Real Estate Negotiation Came to a Halt

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Topic Author
jfmiii
Posts: 58
Joined: Fri Apr 25, 2014 1:36 pm

Real Estate Negotiation Came to a Halt

Post by jfmiii » Thu Aug 08, 2019 2:49 pm

I'm interested in a home that is listed for $999,000. It has been listed since early April. The sellers have decreased the list price from $1.15mm to $1.075mm to $999k. They had a deal in place that fell through when the listing was at $1.075m. The opposing realtor told my realtor it was under $950k but close to $950k. The home has now been on the market for 2 weeks at $999k and has had one open house. They have received no offers. Before submitting an offer my realtor indicated I was very interested in the home but didnt feel it was worth what they were asking based on recent sales $/sq ft data (this home is at $380/sq ft vs recent sales in the area closer to $300). It has a larger lot. My realtor indicated I would care "in the $800s" and asked if we were wasting our time. Realtor asked if I could pay cash, if I could close within 21 days, etc. My realtor indicated yes, I could close within 21 days, she didnt know if I could pay cash but that I was well qualified to purchase the home. So, I submitted an offer for $815,000 ($310 per sq ft) along with a copy of a pre-approval from Chase. After the offer was submitted, she wanted to speak to my lender. Ok, fine; I have known my broker at Chase for years and we spoke and agreed he wouldnt divulge any financial information or my buying power. Before she was able to get a hold of him, they countered at $989k. A bit miffed, I didnt want to counter but my realtor convinced me to come up $10k, just to keep the dialogue open. So I did. The opposing realtor called my broker and said she wouldnt counter again until speaking with my lender. My lender called her back, told her I was well qualified and would be wise to accept a deal with me. My lender told me that she was fishing to see how much more I could pay and that she said there wouldnt be a deal unless the price was well into the 900s. She subsequently called back 20 minutes later and asked the lender if I could close in 21 days and he told her no problem. My counter expired at 6pm that day at which point the seller said they werent going to counter. This was on Tuesday. Seeing no need to negotiate against myself, I have left it. I am in a very slow market, in a very high tax area. The seller is moving out of state to retire but I dont believe they are in financial need to sell; their mortgage is small according to County office. Is this deal dead in the water? Do I go back with a best and final (~$330/sq ft)? Do I go back with $850,000 to put pressure on them that they may be dismissing a very good chance at selling? Or do I just sit and wait and see if they come back? I want the house but I'm not going to pay much more than what the numbers tell me it is worth. I'm having a hard time stomaching going back and giving them the upper hand in the negotiation. Thanks BHs!

DoctorPhysics
Posts: 126
Joined: Sun Jun 07, 2015 12:50 pm

Re: Real Estate Negotiation Came to a Halt

Post by DoctorPhysics » Thu Aug 08, 2019 2:56 pm

I would walk away. Difficult sellers will just have more difficulty ahead.

I had same situation years ago.

Seller wanted 500k, I offered 480k with 10k credit to fix various items, very fair based on comps. They insisted 500k. I went up 5k. Then they insisted 510k because of the credit. I walked.

Three months later, I was already moved into the area. Their house was still on the market and reduced from 500k to 470k. It eventually went for under that about 6 months later.

Time is money too!

alfaspider
Posts: 2166
Joined: Wed Sep 09, 2015 4:44 pm

Re: Real Estate Negotiation Came to a Halt

Post by alfaspider » Thu Aug 08, 2019 2:57 pm

It sounds like you are still far away from a meeting of the minds on price. You can come back with a higher offer if you think it's worthwhile- whether they go for it will depend on how desperate they are to sell. Most likely, they are still anchored at the price from the original contract.

bloom2708
Posts: 6953
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: Real Estate Negotiation Came to a Halt

Post by bloom2708 » Thu Aug 08, 2019 2:59 pm

Nearly $200k from lowered asking? :(

If I was the seller I wouldn't even reply.

I would look at houses in the $850k range if that is what you want to spend.
"People want confirmation, not advice" Unknown | "We are here to provoke thoughtfulness, not agree with you" Unknown | Four words. Whole food, plant based. Bing it.

Topic Author
jfmiii
Posts: 58
Joined: Fri Apr 25, 2014 1:36 pm

Re: Real Estate Negotiation Came to a Halt

Post by jfmiii » Thu Aug 08, 2019 3:04 pm

bloom2708 wrote:
Thu Aug 08, 2019 2:59 pm
Nearly $200k from lowered asking? :(

If I was the seller I wouldn't even reply.

I would look at houses in the $850k range if that is what you want to spend.
That is one way to look at it. Another is that my offer was above the average selling price on a square footage basis. I also know they accepted an offer at least $125k off ask (~13% off list....at least) when it was listed at $1.075mm. Theyve had one offer besides mine. If it was worth within 10% of what it was listed for, they wouldve gotten at least an offer in the last 2 weeks, imo. Average sale to list percentage in this are is ~90%. My opening bid was ~18% off list.

User avatar
onthecusp
Posts: 728
Joined: Mon Aug 29, 2016 3:25 pm

Re: Real Estate Negotiation Came to a Halt

Post by onthecusp » Thu Aug 08, 2019 3:13 pm

The buyer is negotiating off of their own anchor point but it is just not worth that with the complete lack of other interest.
You do not need to keep going up, the other way is ok too. Give them a reason for the reduced offer that they can respond to, like uncertainty over them being able to close the deal, lot line issue, whatever to allow them to keep talking even if they don't like the course of negotiations.

Or just withdraw the offer, walk away, come back in a month if you are still interested.

T4REngineer
Posts: 69
Joined: Thu May 31, 2018 9:50 am

Re: Real Estate Negotiation Came to a Halt

Post by T4REngineer » Thu Aug 08, 2019 3:15 pm

There is to great a difference between what the sellers think the home is worth and what you are willing to pay. I expect they feel its worth more in large part due to previously having a larger offer. It never hurts (maybe your pride?) to give a final offer and maybe let your realtor know that you would potentially be interested down the road if it still has not sold in a couple months and they are willing to reconsider.

We walked away from a similar situation, although 1/4 the dollars. We offered 10% off and expected to meet in the middle, seller would not budge, they countered every time at asking. We made a 3rd and final offer above the midway point and they didn't move so we walked away - Due to the much lower dollar figures it was tough to do over what is a relatively trivial amount of money in the grand scheme of our lives but you have to draw a line somewhere. Home had been on the market 6 months with no price decrease, 2 weeks later we bought a home that was 90% identical but newer, with a better layout in the master bath and mud room and on a lot 3x the size for less than our final counter on that home - Thrilled!. I tracked it for 12m and the home had not sold. The owners were in a similar situation, retired, moved downstate, built a new home and were not in any financial need to sell so they choose to hold on to it.

*For what its worth, I would rather negotiate on home like I do cars, I know what its worth to me I give a fair offer and its either accepted or not , easy and quick. However we needed a home and the realtor encourage me to leave room for negotiation so they sellers feel like we "gave in" when we counter up - I am sure it may have some psychological appeal but seems like waste of time and I am not out for the cheapest but a fair deal for all parties.

Best of luck

KyleAAA
Posts: 7577
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Real Estate Negotiation Came to a Halt

Post by KyleAAA » Thu Aug 08, 2019 3:18 pm

I'm not sure $/sqft is really a valid metric to hang on. As you say, the lot is larger. But also, the size of the house makes a big diffrence. You wouldn't expect a huge 5 bedroom house to sell at the same $/sqft as a small 2 bedroom house even if everything else were identical. What does your realtor think the comps would imply the property is worth?

GUtiger
Posts: 30
Joined: Thu Jun 29, 2017 10:47 pm

Re: Real Estate Negotiation Came to a Halt

Post by GUtiger » Thu Aug 08, 2019 3:20 pm

Another option is to come up on the offer to $9xx, whatever you think may get them to bite, and then ask for a major price reduction after inspections. They can say no and you can walk away, or they may feel they're far enough in the process that they just want to get it done. You can decide whether you think that is ethical or not.

renue74
Posts: 1775
Joined: Tue Apr 07, 2015 7:24 pm

Re: Real Estate Negotiation Came to a Halt

Post by renue74 » Thu Aug 08, 2019 3:21 pm

It's not a buyer's market yet. Like the other poster said, if I were the seller, I wouldn't acknowledge your low ball offer.

I would move on and find another property.

deltaneutral83
Posts: 1336
Joined: Tue Mar 07, 2017 4:25 pm

Re: Real Estate Negotiation Came to a Halt

Post by deltaneutral83 » Thu Aug 08, 2019 3:22 pm

GUtiger wrote:
Thu Aug 08, 2019 3:20 pm
Another option is to come up on the offer to $9xx, whatever you think may get them to bite, and then ask for a major price reduction after inspections. They can say no and you can walk away, or they may feel they're far enough in the process that they just want to get it done. You can decide whether you think that is ethical or not.
Not in a state with diligence. Seller has leverage there.

Rus In Urbe
Posts: 520
Joined: Sat Dec 09, 2017 2:12 pm

Re: Real Estate Negotiation Came to a Halt

Post by Rus In Urbe » Thu Aug 08, 2019 3:24 pm

You can waste a lot of time wondering what they are up to.
They are simply looking for the most money they can get.
You are looking to pay the least (or at least what you think the house is worth).

They may be talking to other buyers who can come closer to their price.
You just need to decide what it's worth to you and draw a line in the sand---or, keep playing the game.

As to cost per square foot----I never think that is conclusive, even when comparing houses in the neighborhood. So many other factors can make a property desirable or un-, like lot size, siting location, details of the property itself, and condition of the house.

Good luck in your negotiations! :beer
I'd like to live as a poor man with lots of money. ~Pablo Picasso

Topic Author
jfmiii
Posts: 58
Joined: Fri Apr 25, 2014 1:36 pm

Re: Real Estate Negotiation Came to a Halt

Post by jfmiii » Thu Aug 08, 2019 3:28 pm

KyleAAA wrote:
Thu Aug 08, 2019 3:18 pm
I'm not sure $/sqft is really a valid metric to hang on. As you say, the lot is larger. But also, the size of the house makes a big diffrence. You wouldn't expect a huge 5 bedroom house to sell at the same $/sqft as a small 2 bedroom house even if everything else were identical. What does your realtor think the comps would imply the property is worth?
My realtor agrees with my valuation. She thinks it is only worth in the 900s if someone from NYC or SF come in and think it is cheap relative to what they are used to seeing. I am only using homes that sold for 800k-1250k when looking at square footage comps. Here are the averages. The home Im interested in is 4BR/3.5BA, 2631sq ft, 15000 sq ft lot size.

Avg Selling Price Avg BR Avg Bath Avg SqFt Avg Lot Size Avg Price/SqFt
$ 868,000.69 4.3125 3.3125 3142.32 10235.3 $ 298.16

HomeStretch
Posts: 2882
Joined: Thu Dec 27, 2018 3:06 pm

Re: Real Estate Negotiation Came to a Halt

Post by HomeStretch » Thu Aug 08, 2019 3:29 pm

There is such a large gap between you at $850k and Seller in high $900s that I personally wouldn’t go back to the Seller with $850k. They have your phone number. If the market is slow and they are moving soon, they will call you if they really want to go that low. If your best offer at $850k is really market value (rather than a low ball), they will eventually have to reduce price to sell.

User avatar
JoeRetire
Posts: 3847
Joined: Tue Jan 16, 2018 2:44 pm

Re: Real Estate Negotiation Came to a Halt

Post by JoeRetire » Thu Aug 08, 2019 3:31 pm

jfmiii wrote:
Thu Aug 08, 2019 2:49 pm
Is this deal dead in the water? Do I go back with a best and final (~$330/sq ft)? Do I go back with $850,000 to put pressure on them that they may be dismissing a very good chance at selling? Or do I just sit and wait and see if they come back? I want the house but I'm not going to pay much more than what the numbers tell me it is worth. I'm having a hard time stomaching going back and giving them the upper hand in the negotiation. Thanks BHs!
Your agent should be able to give you good local advice specific to your market. But missing out on a house you want because you don't want to give them "the upper hand" makes no sense to me.

You have already decided what you think the house is worth. It seems to me that if you actually want the house, you should go back with your best and final offer and leave it at that. Offer what you feel it's worth to you - that's the only thing that really matters.

It probably won't work, but you have nothing to lose.
Last edited by JoeRetire on Thu Aug 08, 2019 3:33 pm, edited 2 times in total.
Don't be a lemming.

KyleAAA
Posts: 7577
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Real Estate Negotiation Came to a Halt

Post by KyleAAA » Thu Aug 08, 2019 3:32 pm

jfmiii wrote:
Thu Aug 08, 2019 3:28 pm
KyleAAA wrote:
Thu Aug 08, 2019 3:18 pm
I'm not sure $/sqft is really a valid metric to hang on. As you say, the lot is larger. But also, the size of the house makes a big diffrence. You wouldn't expect a huge 5 bedroom house to sell at the same $/sqft as a small 2 bedroom house even if everything else were identical. What does your realtor think the comps would imply the property is worth?
My realtor agrees with my valuation. She thinks it is only worth in the 900s if someone from NYC or SF come in and think it is cheap relative to what they are used to seeing. I am only using homes that sold for 800k-1250k when looking at square footage comps. Here are the averages. The home Im interested in is 4BR/3.5BA, 2631sq ft, 15000 sq ft lot size.

Avg Selling Price Avg BR Avg Bath Avg SqFt Avg Lot Size Avg Price/SqFt
$ 868,000.69 4.3125 3.3125 3142.32 10235.3 $ 298.16
$/sqft varies inversely with square footage, so I would expect a home 500 sq ft smaller to sell for a higher $/sqft. Whether or not the difference should be 10% is open to debate. The lot size looks to be 50% larger, which isn't minor. I dunno, I'd probably be inclined to meet in the middle.

Flyer24
Moderator
Posts: 1201
Joined: Sun Apr 08, 2018 4:21 pm

Re: Real Estate Negotiation Came to a Halt

Post by Flyer24 » Thu Aug 08, 2019 3:35 pm

I am am surprised the seller even countered. You made an offer that was almost 20% lower than their already lowered price. I would look for another house or be more reasonable in your offer.

gougou
Posts: 215
Joined: Thu Sep 28, 2017 7:42 pm
Location: San Francisco Bay Area

Re: Real Estate Negotiation Came to a Halt

Post by gougou » Thu Aug 08, 2019 3:39 pm

You said you could pay cash, why don't you put in an unconditional offer? You could still leave enough time for getting a mortgage. If you walk away they could keep your security deposit, which is a very strong incentive for them to take your offer.

User avatar
Watty
Posts: 17599
Joined: Wed Oct 10, 2007 3:55 pm

Re: Real Estate Negotiation Came to a Halt

Post by Watty » Thu Aug 08, 2019 3:42 pm

bloom2708 wrote:
Thu Aug 08, 2019 2:59 pm
Nearly $200k from lowered asking? :(

If I was the seller I wouldn't even reply.
+1000

If the seller was desperate to sell they could lower the listing price from $999K to $900K to see what sort of interest they got at that level.

If they actually accepted your offer or counter in the lows $800s without having lowered their price several more times then I would be concerned that they know something that you don't.

I would hate to close in 21 days only to find out that they are breaking ground on the new sewage treatment plant nextdoor in 22 days. :wink:

User avatar
Sandtrap
Posts: 8465
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Real Estate Negotiation Came to a Halt

Post by Sandtrap » Thu Aug 08, 2019 3:43 pm

1. Seller tactics to contact your lender were not professional. Letter of verification of funds and credit for said amount should suffice. Also your realtor representation. Very uncool.

2. Seller has obviously decided, at least for now, that your solid offer is not what they want. They tested to see how far you would move but ran out of negotiating room.

3. Don't counter against your best offer. Once you do that, then you become "needy" and they have the upper hand to keep calling the shots until you give in and pay more.

4. Unless you really really really really want this home. Set your best price. Make that offer non negotiable with no contingencies. And then, they can take it or leave it. Put a deadline on it. You've done your best.

5. Failing the above, look for another place. Not every deal can be closed. Not every issue is fixable. In this case, you found out their "low", and they found out your "high".

j
Last edited by Sandtrap on Thu Aug 08, 2019 3:44 pm, edited 1 time in total.
Wiki Bogleheads Wiki: Everything You Need to Know

Topic Author
jfmiii
Posts: 58
Joined: Fri Apr 25, 2014 1:36 pm

Re: Real Estate Negotiation Came to a Halt

Post by jfmiii » Thu Aug 08, 2019 3:43 pm

renue74 wrote:
Thu Aug 08, 2019 3:21 pm
It's not a buyer's market yet. Like the other poster said, if I were the seller, I wouldn't acknowledge your low ball offer.

I would move on and find another property.
trust me. it is a buyer's mkt in this area. i am in one of the most heavily taxed areas of the country. inventory is around 9 months. my realtor has been selling homes for 30 years in this area and said it has never been worse in this time frame. homes are selling for less than they did 20 years ago.

User avatar
Sandtrap
Posts: 8465
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Real Estate Negotiation Came to a Halt

Post by Sandtrap » Thu Aug 08, 2019 3:45 pm

jfmiii wrote:
Thu Aug 08, 2019 3:43 pm
renue74 wrote:
Thu Aug 08, 2019 3:21 pm
It's not a buyer's market yet. Like the other poster said, if I were the seller, I wouldn't acknowledge your low ball offer.

I would move on and find another property.
trust me. it is a buyer's mkt in this area. i am in one of the most heavily taxed areas of the country. inventory is around 9 months. my realtor has been selling homes for 30 years in this area and said it has never been worse in this time frame. homes are selling for less than they did 20 years ago.
Whether buyers or sellers market matters not. Every seller has unique motives. Every deal is different. Not every seller is motivated despite market conditions.

j
Wiki Bogleheads Wiki: Everything You Need to Know

Topic Author
jfmiii
Posts: 58
Joined: Fri Apr 25, 2014 1:36 pm

Re: Real Estate Negotiation Came to a Halt

Post by jfmiii » Thu Aug 08, 2019 3:47 pm

KyleAAA wrote:
Thu Aug 08, 2019 3:32 pm
jfmiii wrote:
Thu Aug 08, 2019 3:28 pm
KyleAAA wrote:
Thu Aug 08, 2019 3:18 pm
I'm not sure $/sqft is really a valid metric to hang on. As you say, the lot is larger. But also, the size of the house makes a big diffrence. You wouldn't expect a huge 5 bedroom house to sell at the same $/sqft as a small 2 bedroom house even if everything else were identical. What does your realtor think the comps would imply the property is worth?
My realtor agrees with my valuation. She thinks it is only worth in the 900s if someone from NYC or SF come in and think it is cheap relative to what they are used to seeing. I am only using homes that sold for 800k-1250k when looking at square footage comps. Here are the averages. The home Im interested in is 4BR/3.5BA, 2631sq ft, 15000 sq ft lot size.

Avg Selling Price Avg BR Avg Bath Avg SqFt Avg Lot Size Avg Price/SqFt
$ 868,000.69 4.3125 3.3125 3142.32 10235.3 $ 298.16
$/sqft varies inversely with square footage, so I would expect a home 500 sq ft smaller to sell for a higher $/sqft. Whether or not the difference should be 10% is open to debate. The lot size looks to be 50% larger, which isn't minor. I dunno, I'd probably be inclined to meet in the middle.
I thought that as well but in this area, at least in the last 6 months, more square footage commands a more money per square foot.

brianH
Posts: 321
Joined: Wed Aug 12, 2009 12:21 pm

Re: Real Estate Negotiation Came to a Halt

Post by brianH » Thu Aug 08, 2019 3:47 pm

You got some really great advise in this thread.

I just wanted to remark that this is why, as a seller, listing too high (dream price) can be problematic. Some sellers think that a high price is just the start of a negotiation, and that offers will potentially come in lower and they can adjust. Oftentimes, however, people will just avoid making any offers (even lower than list), because they feel that the seller will be unreasonable and unwilling to come down. As it seems in this case, that is true more often than not, and it isn't worth 'lowballing' an offer if the buyer and seller are more than, say, 5-10% away from each other.

User avatar
midareff
Posts: 6459
Joined: Mon Nov 29, 2010 10:43 am
Location: Biscayne Bay, South Florida

Re: Real Estate Negotiation Came to a Halt

Post by midareff » Thu Aug 08, 2019 3:51 pm

Some people list property they really don't want to sell... that is unless it is well worth their while. I'd move along.

Topic Author
jfmiii
Posts: 58
Joined: Fri Apr 25, 2014 1:36 pm

Re: Real Estate Negotiation Came to a Halt

Post by jfmiii » Thu Aug 08, 2019 3:51 pm

Flyer24 wrote:
Thu Aug 08, 2019 3:35 pm
I am am surprised the seller even countered. You made an offer that was almost 20% lower than their already lowered price. I would look for another house or be more reasonable in your offer.
my realtor told the seller's realtor that I was in the 800s and asked if we were wasting our time with that offer. we were not told that we were wasting anyone's time. quite the contrary, the selling broker wanted to see how strong of a buyer i was.

Dottie57
Posts: 7118
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: Real Estate Negotiation Came to a Halt

Post by Dottie57 » Thu Aug 08, 2019 3:54 pm

With draw the offer. Keep looking. This is not the only house in the world. Don’t believe the agents- their incentive is to get it sold. Both of them.
Last edited by Dottie57 on Thu Aug 08, 2019 3:55 pm, edited 1 time in total.

yohac
Posts: 208
Joined: Sat Sep 01, 2018 1:42 pm

Re: Real Estate Negotiation Came to a Halt

Post by yohac » Thu Aug 08, 2019 3:54 pm

I don't see a deal being made here. They are (apparently) overpriced and IMO were out of line insisting on talking to your lender. And you have been lowballing. I think they'd reject your 850K just out of principle. At least for now.

jtdavid
Posts: 111
Joined: Thu Mar 01, 2007 12:21 pm

Re: Real Estate Negotiation Came to a Halt

Post by jtdavid » Thu Aug 08, 2019 3:55 pm

I would sit tight and keep looking for other properties. And I wouldn't be surprised if they reach back out to you in a couple weeks.

Dave55
Posts: 566
Joined: Tue Sep 03, 2013 2:51 pm

Re: Real Estate Negotiation Came to a Halt

Post by Dave55 » Thu Aug 08, 2019 3:59 pm

jfmiii wrote:
Thu Aug 08, 2019 3:43 pm
renue74 wrote:
Thu Aug 08, 2019 3:21 pm
It's not a buyer's market yet. Like the other poster said, if I were the seller, I wouldn't acknowledge your low ball offer.

I would move on and find another property.
trust me. it is a buyer's mkt in this area. i am in one of the most heavily taxed areas of the country. inventory is around 9 months. my realtor has been selling homes for 30 years in this area and said it has never been worse in this time frame. homes are selling for less than they did 20 years ago.
What harm can come if you make your best and final offer?


Dave

User avatar
Sandtrap
Posts: 8465
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Real Estate Negotiation Came to a Halt

Post by Sandtrap » Thu Aug 08, 2019 4:00 pm

jfmiii wrote:
Thu Aug 08, 2019 3:51 pm
Flyer24 wrote:
Thu Aug 08, 2019 3:35 pm
I am am surprised the seller even countered. You made an offer that was almost 20% lower than their already lowered price. I would look for another house or be more reasonable in your offer.
my realtor told the seller's realtor that I was in the 800s and asked if we were wasting our time with that offer. we were not told that we were wasting anyone's time. quite the contrary, the selling broker wanted to see how strong of a buyer i was.
Yes. Good point.
I would've done the same thing. Qualify the buyer. See if he's worth working with.

Sometimes you have to pull gently on the line or the fish gets away. :shock:

j
Wiki Bogleheads Wiki: Everything You Need to Know

gips
Posts: 583
Joined: Mon May 13, 2013 5:42 pm

Re: Real Estate Negotiation Came to a Halt

Post by gips » Thu Aug 08, 2019 4:11 pm

no one who had a recent offer for $950k is going to drop $100k unless they're under severe financial pressure. I've negotiated 100s of contracts, here's my suggestion:

- tell them your goal is a fair price for both sides
- Show them the comps supporting your price.
- ask them for comps supporting their price. If they refuse, ask how they'd like to arrive at a fair price. If they don't make sense, time to walk.
- analyze their comps. Are they fair? do they reflect current market value? have a conversation with them around that

bottom line, you can't have a negotiation around the price you want vs the price they want but you can have a negotiation around objective metrics (comps).

luck,

Topic Author
jfmiii
Posts: 58
Joined: Fri Apr 25, 2014 1:36 pm

Re: Real Estate Negotiation Came to a Halt

Post by jfmiii » Thu Aug 08, 2019 4:15 pm

Dave55 wrote:
Thu Aug 08, 2019 3:59 pm
jfmiii wrote:
Thu Aug 08, 2019 3:43 pm
renue74 wrote:
Thu Aug 08, 2019 3:21 pm
It's not a buyer's market yet. Like the other poster said, if I were the seller, I wouldn't acknowledge your low ball offer.

I would move on and find another property.
trust me. it is a buyer's mkt in this area. i am in one of the most heavily taxed areas of the country. inventory is around 9 months. my realtor has been selling homes for 30 years in this area and said it has never been worse in this time frame. homes are selling for less than they did 20 years ago.
What harm can come if you make your best and final offer?


Dave
This is sort of where I'm at. We are looking at other homes and I dont want the cloud of this house hanging over my head for the next few months.

I do appreciate everyone's thoughts! I am not a low baller, I was negotiating in good faith with hard data to determine a fair price (at least in my mind) and even instructed my realtor to tell the opposing realtor I was in the 800s before bidding.

psteinx
Posts: 3423
Joined: Tue Mar 13, 2007 2:24 pm

Re: Real Estate Negotiation Came to a Halt

Post by psteinx » Thu Aug 08, 2019 4:39 pm

In the 800s is one thing. But you came in at 815, with a non-cash offer.

Sure, it didn't hurt them to say "make us an offer". If the offer was 895, all cash, or super-strong financing, perhaps you would have gotten a stronger response.

Figure out what the house is worth, TO YOU (bearing in mind what your other likely alternatives/comps are). Negotiate with that value in mind, and if it's fairly clear that the seller is well above your price, then move along - save yourself (and them, FWIW), the time and mental aggravation.

User avatar
Nate79
Posts: 5177
Joined: Thu Aug 11, 2016 6:24 pm
Location: Delaware

Re: Real Estate Negotiation Came to a Halt

Post by Nate79 » Thu Aug 08, 2019 4:55 pm

psteinx wrote:
Thu Aug 08, 2019 4:39 pm
In the 800s is one thing. But you came in at 815, with a non-cash offer.

Sure, it didn't hurt them to say "make us an offer". If the offer was 895, all cash, or super-strong financing, perhaps you would have gotten a stronger response.

Figure out what the house is worth, TO YOU (bearing in mind what your other likely alternatives/comps are). Negotiate with that value in mind, and if it's fairly clear that the seller is well above your price, then move along - save yourself (and them, FWIW), the time and mental aggravation.
Agreed. Buyers agent sounds incompetent at best to even make such a low ball offer. And even talking about $/sqft is absurd. And the offer is weak considering it is financing, not all cash.

livesoft
Posts: 68568
Joined: Thu Mar 01, 2007 8:00 pm

Re: Real Estate Negotiation Came to a Halt

Post by livesoft » Thu Aug 08, 2019 5:02 pm

I would not assign any imaginary motives to the seller. Just move on or come back to this in a few months.
Wiki This signature message sponsored by sscritic: Learn to fish.

chevca
Posts: 2816
Joined: Wed Jul 26, 2017 11:22 am

Re: Real Estate Negotiation Came to a Halt

Post by chevca » Thu Aug 08, 2019 5:11 pm

jfmiii wrote:
Thu Aug 08, 2019 4:15 pm
Dave55 wrote:
Thu Aug 08, 2019 3:59 pm
jfmiii wrote:
Thu Aug 08, 2019 3:43 pm
renue74 wrote:
Thu Aug 08, 2019 3:21 pm
It's not a buyer's market yet. Like the other poster said, if I were the seller, I wouldn't acknowledge your low ball offer.

I would move on and find another property.
trust me. it is a buyer's mkt in this area. i am in one of the most heavily taxed areas of the country. inventory is around 9 months. my realtor has been selling homes for 30 years in this area and said it has never been worse in this time frame. homes are selling for less than they did 20 years ago.
What harm can come if you make your best and final offer?


Dave
This is sort of where I'm at. We are looking at other homes and I dont want the cloud of this house hanging over my head for the next few months.

I do appreciate everyone's thoughts! I am not a low baller, I was negotiating in good faith with hard data to determine a fair price (at least in my mind) and even instructed my realtor to tell the opposing realtor I was in the 800s before bidding.
Um, you offered $815k on a $999k house, which you knew almost sold for $950k. I don't know what your definition of a low baller is, but that fits mine. Telling them beforehand just means you were upfront about being one. :happy

Either way though. Their counter was $989k. I'd say it's highly unlikely you guys are going to meet in the middle. Doesn't sound like you'd even be willing to break into the $900k range. It wouldn't hurt to put another offer in, but if you're not going to offer $900k plus they're going to ignore it.

As someone said, what is the house worth TO YOU? Offer that and see what they say.

You seem pretty hung up on this one. You sure you don't want the 'win' more than the house? If the sellers aren't going to let this one go for what you think it's worth, move on to the next one.

Golf maniac
Posts: 321
Joined: Wed Dec 27, 2017 2:02 pm
Location: Florida

Re: Real Estate Negotiation Came to a Halt

Post by Golf maniac » Thu Aug 08, 2019 5:13 pm

jfmiii wrote:
Thu Aug 08, 2019 4:15 pm
Dave55 wrote:
Thu Aug 08, 2019 3:59 pm
jfmiii wrote:
Thu Aug 08, 2019 3:43 pm
renue74 wrote:
Thu Aug 08, 2019 3:21 pm
It's not a buyer's market yet. Like the other poster said, if I were the seller, I wouldn't acknowledge your low ball offer.

I would move on and find another property.
trust me. it is a buyer's mkt in this area. i am in one of the most heavily taxed areas of the country. inventory is around 9 months. my realtor has been selling homes for 30 years in this area and said it has never been worse in this time frame. homes are selling for less than they did 20 years ago.
What harm can come if you make your best and final offer?


Dave
This is sort of where I'm at. We are looking at other homes and I dont want the cloud of this house hanging over my head for the next few months.

I do appreciate everyone's thoughts! I am not a low baller, I was negotiating in good faith with hard data to determine a fair price (at least in my mind) and even instructed my realtor to tell the opposing realtor I was in the 800s before bidding.
You just need to walk away and look for a home that is more within the price per square foot you are comfortable with. If it is truly a buyers market and you per square foot price is correct you should have a lot to choose from. Also, I wouldn’t trust the seller agent or your agent as far as you can throw them. Their personal interest is in getting a deal done for the highest price to maximize their commissions.

7eight9
Posts: 422
Joined: Fri May 17, 2019 7:11 pm

Re: Real Estate Negotiation Came to a Halt

Post by 7eight9 » Thu Aug 08, 2019 5:27 pm

I sold a condo a couple of years ago. My realtor brought me what I considered an insulting offer (must bring all offers per statute). I told him (and signed paperwork relieving him of responsibility) not to bring be me offers below $xx. I knew my market and wasn't interested in being insulted. If I was a seller and believed my pricing was correct I would sit back and wait to see what the market brought. If you think your offer is good then sit around and wait. Maybe the seller's agent will contact your realtor. Given the delta I would probably advise looking for other houses.
I guess it all could be much worse. | They could be warming up my hearse.

MathWizard
Posts: 3628
Joined: Tue Jul 26, 2011 1:35 pm

Re: Real Estate Negotiation Came to a Halt

Post by MathWizard » Thu Aug 08, 2019 5:30 pm

Walk away, do not make another offer.

Look at other houses. If you keep offering, they have no incentive to come down.
Maybe when they move and the property taxes, insurance and upkeep for their unoccupied
home become real, they will be more motivated.

With our current house, we did not have to move, but wanted to (moving up in the same town).
We offered on a house that was a fixer upper and had been on the market for 6 months with
no drop in price.
We offered 15% less than what they wanted, and stood firm on their counter, so no deal, and
we moved on, looking at houses when they became available which fit our criteria. We did not
want to be rushed.

6 months later, the house had still not sold, and our agent was contacted by the seller's
agent who asked if we would buy at what we had offered. Even though the deal was not as good
for us because interest rates had increased in the intervening months, we agreed and did not dicker.

Trader Joe
Posts: 1257
Joined: Fri Apr 25, 2014 6:38 pm

Re: Real Estate Negotiation Came to a Halt

Post by Trader Joe » Thu Aug 08, 2019 5:56 pm

jfmiii wrote:
Thu Aug 08, 2019 2:49 pm
I'm interested in a home that is listed for $999,000. It has been listed since early April. The sellers have decreased the list price from $1.15mm to $1.075mm to $999k. They had a deal in place that fell through when the listing was at $1.075m. The opposing realtor told my realtor it was under $950k but close to $950k. The home has now been on the market for 2 weeks at $999k and has had one open house. They have received no offers. Before submitting an offer my realtor indicated I was very interested in the home but didnt feel it was worth what they were asking based on recent sales $/sq ft data (this home is at $380/sq ft vs recent sales in the area closer to $300). It has a larger lot. My realtor indicated I would care "in the $800s" and asked if we were wasting our time. Realtor asked if I could pay cash, if I could close within 21 days, etc. My realtor indicated yes, I could close within 21 days, she didnt know if I could pay cash but that I was well qualified to purchase the home. So, I submitted an offer for $815,000 ($310 per sq ft) along with a copy of a pre-approval from Chase. After the offer was submitted, she wanted to speak to my lender. Ok, fine; I have known my broker at Chase for years and we spoke and agreed he wouldnt divulge any financial information or my buying power. Before she was able to get a hold of him, they countered at $989k. A bit miffed, I didnt want to counter but my realtor convinced me to come up $10k, just to keep the dialogue open. So I did. The opposing realtor called my broker and said she wouldnt counter again until speaking with my lender. My lender called her back, told her I was well qualified and would be wise to accept a deal with me. My lender told me that she was fishing to see how much more I could pay and that she said there wouldnt be a deal unless the price was well into the 900s. She subsequently called back 20 minutes later and asked the lender if I could close in 21 days and he told her no problem. My counter expired at 6pm that day at which point the seller said they werent going to counter. This was on Tuesday. Seeing no need to negotiate against myself, I have left it. I am in a very slow market, in a very high tax area. The seller is moving out of state to retire but I dont believe they are in financial need to sell; their mortgage is small according to County office. Is this deal dead in the water? Do I go back with a best and final (~$330/sq ft)? Do I go back with $850,000 to put pressure on them that they may be dismissing a very good chance at selling? Or do I just sit and wait and see if they come back? I want the house but I'm not going to pay much more than what the numbers tell me it is worth. I'm having a hard time stomaching going back and giving them the upper hand in the negotiation. Thanks BHs!
"Do I go back with a best and final (~$330/sq ft)? Do I go back with $850,000 to put pressure on them that they may be dismissing a very good chance at selling? Or do I just sit and wait and see if they come back? I want the house but I'm not going to pay much more than what the numbers tell me it is worth. I'm having a hard time stomaching going back and giving them the upper hand in the negotiation. Thanks BHs!

I would submit my best and final offer. I am never concerned with what the seller (or their representative) want.

mayday23
Posts: 150
Joined: Mon Feb 10, 2014 10:29 am

Re: Real Estate Negotiation Came to a Halt

Post by mayday23 » Thu Aug 08, 2019 6:15 pm

i've been on both sides of this. as a buyer we made a "low" offer and was rejected. We moved on and the house sold below our offer a year later.

we were sellers and someone low balled us. We didn't counter because we felt it wasn't worth negotiating when we were so far apart.

The only thing i'm confident in with house buying is it is emotional. Sellers care what they bought the house for and have a number in their mind of what it is worth because it's theirs. No comps are going to compare to theirs because they did repairs better than anyone else could've.

I would not recommend re-submitting an offer at this point. you're negotiating against yourself. Best case is the house sits for a while and the seller comes back to you.

User avatar
Kenkat
Posts: 5348
Joined: Thu Mar 01, 2007 11:18 am
Location: Cincinnati, OH

Re: Real Estate Negotiation Came to a Halt

Post by Kenkat » Thu Aug 08, 2019 6:45 pm

Buyer’s idea of “in the 800s”: $800,001.00
Seller’s idea of “in the 800s”: $899,999,98

I would wait a few months; if you haven’t found something else by then, come back with your best offer. They may be in a different mood by then. If a lower price is indeed the reality, they are not yet ready to accept that. If instead it sells above your price, then you came in too low. It’s a painful process overall.

jaydub71
Posts: 19
Joined: Thu Jan 24, 2019 7:40 am

Re: Real Estate Negotiation Came to a Halt

Post by jaydub71 » Thu Aug 08, 2019 6:51 pm

Your agent failed to manage expectations of everyone involved. Your agent should have said the offer will come in the low 800s, rather than 800s. While the difference is only semantics, I think it would have avoided wasting everyone's time as the seller would have said to not even bother making an offer. Their counter of only $10k lower was a way to tell you to "kiss off".

Freetime76
Posts: 107
Joined: Wed Jun 26, 2019 8:26 pm

Re: Real Estate Negotiation Came to a Halt

Post by Freetime76 » Thu Aug 08, 2019 6:59 pm

Lots of good advice and perspective here!
A few thoughts:
1. Decide if you actually want the house or not. Are you lukewarm about it or is it you want the house "no matter what" or is it only worth it if....?

2. Sometimes pricing seems awfully arbitrary to me :| especially when there is something "different" about the house/property. Our area is a good market, but not super hot. I've noticed that just because a house sits on the market for a while (6 months or more) does not necessarily mean that it sells for a lower % of asking or $/sq ft. Some sellers just wait.

3. Numbers matter not ($/sq ft and such), when one or more parties is so-so on the deal. From the way you write about this house, it doesn't sound like you're hugely emotionally invested in it (e.g. you didn't say "oh, I love this house"...). That is safe financially, and if what you say - that the house would look cheap if someone is from a more expensive area - is accurate based on comps, then the smarter thing would be to buy a different house. I think it's common to hear that you make your money on the buy, if this is a concern for you.

In this case, 100K/20% difference is too much for me as a seller OR buyer. Offer:list should be closer together based on comps and current inventory that's listed. Good luck

Freetime76
Posts: 107
Joined: Wed Jun 26, 2019 8:26 pm

Re: Real Estate Negotiation Came to a Halt

Post by Freetime76 » Thu Aug 08, 2019 7:04 pm

Kenkat wrote:
Thu Aug 08, 2019 6:45 pm
Buyer’s idea of “in the 800s”: $800,001.00
Seller’s idea of “in the 800s”: $899,999,98

I would wait a few months; if you haven’t found something else by then, come back with your best offer. They may be in a different mood by then. If a lower price is indeed the reality, they are not yet ready to accept that. If instead it sells above your price, then you came in too low. It’s a painful process overall.
Nailed it. 8-) Or maybe $899,999.99.

I'm in the camp of sellers who are eternally optimistic. Optimism buoyed by low holding costs and a healthy dose of patience.
I suppose the buyer's version of above is cash buyer, no contingencies, and willing to keep looking.

P.S. And a great realtor/broker who is willing to humor me. (edited to add this.)

User avatar
TexasPE
Posts: 238
Joined: Sat Feb 17, 2018 8:41 pm
Location: Southeast Texas

Re: Real Estate Negotiation Came to a Halt

Post by TexasPE » Thu Aug 08, 2019 8:25 pm

chevca wrote:
Thu Aug 08, 2019 5:11 pm
. You sure you don't want the 'win' more than the house?
A little off-topic: Reminds me of selling my home in the Thousand Oaks CA area in 1989. A super-seller's market - new listing prices were going up 10% per month based on comps.

Anyway I gave our agent an 'absolute' bottom of x dollars. The eventual purchaser offered $5 (yes, five dollars) less! I had no problem accepting the offer and breaking my 'absolute' bottom. :D The house value (smallest contractor's floor plan) had doubled in the 4 years I owned it, so I was able to build a custom home in Texas. :sharebeer

A house, like most things, is worth what someone will pay for it.
At 20: I cared what everyone thought about me | At 40: I didn't give a damn what anyone thought of me | Now that I'm 60: I realize that no one was really thinking about me at all | Winston Churchill (?)

Clemblack
Posts: 44
Joined: Sun Jan 21, 2018 1:19 pm

Re: Real Estate Negotiation Came to a Halt

Post by Clemblack » Thu Aug 08, 2019 8:38 pm

I believe you're overthinking the situation, and I think people often make this mistake during real estate negotiation. That's not to say that contemplating the purchase of a $1M home isn't deserving of much thought - it absolutely is. But once we reach our opinion of value, any effort to convince the other side that we're correct is a fool's errand. Your opinion of value is not relevant to the seller. Two people can have vastly differing opinions of value and, in those cases, a deal is of course unlikely to be reached.

If I were you, and I still wanted the house, I would submit my "highest and best" offer to the seller immediately. I see no value in delaying. At that point, you'll know where you stand and you can either buy the house or remove it from your list of prospects.

Iridium
Posts: 526
Joined: Thu May 19, 2016 10:49 am

Re: Real Estate Negotiation Came to a Halt

Post by Iridium » Thu Aug 08, 2019 9:20 pm

Move on. I wouldn't even bother with a best and final. Perhaps a few months down the road you'll get contacted wondering if you might still be interested, or maybe after you get a better feel for prices as a buyer, you'll feel more comfortable offering a bit more. Regardless, at this point, there is no point dwelling on this place. There are plenty out there that are just as good, so go out there and buy one. The sooner you make an offer on the next place, the sooner you'll buy a home.

Just to relate my experience, even though it was a very different market: I think I made offers on a half dozen places before one was accepted. The first offer was exciting and I put way too much energy into it. By the end, I didn't let an outstanding offer slow me down from continuing to look at places (at one point, I was preparing an offer on the next place even before the offer on the last place had expired). As I went through the process, it became easier for me to figure out that a place would be suitable and what I was willing to pay for it.

User avatar
Sandtrap
Posts: 8465
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Real Estate Negotiation Came to a Halt

Post by Sandtrap » Thu Aug 08, 2019 9:22 pm

Trader Joe wrote:
Thu Aug 08, 2019 5:56 pm
. . . . . .
I would submit my best and final offer. I am never concerned with what the seller (or their representative) want.
++++++++ 1
Absolutely!
j :happy
Wiki Bogleheads Wiki: Everything You Need to Know

Post Reply