part of the situation you are interested in opinions on. However, what stood out to me is that you are using the seller's agent to negotiate. It is never wise for the same realtor to represent buyer and seller, as that would obviously represent a conflict of interest. I'd recommend that you find your own buyer's agent to represent you. S/he will know the market (so will know if your offers are unreasonable or not), and perhaps give you some guidance in further negotiations. As for the sellers, they sound as if they are anchored to a particular price range but also are getting a bit desperate. Their agent should be giving them guidance as to whether their expectations are too high, but sounds as if that relationship is strained. Also, maybe they are trying to work around the realtor to save themselves the broker fee.


We are not in a hurry to move as we can live in the townhouse for a few more years if needed. Also, we plan to pay all closing costs. In our area this is becoming a rarity. Often the seller either splits closing costs, or pays 3-4% the sale price towards closing costs.

I didn't think it was possible to work around the real estate agent, but I have no idea what kind of contract they have with him.

avalpert
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by avalpert » Sun Jun 18, 2017 3:24 pm

MindBogler wrote:Given you have now been rejected twice, I suspect you do not understand the market as well as you claim. You want the home and the seller has a price. That is the market price.

No it isn't. The market price is the price that a seller and a buyer agree to a transaction - that they have no other buyers appearing for that price tells you it is not the market price (not any more than the buyers offer is anyway).

OP - This seems to be less about the price and more about the emotions of the negotiations process. You know they are willing, in theory, to take a price somewhere between 394,900 and 362,000 but your approach has angered them enough that they might have trouble taking it even if offered. You should decide what is the most you would be willing to pay for this house, approach them graciously hoping to clear up any misunderstandings and offer them that price - that is if you really want the house.

livesoft
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by livesoft » Sun Jun 18, 2017 3:26 pm

With a buyer's agent, you can ask your agent questions and have a better chance of getting legitimate answers. For example;

Have the owner's already put an offer on another property? What contingencies did they ask for? Do they have a deadline to sell or to move?

How much are the owner's paying monthly for the current home? This is useful because the house could be costing them $4000 a month, so every month they delay selling is $4000 out of their pocket. They can be reminded of this in your offer.

When does the contract run out for the seller and the seller agent? What happens then?

And so on ....

Even with a buyer's agent, I would not reveal any of my cards. I might even have them show me houses even cheaper than $355K, so they can tell the sellers you are looking at less expensive homes.
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by Mudpuppy » Sun Jun 18, 2017 3:26 pm

Not even the best agents in the world can help if the sellers or buyers cannot agree on the market value for the home. All the agent can do is provide information on reasonable comps. But there's not much the agent can do if both parties are sticking to their impressions of the "correct" price.

If you feel they have overpriced it and they feel you are underbidding, then walk away and find another property. You haven't provided us enough information to see if your impression of the market price or their impression of the market price is the one that is flawed, but it's a pretty fundamental disagreement during the whole process.

MindBogler wrote:You want the home and the seller has a price. That is the market price.

Not really. Some sellers can have a very over-inflated perception of the value of their home. I track comps and listings for my neighborhood pretty closely, so I feel I have a reasonable grasp of the market value in the neighborhood. And yet I regularly see listings that are way over the market price for the neighborhood. Not surprisingly, they rarely sell at all, or if they do, it's for a much lower price. And some sellers don't seem to understand they're listing the property too high and that's why it's not selling. One "builder's standard" house on the next block over was listed for about 130% of the market price back in November and didn't sell. They just relisted it for 125% of the market price, so they're still over-pricing their home for the current market.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by TheJoker » Sun Jun 18, 2017 3:45 pm

Write a letter to the owner (now) with your offer and NO commission effective subsequent to the expiration of the listing. Request them to notify you when the listing expires. Subsequent to the listing expiration, both of you go directly to a different escrow (if they have suggested one) and have them write escrow instructions based on your agreement.

Be proactive. This is not intended to be legal advise, just an opinion from a unhappy buyer/seller.

athan
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Sun Jun 18, 2017 3:53 pm

TheJoker wrote:Write a letter to the owner (now) with your offer and NO commission effective subsequent to the expiration of the listing. Request them to notify you when the listing expires. Subsequent to the listing expiration, both of you go directly to a different escrow (if they have suggested one) and have them write escrow instructions based on your agreement.

Be proactive. This is not intended to be legal advise, just an opinion from a unhappy buyer/seller.



Aren't the contracts written to avoid this from happening, thus cutting out the realtor? Since the realtor showed us the property during the contract, isn't it most likely written into the contract that he will still get a commission if the seller sells to us after the lisitng expiration?

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by bsteiner » Sun Jun 18, 2017 3:56 pm

athan wrote:... I feel the agent could do more to bridge the gap for everyone involved.


The broker's job is to try to sell the house for at least the listing price.

avalpert
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by avalpert » Sun Jun 18, 2017 3:59 pm

athan wrote:
TheJoker wrote:Write a letter to the owner (now) with your offer and NO commission effective subsequent to the expiration of the listing. Request them to notify you when the listing expires. Subsequent to the listing expiration, both of you go directly to a different escrow (if they have suggested one) and have them write escrow instructions based on your agreement.

Be proactive. This is not intended to be legal advise, just an opinion from a unhappy buyer/seller.



Aren't the contracts written to avoid this from happening, thus cutting out the realtor? Since the realtor showed us the property during the contract, isn't it most likely written into the contract that he will still get a commission if the seller sells to us after the lisitng expiration?

Yes, it is called the safety or protection clause.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by Carefreeap » Sun Jun 18, 2017 4:01 pm

So the sellers tried screw their agent out of a commission by going around him/her and trying to contact you through a mutual friend.

And they are upset because you wrote another offer using the proper procedure and going through the agent.

Be very, very careful dealing with these people. Had the original outreach worked and you wrote an offer directly to them, I think there's a very good chance that both of your real estate agents would have sued you (both). Buried in that listing agreement the sellers signed is a clause that states that the agent is entitled to a commission if the property is sold to someone who was shown the house while it was listed. The term that's used is "procuring cause", meaning you bought the house because of the efforts of the real estate agents involved.

The sellers might just be ignorant and not deceitful but when it comes to money, that kind of stunt never looks good. And the sellers are either naïve or stupid if they think others haven't tried it before.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by Carefreeap » Sun Jun 18, 2017 4:03 pm

athan wrote:
TheJoker wrote:Write a letter to the owner (now) with your offer and NO commission effective subsequent to the expiration of the listing. Request them to notify you when the listing expires. Subsequent to the listing expiration, both of you go directly to a different escrow (if they have suggested one) and have them write escrow instructions based on your agreement.

Be proactive. This is not intended to be legal advise, just an opinion from a unhappy buyer/seller.



Aren't the contracts written to avoid this from happening, thus cutting out the realtor? Since the realtor showed us the property during the contract, isn't it most likely written into the contract that he will still get a commission if the seller sells to us after the lisitng expiration?


Yes. As I wrote in my post above, the sellers are either naïve or stupid thinking they could get away with it. Don't let them suck you into a lawsuit.

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hand
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by hand » Sun Jun 18, 2017 4:09 pm

Use the seller's agent against them...

Speak with the seller's agent and offer to list your current property with them if you close the deal for the new house.
Up your offer by $5k so the seller's agent has something positive to talk about.

Watch and enjoy as the "seller's" agent convince the sellers that your offer is a great deal because it is now significantly in the seller's agent's best interest that you buy the house at any price.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by Smorgasbord » Sun Jun 18, 2017 4:10 pm

Factoring in the agent's commission, the seller is probably just about getting what they paid for the house back in 2012 with a $393 sale price...not that that has anything to do with the current value of the house. Sometimes, it just takes time for sellers to accept that they are going to lose money on a real estate transaction. If you like the house, but are in no hurry, wait until September to put in another offer.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by Sandtrap » Sun Jun 18, 2017 4:11 pm

Never.

athan
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Sun Jun 18, 2017 4:16 pm

Smorgasbord wrote:Factoring in the agent's commission, the seller is probably just about getting what they paid for the house back in 2012 with a $393 sale price...not that that has anything to do with the current value of the house. Sometimes, it just takes time for sellers to accept that they are going to lose money on a real estate transaction. If you like the house, but are in no hurry, wait until September to put in another offer.



I think this is what we are planning to do as of now. They have kids and are moving out of state, so you would think they would like to be settled in new house by August before school starts.

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hand
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by hand » Sun Jun 18, 2017 4:21 pm

livesoft wrote:
Even with a buyer's agent, I would not reveal any of my cards. I might even have them show me houses even cheaper than $355K, so they can tell the sellers you are looking at less expensive homes.


This is a nice strategy to use with the seller's agent - have them show you the nicest houses at $355k and below to make the point that the desired house is overpriced and that you have credible alternatives. Alternately, have lots of "private" conversation in front of the seller's realtor about how much one of you wants to stay in your current home.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by S&L1940 » Sun Jun 18, 2017 4:23 pm

from my past experience, a seller usually has a contract with the realtor; unless they want to get involved with legal accusations on lack of performance, the seller may not be able to simply fire the realtor. once, guided by a realtor friend, we negotiated directly with a buyer and both parties brought real estate lawyers to the sale to our mutual satisfaction.
if the realtor is working both ends then I believe they may be looking at a 6% commission. if the house does not sell the broker is missing out on about some $20+ K commission. if both parties agree to a lower price the broker loses some $1800 as opposed to no sale and zero commission.
we had a home in a mixed community - larger homes on multiple acres and smaller (like ours) on as little as 1/2 acre. when we decided to sell, we were empty nesters not in a rush to move out. we gave the broker a firm yet we felt fair sale number and sat for 18 months until we did the the sale. It all depends on the details and how hungry each player is to do the deal.
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rebellovw
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by rebellovw » Sun Jun 18, 2017 4:26 pm

Out of curiosity - what is the zestimate for the house?

Also -what was the avg house price for that area when they bought the house - and what is that average now?

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by MindBogler » Sun Jun 18, 2017 4:31 pm

avalpert wrote:No it isn't. The market price is the price that a seller and a buyer agree to a transaction - that they have no other buyers appearing for that price tells you it is not the market price (not any more than the buyers offer is anyway).

I think you're searching too hard for semantics while missing the point of the statement. There was a time when a house sitting for 4-6 months was not abnormal. If your house doesn't move in 3 days it doesn't automatically indicate that it is overpriced. You know that supply / demand equation has two sides, right? Given the facts and clues offered by the OP we know these things: the OP has offered twice on the property. I think it is likely that the OP dearly wants the property so the seller holds all the cards here. The seller will set the market price. My statement stands as originally intended. Further, the OP now agrees with another poster that the asking price is fair based realtor transaction costs. So, it sounds like it is the market price after all.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by avalpert » Sun Jun 18, 2017 4:38 pm

MindBogler wrote:
avalpert wrote:No it isn't. The market price is the price that a seller and a buyer agree to a transaction - that they have no other buyers appearing for that price tells you it is not the market price (not any more than the buyers offer is anyway).

I think you're searching too hard for semantics while missing the point of the statement. There was a time when a house sitting for 4-6 months was not abnormal. If your house doesn't move in 3 days it doesn't automatically indicate that it is overpriced. You know that supply / demand equation has two sides, right? Given the facts and clues offered by the OP we know these things: the OP has offered twice on the property. I think it is likely that the OP dearly wants the property so the seller holds all the cards here. The seller will set the market price. My statement stands as originally intended. Further, the OP now agrees with another poster that the asking price is fair based realtor transaction costs. So, it sounds like it is the market price after all.

Well, given that the seller has also already dropped the price (making them providing the same number of asks as the OP has bids), is moving this summer, didn't wait only 3 days for it to move (it was a month between offers), tried to reach out to the OP inviting a new bid, and hasn't had any additional offers I don't think it is at all clear the seller will set the market price - in fact we know that the seller didn't set the market price with their initial asking pricing.

I wasn't searching for semantics at all - I was correcting a wrong assertion. You now seem to be searching too hard for ways to rescue your initial comment.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by rebellovw » Sun Jun 18, 2017 4:39 pm

MindBogler wrote:
avalpert wrote:No it isn't. The market price is the price that a seller and a buyer agree to a transaction - that they have no other buyers appearing for that price tells you it is not the market price (not any more than the buyers offer is anyway).

I think you're searching too hard for semantics while missing the point of the statement. There was a time when a house sitting for 4-6 months was not abnormal. If your house doesn't move in 3 days it doesn't automatically indicate that it is overpriced. You know that supply / demand equation has two sides, right? Given the facts and clues offered by the OP we know these things: the OP has offered twice on the property. I think it is likely that the OP dearly wants the property so the seller holds all the cards here. The seller will set the market price. My statement stands as originally intended. Further, the OP now agrees with another poster that the asking price is fair based realtor transaction costs. So, it sounds like it is the market price after all.


Agreed - the Realtor - if he/she is good - knows the house will sell - just a matter of time. If you want the house - make a better offer. Since it is the best house in the neighborhood - it should eventually sell.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by BW1985 » Sun Jun 18, 2017 4:39 pm

hand wrote:Use the seller's agent against them...

Speak with the seller's agent and offer to list your current property with them if you close the deal for the new house.
Up your offer by $5k so the seller's agent has something positive to talk about.

Watch and enjoy as the "seller's" agent convince the sellers that your offer is a great deal because it is now significantly in the seller's agent's best interest that you buy the house at any price.


This is good. May not work though because the sellers just might not accept their house is with less than they thought/hoped it was.
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rebellovw
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by rebellovw » Sun Jun 18, 2017 4:43 pm

Also the seller lowered the price - and can continue to lower the price to attract a second buyer - they have time since they know you are interested - once they get another offer - they will be in a better position.

avalpert
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by avalpert » Sun Jun 18, 2017 4:50 pm

rebellovw wrote:Agreed - the Realtor - if he/she is good - knows the house will sell - just a matter of time.

rebellovw wrote:Also the seller lowered the price - and can continue to lower the price to attract a second buyer


Do you not see how these two statements seem to contradict one another? If the good Realtor knew the house will sell, it's just a matter of time, they wouldn't need to lower the price to attract other buyers...

Not to mention, it runs contrary to the behavior of realtors generally who are more prone to price to sell quickly rather than wait out for a better price (at least for other people's homes).

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Sun Jun 18, 2017 4:50 pm

rebellovw wrote:Out of curiosity - what is the zestimate for the house?

$388,000

Also -what was the avg house price for that area when they bought the house - and what is that average now?

$187,000 when bought
$196,000 now

MindBogler
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by MindBogler » Sun Jun 18, 2017 4:52 pm

avalpert wrote:Well, given that the seller has also already dropped the price (making them providing the same number of asks as the OP has bids), is moving this summer, didn't wait only 3 days for it to move (it was a month between offers), tried to reach out to the OP inviting a new bid, and hasn't had any additional offers I don't think it is at all clear the seller will set the market price - in fact we know that the seller didn't set the market price with their initial asking pricing.

I wasn't searching for semantics at all - I was correcting a wrong assertion. You now seem to be searching too hard for ways to rescue your initial comment.

I said the seller will set the market price and nothing you wrote here disputes that. You should parse sentences more carefully before throwing a dictionary at people. I understand that the final sales price is the market price. You seem to assume that the buyer and seller are on equal footing. I think that is hardly the case.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Sun Jun 18, 2017 4:56 pm

MindBogler wrote:
avalpert wrote:No it isn't. The market price is the price that a seller and a buyer agree to a transaction - that they have no other buyers appearing for that price tells you it is not the market price (not any more than the buyers offer is anyway).

I think you're searching too hard for semantics while missing the point of the statement. There was a time when a house sitting for 4-6 months was not abnormal. If your house doesn't move in 3 days it doesn't automatically indicate that it is overpriced. You know that supply / demand equation has two sides, right? Given the facts and clues offered by the OP we know these things: the OP has offered twice on the property. I think it is likely that the OP dearly wants the property so the seller holds all the cards here. The seller will set the market price. My statement stands as originally intended. Further, the OP now agrees with another poster that the asking price is fair based realtor transaction costs. So, it sounds like it is the market price after all.


OP Here...not sure how you are putting words in my mouth that I agree the asking price is fair. This is a false statement on your behalf.

Also, we do not "dearly" want the house, and I am fine if another offer comes along and we miss out on this one. We could easily overpay for this house tomorrow if we were 100% dead set on it.

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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by MindBogler » Sun Jun 18, 2017 4:56 pm

athan wrote:
rebellovw wrote:Out of curiosity - what is the zestimate for the house?

$388,000

Also -what was the avg house price for that area when they bought the house - and what is that average now?

$187,000 when bought
$196,000 now

What is the $/sqft of this property? What are the $/sqft of comparable properties and recent sales in the area? Do these values account for the acreage of the property? The average price of homes in the area is irrelevant unless you are buying an average home.

MindBogler
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by MindBogler » Sun Jun 18, 2017 4:58 pm

athan wrote:
Smorgasbord wrote:Factoring in the agent's commission, the seller is probably just about getting what they paid for the house back in 2012 with a $393 sale price...not that that has anything to do with the current value of the house. Sometimes, it just takes time for sellers to accept that they are going to lose money on a real estate transaction. If you like the house, but are in no hurry, wait until September to put in another offer.



I think this is what we are planning to do as of now. They have kids and are moving out of state, so you would think they would like to be settled in new house by August before school starts.

Did you mean something else by this statement? You seem to be agreeing that a $393k sales price is not unreasonable or were you agreeing that the seller needs to accept that they are going to lose money?

avalpert
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by avalpert » Sun Jun 18, 2017 5:01 pm

MindBogler wrote:
avalpert wrote:Well, given that the seller has also already dropped the price (making them providing the same number of asks as the OP has bids), is moving this summer, didn't wait only 3 days for it to move (it was a month between offers), tried to reach out to the OP inviting a new bid, and hasn't had any additional offers I don't think it is at all clear the seller will set the market price - in fact we know that the seller didn't set the market price with their initial asking pricing.

I wasn't searching for semantics at all - I was correcting a wrong assertion. You now seem to be searching too hard for ways to rescue your initial comment.

I said the seller will set the market price and nothing you wrote here disputes that.

Not in your original response, you said that the 'sellar has a price' and that 'is the market price'.

You should parse sentences more carefully before throwing a dictionary at people.

And you shouldn't try to rewrite what you wrote or get so defensive. This isn't about throwing a dictionary - this is about approaching the situation incorrectly leading to wrong conclusions. The seller no more sets the price here than the buyer - they both have to agree for their to be a market price.

You seem to assume that the buyer and seller are on equal footing. I think that is hardly the case.

You are right, it is hardly the case - but I think you have it backwards who has the advantage. The buyer has another place to live and doesn't have to move, the seller is moving his family out of state. If the seller were in a position to get any price they wanted, let alone the one they initially asked for, they wouldn't have had to drop the listing price at all - and they would have other offers coming in.

athan
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Sun Jun 18, 2017 5:08 pm

MindBogler wrote:
athan wrote:
rebellovw wrote:Out of curiosity - what is the zestimate for the house?

$388,000

Also -what was the avg house price for that area when they bought the house - and what is that average now?

$187,000 when bought
$196,000 now

What is the $/sqft of this property? What are the $/sqft of comparable properties and recent sales in the area? Do these values account for the acreage of the property? The average price of homes in the area is irrelevant unless you are buying an average home.


Most of the comps in the area with similar sq ft have sold lower by than $350,000 in last 12 months. With that being said, this house has some nice finishes and a flat back yard.

There are 5 other houses in the same development that have been on the market for over 6 months without selling. Also, a house of similar size on the same street just sold for $330,000. The lot is not flat and there is only a 2 car garage, but it would be considered a comp.

athan
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Sun Jun 18, 2017 5:09 pm

MindBogler wrote:
athan wrote:
Smorgasbord wrote:Factoring in the agent's commission, the seller is probably just about getting what they paid for the house back in 2012 with a $393 sale price...not that that has anything to do with the current value of the house. Sometimes, it just takes time for sellers to accept that they are going to lose money on a real estate transaction. If you like the house, but are in no hurry, wait until September to put in another offer.



I think this is what we are planning to do as of now. They have kids and are moving out of state, so you would think they would like to be settled in new house by August before school starts.

Did you mean something else by this statement? You seem to be agreeing that a $393k sales price is not unreasonable or were you agreeing that the seller needs to accept that they are going to lose money?


Agreeing that they need to accept a loss and move on.

livesoft
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by livesoft » Sun Jun 18, 2017 5:15 pm

athan wrote:Also, a house of similar size on the same street just sold for $330,000. The lot is not flat and there is only a 2 car garage, but it would be considered a comp.

This would suggest that the home for sale would not appraise high enough for a loan in the range the sellers are asking for.

A buyer's agent would gladly do the legwork to find out more information about that $330K-sold home.
Last edited by livesoft on Sun Jun 18, 2017 5:16 pm, edited 1 time in total.
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hightower
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by hightower » Sun Jun 18, 2017 5:16 pm

athan wrote:We are looking to buy a house in a smaller town where the housing market is cold. The reason is new houses are being built in the town every day, which drives down the resale value of older houses. We found a house we like in a community with tons of young families like ourselves. The houses range in value from mid-200s through high 300s.

We are looking at the nicest, largest house in the community. It has a great layout and everything we want, including a 3 car garage, mudroom, finished basement, open layout, flat 1/2 acre backyard.

The house was built new in 2012 and sold for $355,000. Since then, the owners have finished the basement nicely, and also added a tiny back deck. I have researched market trends and comps sold in the last 3 years, and the value has not increased at all in this time.

However, the sellers listed the house on the market at a price of $409,900. We toured the house using their agent, and put an offer of $355,000 (same price they bought in 2012) A day later they countered us at $399,900. We think the house is way over valued for this community, so we did not counter with another offer right away.

Instead, we waited a month to see if their would be any other offers. Like we expected, no other offers were made.

Last week the sellers went around the agent's back to contact a mutual friend of ours, and said they were anxious for us to place another offer. The wife even said she was having trouble sleeping at night. A day after that, they dropped the sale price online to $394,900. We then waited a day and offered $362,000 including some furniture and exercise equipment they were most likely planning on leaving or selling.

The agent told us the seller seemed pissed at this offer, and did not counter us back. On top of this, our mutual friend let us know the sellers are not happy with the agent because he showed us 3 other properties at our suggestion. They even told our mutual friend they are thinking of taking their house of market to get rid of the agent. I think they are trying to sell directly to us not using the agent.

It is an interesting situation, but I feel the agent could do more to bridge the gap for everyone involved.

Any thoughts are appreciated.


Unrealistic sellers. Simple as that. Kudos to you for sticking to your guns and not countering back. You have avoided overpaying for the house. Be willing to keep walking away like that and you're certain to land a good deal eventually.

hightower
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by hightower » Sun Jun 18, 2017 5:18 pm

MindBogler wrote:Given you have now been rejected twice, I suspect you do not understand the market as well as you claim. You want the home and the seller has a price. That is the market price. I know housing markets vary widely, but I don't believe there is a single market in the USA where housing has not appreciated in the last 5 years. So unless the house was purchased at an upside down price in 2012, you're just griefing these sellers with lowball offers. A modest 2% YoY price appreciation for the last 5 years puts the house at around $392,000. That is about in line with the observed inflation rate. Without knowing more I can't say for certain but I think you are probably being unreasonable.


No, this is incorrect. The sellers are the ones who don't know the market. They haven't gotten any other offers which says that their price is too high. If the house was priced appropriately, it would have sold by now. The market is price is NOT the price the sellers want. The market price is the price that buyers are willing to pay. So far, no one has been willing to pay what the sellers want, which means the sellers have it priced too high.

MindBogler
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by MindBogler » Sun Jun 18, 2017 5:19 pm

avalpert wrote:Not in your original response, you said that the 'sellar has a price' and that 'is the market price'.

Indeed I did and I stand corrected.

I stand by my original reasoning, though, even if I failed to properly convey it. Without additional knowledge of the property or area, the seller's "ballpark" asking price does seem reasonable. If the house was overpriced in 2012 that changes things but I've already said that. The OP needs to explain why he/she feels the seller should accept a loss.

hightower
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by hightower » Sun Jun 18, 2017 5:23 pm

ACM4297 wrote:
MindBogler wrote:Given you have now been rejected twice, I suspect you do not understand the market as well as you claim. You want the home and the seller has a price. That is the market price. I know housing markets vary widely, but I don't believe there is a single market in the USA where housing has not appreciated in the last 5 years. So unless the house was purchased at an upside down price in 2012, you're just griefing these sellers with lowball offers. A modest 2% YoY price appreciation for the last 5 years puts the house at around $392,000. That is about in line with the observed inflation rate. Without knowing more I can't say for certain but I think you are probably being unreasonable.


Not to mention they finished the basement and put on a back deck. Their stated price seems fair, and it seems they aren't willing to come down anymore so you should buy at their price or move on.


This is incorrect as well. If no one is willing to pay the price they are asking, then it is priced too high. Let it sit on the market for a year at that price if you don't believe me. Sucks for the sellers that they can't sell the house for what they think its worth, but if it were priced appropriately, someone would have bought it by now. That's how real estate works.
Too often people put emotional value in their home. They think they "deserve" a certain price and if they can't get it they think that everyone else is wrong. If there's no one willing to buy it, there's no one willing to buy it. The sellers have a choice. They can keep it and hope that some day the price will match what they think it's worth or they sell it for less. The buyers are the ones who have the power here. It's obviously not a hot market or it wouldn't have sat there with no offers for over a month.

MindBogler
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by MindBogler » Sun Jun 18, 2017 5:31 pm

hightower wrote:
MindBogler wrote:Given you have now been rejected twice, I suspect you do not understand the market as well as you claim. You want the home and the seller has a price. That is the market price. I know housing markets vary widely, but I don't believe there is a single market in the USA where housing has not appreciated in the last 5 years. So unless the house was purchased at an upside down price in 2012, you're just griefing these sellers with lowball offers. A modest 2% YoY price appreciation for the last 5 years puts the house at around $392,000. That is about in line with the observed inflation rate. Without knowing more I can't say for certain but I think you are probably being unreasonable.


No, this is incorrect. The sellers are the ones who don't know the market. They haven't gotten any other offers which says that their price is too high. If the house was priced appropriately, it would have sold by now. The market is price is NOT the price the sellers want. The market price is the price that buyers are willing to pay. So far, no one has been willing to pay what the sellers want, which means the sellers have it priced too high.

There is no rule that a house must have X offers in Y period to be reasonably priced. If you put your house on the market for $1 and there are no interested buyers in 3 months did you over price the house? I use an extreme example but it is to make a point. You've made the assumption that there is always a buyer ready and available if the price is "correct." Real estate isn't liquid like the stock market. A lack of interest in the short term doesn't automatically mean the price is wrong or too high. We live in abnormal times where property in certain areas has dozens of cash offers over asking price within days of being listed. That is a recent phenomenon and it isn't normal. It wasn't uncommon just 25 years past for houses to go months without a single offer.

MindBogler
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by MindBogler » Sun Jun 18, 2017 5:37 pm

livesoft wrote:
athan wrote:Also, a house of similar size on the same street just sold for $330,000. The lot is not flat and there is only a 2 car garage, but it would be considered a comp.

This would suggest that the home for sale would not appraise high enough for a loan in the range the sellers are asking for.

A buyer's agent would gladly do the legwork to find out more information about that $330K-sold home.

OP: I think Livesoft's answer is probably the best one. I'm not a fan of realtors but the seller already has one. It behooves you to get your own agent. They should be able to pull comps and guide you on whether your offer was reasonable or not. If the seller is truly unreasonable there may be nothing you can do. If you are being unreasonable the realtor will be able to show you why. None of us will have the background specific to your situation to say for certain. Best of luck.

avalpert
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by avalpert » Sun Jun 18, 2017 5:49 pm

MindBogler wrote:
avalpert wrote:Not in your original response, you said that the 'sellar has a price' and that 'is the market price'.

Indeed I did and I stand corrected.

I stand by my original reasoning, though, even if I failed to properly convey it. Without additional knowledge of the property or area, the seller's "ballpark" asking price does seem reasonable. If the house was overpriced in 2012 that changes things but I've already said that. The OP needs to explain why he/she feels the seller should accept a loss.


The OP doesn't need to explain anything in relation to the owner prior purchase price - that anchor is wholly irrelevant to the price today.

The real estate market is less liquid than the stock market and it can take time (sometime a lot of time) to get a market clearing price. Patience is a virtue, if your situation allows for it. That said, that there are other houses in the neighborhood on the market for long periods of time at lower prices doesn't bode well for the seller getting his asking price - it is by definition the wrong price until he finds someone willing to pay it.

MindBogler
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by MindBogler » Sun Jun 18, 2017 5:54 pm

avalpert wrote:The OP doesn't need to explain anything in relation to the owner prior purchase price - that anchor is wholly irrelevant to the price today.

It is absolutely relevant. If the seller overpaid in 2012 they may be asking too much today to try and "make up for their loss." If that is the case, that changes everything! The OP likely can never reach a fair price because the seller is trying to recoup what they've already lost.

athan
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by athan » Sun Jun 18, 2017 6:05 pm

MindBogler wrote:
livesoft wrote:
athan wrote:Also, a house of similar size on the same street just sold for $330,000. The lot is not flat and there is only a 2 car garage, but it would be considered a comp.

This would suggest that the home for sale would not appraise high enough for a loan in the range the sellers are asking for.

A buyer's agent would gladly do the legwork to find out more information about that $330K-sold home.

OP: I think Livesoft's answer is probably the best one. I'm not a fan of realtors but the seller already has one. It behooves you to get your own agent. They should be able to pull comps and guide you on whether your offer was reasonable or not. If the seller is truly unreasonable there may be nothing you can do. If you are being unreasonable the realtor will be able to show you why. None of us will have the background specific to your situation to say for certain. Best of luck.


Should I give the seller's agent a heads up we are thinking of getting our own agent, since he has already shown us the house twice and spent time with us looking at a few other houses? Of course we have not signed anything with him, but I feel like he deserves a call first.

avalpert
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by avalpert » Sun Jun 18, 2017 6:07 pm

MindBogler wrote:
avalpert wrote:The OP doesn't need to explain anything in relation to the owner prior purchase price - that anchor is wholly irrelevant to the price today.

It is absolutely relevant. If the seller overpaid in 2012 they may be asking too much today to try and "make up for their loss." If that is the case, that changes everything! The OP likely can never reach a fair price because the seller is trying to recoup what they've already lost.


Well sure, if the seller is trying to set today's price based on anchoring bias rooted in what he paid in the past, regardless of what the market is willing to pay today, then he may never find a buyer. That doesn't mean the OP needs to play to the same anchoring bias.

BW1985
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Re: Negotiating a House Using Seller's Agent (opinions wanted)

Post by BW1985 » Sun Jun 18, 2017 6:19 pm

athan wrote:
MindBogler wrote:
livesoft wrote:
athan wrote:Also, a house of similar size on the same street just sold for $330,000. The lot is not flat and there is only a 2 car garage, but it would be considered a comp.

This would suggest that the home for sale would not appraise high enough for a loan in the range the sellers are asking for.

A buyer's agent would gladly do the legwork to find out more information about that $330K-sold home.

OP: I think Livesoft's answer is probably the best one. I'm not a fan of realtors but the seller already has one. It behooves you to get your own agent. They should be able to pull comps and guide you on whether your offer was reasonable or not. If the seller is truly unreasonable there may be nothing you can do. If you are being unreasonable the realtor will be able to show you why. None of us will have the background specific to your situation to say for certain. Best of luck.


Should I give the seller's agent a heads up we are thinking of getting our own agent, since he has already shown us the house twice and spent time with us looking at a few other houses? Of course we have not signed anything with him, but I feel like he deserves a call first.


I don't know the laws in your state but the seller's agent may have claim to the commission on your side of the transaction if you buy the house in question because they showed it to you, twice. I'm not an agent but this has been explained to me here before by an agent.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

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