Selling home - low ball negotiation

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FishTaco
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Re: Selling home - low ball negotiation

Post by FishTaco »

htdrag11 wrote: Thu May 14, 2020 9:52 pm
Normchad wrote: Thu May 14, 2020 9:13 pm With 20+ Million suddenly unemployed, and many millions more in economic distress, I think this is definitely a buyers market. Meaning, your buyers have more houses to choose from, and you're unlikely to find other, better offers. How many equivalent homes are in the area that the buyers could alternate choose from? If it's a lot, they really should be looking for a deeper discount. A 90% offer does not sound "low ball" to me. "Low ball" to me would be something like 30%+ below asking price.

So it comes down to how important it is to you to sell, now. Buyers will certainly expect a discount. And it might be the case that if you "met in the middle", they would be content with 5% off. The suggestion above to agree to "as-is" is an excellent starting point as well. With a 20 year old roof, they could be asking for consideration there.

I think if you agree to 95% of what you were asking for, you are doing well, all things considered.
Good point. The market in our area, even before the virus, was slim picking. It got worse since fewer people want to list and have strangers walking in. Being a buyer and seller in the same high rent county, we are in a no win situation. As someone suggest, we could counteroffer at 100% or just a token $5k off to see how it goes.

BTW, the buyer's other half is pregnant (kind of hard to hide even from a distance) and would like to move in within 60 days. On the 2nd visit, brought their contractor with them contemplating remodeling the house regardless.
From what you've said in this thread so far, these guys are loaded and are going to buy your house if they decide they want it. 80% down payment? Wife about to pop? Making their contractor tag along on the SECOND visit? Yeah, I'd come down in price enough to keep them on the line and not piss them off, but it sounds like they want to buy your house and money isn't really an issue.

Your token 5k off sounds reasonable.
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gr7070
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Re: Selling home - low ball negotiation

Post by gr7070 »

As others have noted, 10% under asking is not low-ball. Especially in today's market - I would expect any offer to potentially be all over the place.

The suggestions for as is (no inspection contingency) *offers* are poor.

First, it makes it look like you have something to hide. Every buyer should run from that seller!

Also, who in their right mind would buy a multi-hundreds-of-thousands-of-dollars anything without the ability to inspect it, unless it has a warranty. No, AHS is not that kind of warranty.

If they have, even poor, representation they'll almost certainly be advised to run.

I wouldn't be surprised if an inspection contingency was a legal requirement in some (many?) states/municipalities???

Ultimately, post-inspection contingency, homes are typically *sold* as is, not-warrantied. So you are protected in that regard, assuming you act in good faith.

I strongly suspect inspection contingencies are de rigueur in most every market. I could easily be wrong, but it certainly is in Texas.
carolinaman
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Re: Selling home - low ball negotiation

Post by carolinaman »

fabdog wrote: Thu May 14, 2020 8:03 pm Your broker should be able to recommend a counter offer strategy. What do they say? They, after all, are working for you, and you've hired them expressly for their expertise in selling a house

Mike
+1. Make the realtor earn their commission. However, make sure you are comfortable with the final price and agreement. I like the suggestion of an earlier post: set a final price and sell as-is. Your seem to have a reasonable fallback position to rent for a year. You need to decide which approach makes the most sense for you. Best wishes
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htdrag11
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Re: Selling home - low ball negotiation

Post by htdrag11 »

Livesoft, I always value your views.
Our neighbor across the street bought the house under foreclosure in 2017 for about 5% less than our asking price which we and our realtor thought was very competitive on a square foot basis, and year of built in the area. Also, for whatever reason, our neighbor is selling his house again in the spring last year after major inside renovation, for only about 2% more ( we priced just a bit less intentionally). Our plus is the lot size and wide open backyard, ready for a pool if necessary, as well as professionally landscape with curb appeal. Our siding is in much better condition. Appliance/furnace is top shelf plus a 17KW Generac, a must in our town with well and septic. I can assure you that we did not pick the listing price on a whim, since DW was not happy at all.

As some of you pointed out and after sitting overnight, 11% is not outrageous from the buyer's perspective. We're just trying to be patient in this crazy lockdown time.
Chip
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Re: Selling home - low ball negotiation

Post by Chip »

Kenkat wrote: Fri May 15, 2020 7:56 am
ScubaHogg wrote: Fri May 15, 2020 7:54 am The broker (notice I didn’t say “your broker”) isn’t incentivized to get you the best deal. They are incentivized to sell the house quickly. I wouldn’t rely on them at all for your offer/counter off strategy.
Brokers with this attitude don’t last very long in the broker business.
That's certainly not been my experience buying and selling several homes using brokers with many years of experience. They always want to get the deal done and will use whatever arguments they think will move the deal towards an agreement. Of course they word these arguments carefully so as to not tick off their client, but they do make them. I've gone against their negotiation advice in the past and came out better off. I finally quit asking for it.

People often pick the brokers who are most successful at selling houses. Those successful brokers don't sell lots of houses by minimizing prices that their buyer clients pay or maximizing prices that their seller clients pay.
fujiters
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Re: Selling home - low ball negotiation

Post by fujiters »

SchruteB&B wrote: Fri May 15, 2020 7:50 am
Momus wrote: Fri May 15, 2020 12:41 am I'd counter 10k above asking price. They mocked you and they should know.
Mocked? I don’t see that at all. This strategy is very common where I live. You list, they offer 90-92%ish, you negotiate and it usually winds up somewhere around 95% of ask.
+1

Especially true here. 89% offer might be mocking if there were a ton of offers coming in around or above asking. The lack of offers at current price would indicate that it's unlikely to sell at or near listing price--at least in the near future.
Last edited by fujiters on Fri May 15, 2020 9:53 am, edited 1 time in total.
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SchruteB&B
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Re: Selling home - low ball negotiation

Post by SchruteB&B »

randomguy wrote: Fri May 15, 2020 8:21 am
SchruteB&B wrote: Fri May 15, 2020 7:50 am
Momus wrote: Fri May 15, 2020 12:41 am I'd counter 10k above asking price. They mocked you and they should know.
Mocked? I don’t see that at all. This strategy is very common where I live. You list, they offer 90-92%ish, you negotiate and it usually winds up somewhere around 95% of ask.
Some people read it is 10% of list price (10k for a 100k house). Others read it as 10% below list (90k). A 10% offer isn't worth replying to. At 10% below list this is a pretty standard offer. You take a couple thousand off and counter back. How much to take off depends on how important it is to sell your house now and if getting less in the future is an OK outcome. As other people have pointed out these are abnormal times. Nobody can predict where real estate will be in 6 months.
The OP had clarified before the “mocked” post that it was an offer for 89% of original listing price.
livesoft
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Re: Selling home - low ball negotiation

Post by livesoft »

htdrag11 wrote: Fri May 15, 2020 9:31 am Livesoft, I always value your views.
Our neighbor across the street bought the house under foreclosure in 2017 for about 5% less than our asking price which we and our realtor thought was very competitive on a square foot basis, and year of built in the area. Also, for whatever reason, our neighbor is selling his house again in the spring last year after major inside renovation, for only about 2% more ( we priced just a bit less intentionally). Our plus is the lot size and wide open backyard, ready for a pool if necessary, as well as professionally landscape with curb appeal. Our siding is in much better condition. Appliance/furnace is top shelf plus a 17KW Generac, a must in our town with well and septic. I can assure you that we did not pick the listing price on a whim, since DW was not happy at all.
Don't tell me all those great things. Please tell the people who submitted an offer --- and keep your asking price the same.
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BrooklynInvest
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Re: Selling home - low ball negotiation

Post by BrooklynInvest »

As others have said, brokers maximize their compensation with a fast sale.

The market is a big fat unknown. The inspection I think is a requirement for a mortgage, or is in my neck of the woods. But what you do with any findings is up to you as long as the basic requirements of safety are met, no?

Me, I'd politely tell 'em thanks but we're not accepting a 10% cut and let them come back - assuming you're in no hurry and initial ask was in correct ballpark for house/neighborhood. If inspection says "X should be repaired, Y needs replacing in 2 years" then that's another part of the negotiation but trying to nix the inspection itself isn't something I'd do.

Good luck!
deltaneutral83
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Re: Selling home - low ball negotiation

Post by deltaneutral83 »

Kenkat wrote: Fri May 15, 2020 7:41 am In your jobs, do you not really care whether you do a good job or not because you’re going to get paid anyway? A realtor or financial advisor who’s attitude is “who cares, I’m getting my money” isn’t going to last long and I don’t think most think this way.
I am sincerely happy for anyone who has had pleasant experiences and forms the conclusions that you have over several decades to have adequate sample size(but I am skeptical to say the least). I have seen the exact opposite, in nearly every real estate transaction I have been a party to and many of my peers. There are inherent conflicts of interest and time is money in that space. I have noticed that most people put their bottom line before anyone else's, this website is a testimony to that in the financial world. With regards to realtors, taking anywhere under a 10% haircut on their commission for 1x the work IME is definitely worth it to them as opposed to working 2-3x to get 95+%. If salaried people could get 90% of their pay for 15 hours of work a week, would they?

There is also the hidden aspect in the financial world of what actually constitutes "doing a good job" especially when someone has been getting fleeced at 1.25% AUM and 5.75% front end loads and constant churning for 30 years but since they have a lot more money than they started with they are "happy with my guy, he does a good job."
Brokers with this attitude don’t last very long in the broker business.
Again, not my experience. In fact, business is booming.

I'd counter 10k above asking price. They mocked you and they should know.
This accomplishes nothing and is a waste of time.
This is very good advice. My belief is that the economy is going to get a lot worse before it gets better, and that should figure into your decision making.
Depends if OP is moving up or down in house. If he's moving up in house, he's a net buyer and this works out well for him. If he's a net seller and moving down in house, time is ticking if you believe that about the economy.
A number of years ago a family member saw a house outside of Atlanta that she was interested in but she believed the asking price was substantially higher than warranted. Over her realtor's objection, she put in an offer almost 30% below asking. The offer was declined with no counter-offer. Four months later, the seller reached out through their realtor to see if she was still interested and willing to purchase for the amount she offered. She was and she did.
I'm going to go out on a limb here :D and guess the time frame the offer was made was late 2007 early 2008 and then the seller came back hat in hand late 2008??
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Re: Selling home - low ball negotiation

Post by rkhusky »

I would wait for a second offer, if you can. Otherwise, counter with 2% off list.

Once offer and asking are within 1%, it’s time to close the deal. Some people let pride get in the way and demand to get the very best deal, arguing over a couple grand. Don’t cut off your nose to spite your face.

But it all depends on how motivated you are to sell.
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htdrag11
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Re: Selling home - low ball negotiation

Post by htdrag11 »

Well, we'll talk to our realtor after lunch, not in a hurry despite the lockdown.
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gr7070
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Re: Selling home - low ball negotiation

Post by gr7070 »

htdrag11 wrote: Fri May 15, 2020 10:42 am Well, we'll talk to our realtor after lunch, not in a hurry despite the lockdown.
An unmotivated seller is a bad thing, for all but the seller.

; )
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galawdawg
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Re: Selling home - low ball negotiation

Post by galawdawg »

deltaneutral83 wrote: Fri May 15, 2020 10:20 am
A number of years ago a family member saw a house outside of Atlanta that she was interested in but she believed the asking price was substantially higher than warranted. Over her realtor's objection, she put in an offer almost 30% below asking. The offer was declined with no counter-offer. Four months later, the seller reached out through their realtor to see if she was still interested and willing to purchase for the amount she offered. She was and she did.
I'm going to go out on a limb here :D and guess the time frame the offer was made was late 2007 early 2008 and then the seller came back hat in hand late 2008??
No, actually it was in the 1990's and the market was pretty stable at the time.
masonstone
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Re: Selling home - low ball negotiation

Post by masonstone »

89% of asking price is a very reasonable offer. I’m surprised you think that’s low-balling considering that’s the only offer you’ve gotten.
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Re: Selling home - low ball negotiation

Post by onourway »

An offer 10% under ask is hardly a low-ball or "mocking you". I'd expect that to be a reasonable starting point in many markets during normal times, and things have shifted considerably vs. where you started from. From our close monitoring of prices in our neighborhood over the years, I have no confidence realtors can even price a home within 10% of its real value anyhow.

As a few others have mentioned, the asking price is a big factor here as well - are you talking 10% off a $100k home or an $800k home? $10k off is hardly enough to do even a relatively minor repair.
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galawdawg
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Re: Selling home - low ball negotiation

Post by galawdawg »

livesoft wrote: Fri May 15, 2020 10:08 am Don't tell me all those great things. Please tell the people who submitted an offer --- and keep your asking price the same.
OP, just realize that by holding firm on your price, you may lose that potential buyer. My wife and I submitted a very solid offer on a house we were considering purchasing in late 2010 (during a very bad time for sellers in Georgia). The offer wasn't accepted but we were invited to submit another offer. I refuse to negotiate against myself so we walked away and kept looking. For us, it worked out very well as a few months later we purchased our current home (a 5,000+ sq ft custom home on acreage that went into foreclosure) for about 35% of what the appraised value had been when built in 2007 (and less than half of what our insurer estimated as the cost to rebuild). Two years later when we refinanced, it appraised for a little more than twice what we had paid. I was curious about the house we put the first offer on that was not accepted so I periodically checked. That house stayed on the market for almost another year before it finally sold for about 15% less than our offer price. So by refusing to negotiate, that seller lost substantially.

Without knowing the price range, if you are listed at only 2% below a very similar comp which had a recent major inside renovation, then an informed buyer who already has a contractor is likely to value your house at significantly less to account for costs of renovation (nice appliances, generator and landscaping notwithstanding). And if your buyers are interested in renovating, then the inventory available to them is going to be higher than for the buyer who limits their search to move-in ready updated homes.

So if you are serious about wanting to sell in the near future, I'd again recommend you consider a reasonable counter-offer (taking into account all of the positive aspects and advantages to your property). But before you respond, your realtor can always reach out to the realtor of the other interested parties and let them know that you received an offer (without disclosing the terms or amounts) and let them know that if they want an offer to be considered, they may wish to go ahead and submit one. If they are serious buyers and wish to purchase your house, they may also submit an offer.
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Re: Selling home - low ball negotiation

Post by Sandi_k »

adamthesmythe wrote: Thu May 14, 2020 9:16 pm
bluebirdy wrote: Thu May 14, 2020 8:01 pm Part of what you may want to negotiate/stipulate is the house is being sold as-is. So in exchange for you accepting a lower sale price, it would be a pass/fail inspection with no opportunity to ask for more money off because of what they find.
In my opinion, there is never a reason to do this, because the seller can always decline to do any repairs.
I disagree. If you leave the inspection clause in, without the "as-is, no more money off" clause added, they can come back with more discount requests. It also complicates the timetable: 10 days for inspection and release of the house; 10 days for inspection and release of the septic; 10 days for inspection and release of the outbuildings; 10 days for inspection and release of the electric and HVAC systems.

The big win in the "as-is, no more discounts" counter-offer is that it simplifies the process. The buyer is then motivated, if they still want to know more, to get ONLY the inspections that will mean they kill the deal, and not ALL of the inspections that might make them feel informed and secure about the new property.
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Re: Selling home - low ball negotiation

Post by hudson »

Everything's already been said....even this...
If I was selling a property, and I received a bid...any bid, I would treat it very seriously. Any messages that I sent would be upbeat and respectful.
You can't tell anything at all from an opening bid.

When you set a price on the house, you probably added a cushion so that you could negotiate down and still get what you wanted?
livesoft
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Re: Selling home - low ball negotiation

Post by livesoft »

galawdawg wrote: Fri May 15, 2020 11:30 am
livesoft wrote: Fri May 15, 2020 10:08 am Don't tell me all those great things. Please tell the people who submitted an offer --- and keep your asking price the same.
OP, just realize that by holding firm on your price, you may lose that potential buyer. ...
Great story!
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Re: Selling home - low ball negotiation

Post by Northern Flicker »

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Re: Selling home - low ball negotiation

Post by masonstone »

galawdawg wrote: Fri May 15, 2020 11:30 am
livesoft wrote: Fri May 15, 2020 10:08 am Don't tell me all those great things. Please tell the people who submitted an offer --- and keep your asking price the same.
OP, just realize that by holding firm on your price, you may lose that potential buyer. My wife and I submitted a very solid offer on a house we were considering purchasing in late 2010 (during a very bad time for sellers in Georgia). The offer wasn't accepted but we were invited to submit another offer. I refuse to negotiate against myself so we walked away and kept looking. For us, it worked out very well as a few months later we purchased our current home (a 5,000+ sq ft custom home on acreage that went into foreclosure) for about 35% of what the appraised value had been when built in 2007 (and less than half of what our insurer estimated as the cost to rebuild). Two years later when we refinanced, it appraised for a little more than twice what we had paid. I was curious about the house we put the first offer on that was not accepted so I periodically checked. That house stayed on the market for almost another year before it finally sold for about 15% less than our offer price. So by refusing to negotiate, that seller lost substantially.

Without knowing the price range, if you are listed at only 2% below a very similar comp which had a recent major inside renovation, then an informed buyer who already has a contractor is likely to value your house at significantly less to account for costs of renovation (nice appliances, generator and landscaping notwithstanding). And if your buyers are interested in renovating, then the inventory available to them is going to be higher than for the buyer who limits their search to move-in ready updated homes.

So if you are serious about wanting to sell in the near future, I'd again recommend you consider a reasonable counter-offer (taking into account all of the positive aspects and advantages to your property). But before you respond, your realtor can always reach out to the realtor of the other interested parties and let them know that you received an offer (without disclosing the terms or amounts) and let them know that if they want an offer to be considered, they may wish to go ahead and submit one. If they are serious buyers and wish to purchase your house, they may also submit an offer.
How can one find a property in foreclosure?
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galawdawg
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Re: Selling home - low ball negotiation

Post by galawdawg »

I found ours on the Fannie Mae REO homes website, www.homepath.com.
surveyor
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Re: Selling home - low ball negotiation

Post by surveyor »

masonstone wrote: Fri May 15, 2020 12:05 pm

How can one find a property in foreclosure?
Wait about 6 months.
The Broz
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Re: Selling home - low ball negotiation

Post by The Broz »

Nowizard wrote: Fri May 15, 2020 8:06 am Make your best offer and include any limitations to inspection repairs you consider reasonable. Alternatively, in our area, many have a handyman inspect and make repairs before listing. Common things are stuck windows, doors that do not close completely, drywall cracks and plumbing/electrical/roofing questions.

Tim
This is good advice. Make your best offer and if they don't take it, they don't take it. The house is only worth what someone is willing to pay for it, and there is nothing that says that you have to take any offer. But you need to be willing to let them walk away. None of us can speak to how motivated you are to sell. In fairness - during hot sellers' markets, sellers take advantage of the situation and are within their rights to do so. It is only fair that during rare instances of buyers' markets, that those buyers do the same.
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Re: Selling home - low ball negotiation

Post by Beehave »

Just a general suggestion.

Let the potential buyers know you want them to have this house for their growing family and let them know you want to work with them to the best of your ability and needs to come up with a solution that will provide them with the excellent schools and neighborhood (I assume that's what the buyers perceive if they are with child) and both they and you should ask the RE brokers involved to help get this done.

I'd try to figure out how to get everyone motivated, sympathetic with each other, and trying to get it done. Worst case, if they are playing hardball and want to offer low and then inspect and go lower, you can always just say "no." The better case is you come to a compromise everyone actually feels good about.

Best wishes.
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Re: Selling home - low ball negotiation

Post by sergeant »

Momus wrote: Fri May 15, 2020 12:41 am I'd counter 10k above asking price. They mocked you and they should know.
Yikes! I hardly think their offer was a shot at the OP. I've bought three homes, everyone below asking. I've made offers that were rejected. It was never personal, just business.

OP, the offer is a beginning negotiation. Meet somewhere in the middle.
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ballons
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Re: Selling home - low ball negotiation

Post by ballons »

Housing bubble:
https://fred.stlouisfed.org/series/CSUSHPINSA

Find for your area:
https://fred.stlouisfed.org/categories/32261

https://www.zillow.com/research/prices- ... rus-26975/

If you trust zillow, they are already predicting 2-3% drops nationwide. Local could be better or worse. Their worse case scenario prediction is a few years of declines without saying when a recovery will happen. In 2 months, 10% off may look great. 36+ Million have lost their job at the peak of a housing bubble.

You said you are also buying, so there is a good chance you will ask the same i.e. "They got 5%, we should get 5%."
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Re: Selling home - low ball negotiation

Post by HomeStretch »

If both interested parties came back with their contractors for a 2nd look, that says to me that your home needs substantial updating (more than the couple items you noted) to modernize or customize the house for the buyer.

Large renovations come with risk. You don’t know what you’re going to find when you start opening walls, checking the plumbing, electrical, etc. I rarely hear someone say they spent less than budget on a renovation as something unexpected structural or mechanical seems to come up and it’s usually not cheap to repair or replace.

So it doesn’t surprise me that Buyer 1 came back 11% under your list price to cover the cost of surprises they may encounter during the renovation. I’d wait a bit to respond to see if Buyer 2 puts in a better offer. I personally think the market will soften further in 2020. If you share that belief and if you need to move, consider negotiating the best offer possible and accept it.
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Re: Selling home - low ball negotiation

Post by harrychan »

Momus wrote: Fri May 15, 2020 12:41 am I'd counter 10k above asking price. They mocked you and they should know.
This approach to home selling makes zero sense. The home has been on the market for 2 months in a pandemic. Take emotions out of it. There is no disclosure to not offer less. This is how much they offer. If OP isn't happy with it then counter. Raising the price is immature and disingenuous. If you do this, word gets around the agent community and you will even get less offers.
This is not legal or certified financial advice but you know that already.
rich126
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Re: Selling home - low ball negotiation

Post by rich126 »

Every negotiation is different. Some have fixed numbers, some leave deals based on principle, etc. Last and final offer can often just be another tactic. I’ve said no and they upped the offer. Often finding a home is a pain and once someone does they will eventually agree to a price.

There are some bottom feeders that will just offer a low price to see if someone is desperate to sell.

Other variables such as whether you have to sell asap, etc. will cause people to decide things differently.
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htdrag11
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Re: Selling home - low ball negotiation

Post by htdrag11 »

OP here. More updates after talking with our realtor.

Our house is over $500k. The prospective buyers will do a major remodeling of changing the roof line and updating the kitchen (surprise?). They are talking about $150k which is reasonable considering the effort and size.

Sadly, the other couple did not make a bid at all after number crunching, though their parents lived in the next street from us.

Our realtor had not talked us into lowering our prices yet during the pandemic which probably would have an effect, despite some rosy prediction that more people are looking to move out of NYC. We've a dilemma since selling our house meant really looking hard for the next one (or rent) with a tight supply in our county. Renting in a smaller apartment is no fun during the lockdown, coming from a spacious home and yard.

The realtor will let us know what is "reasonable' after she did her competitive analysis, post Covid. Meanwhile, the other realtor had been trying to get a reply from her in the last 18 hours, more than once.
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Re: Selling home - low ball negotiation

Post by delamer »

htdrag11 wrote: Fri May 15, 2020 3:38 pm OP here. More updates after talking with our realtor.

Our house is over $500k. The prospective buyers will do a major remodeling of changing the roof line and updating the kitchen (surprise?). They are talking about $150k which is reasonable considering the effort and size.

Sadly, the other couple did not make a bid at all after number crunching, though their parents lived in the next street from us.

Our realtor had not talked us into lowering our prices yet during the pandemic which probably would have an effect, despite some rosy prediction that more people are looking to move out of NYC. We've a dilemma since selling our house meant really looking hard for the next one (or rent) with a tight supply in our county. Renting in a smaller apartment is no fun during the lockdown, coming from a spacious home and yard.

The realtor will let us know what is "reasonable' after she did her competitive analysis, post Covid. Meanwhile, the other realtor had been trying to get a reply from her in the last 18 hours, more than once.
It seems that you really need to figure out the pros and cons of whether this is the best time to move and make your pricing decisions accordingly. Meaning that maybe a good offer is enough to deal with finding a new place to live while a mediocre offer won’t cut it.

Not to mention determining how you’d feel if you end up in your current house for 2 more years if it takes that long for the pandemic to resolve.

We’ll be sellers too within the next few weeks, although our situation is different because we know we’ll be moving to our retirement house regardless. But we’ll have to decide on our lowest acceptable price, with renting out the house as a backup.

Good luck in these uncertain times.
nydoc
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Re: Selling home - low ball negotiation

Post by nydoc »

We had an accepted offer for 17% less than asking price. However, there is too much uncertainty right now especially in NYC and surround suburbs so we are not moving forward with the purchase.
Carl53
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Re: Selling home - low ball negotiation

Post by Carl53 »

When we bought our current home 30 years ago, we bid nearly 30% below asking price and were not unexpectedly rejected. Not that the home was not worth more than we bid but it exceeded substantially what I was willing to afford and it had a pool, which I did not want. Fast forward a few months, we received a call from the realtor asking that we reconsider our bid if we could come up. Apparently, the owners company was willing to kick in some. We came up some (under pressure from kids and spouse that wanted the pool), about 79% of asking price and it was accepted. Sellers were not exactly pleasant come closing, but they moved on. We are still using the pool.
ballons
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Re: Selling home - low ball negotiation

Post by ballons »

htdrag11 wrote: Fri May 15, 2020 3:38 pm Our realtor had not talked us into lowering our prices yet during the pandemic which probably would have an effect, despite some rosy prediction that more people are looking to move out of NYC. We've a dilemma since selling our house meant really looking hard for the next one (or rent) with a tight supply in our county. Renting in a smaller apartment is no fun during the lockdown, coming from a spacious home and yard.

The realtor will let us know what is "reasonable' after she did her competitive analysis, post Covid. Meanwhile, the other realtor had been trying to get a reply from her in the last 18 hours, more than once.

Home sellers drop prices as coronavirus chokes economy

https://www.bankrate.com/real-estate/co ... st-prices/

In general, price cuts reflect modest pessimism rather than outright panic. “So far, you’re not seeing huge discounts,” Weiss says.

Not surprisingly, New York, an epicenter of the pandemic, had the highest percentage of new listings with discounted asking prices. Some 34 percent of properties that went on the market there were priced below their February values, Weiss says.

Other metro areas with high levels of discounts included Baltimore, where 31 percent of new listings were marked down, and Los Angeles, where 30 percent of homes for sale were discounted.
"Reasonable" may keep falling.
international001
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Re: Selling home - low ball negotiation

Post by international001 »

Is this spread similar to other assets, a sign of iliquidity?
i.e. if you see houses take longer to sell (1 year vs 1 month, for instace), means that you can offer a lower price (-10% vs -1%)

Anybody has studied the relationship? It may save some guessing
New Providence
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Re: Selling home - low ball negotiation

Post by New Providence »

Chip wrote: Fri May 15, 2020 9:51 am
Kenkat wrote: Fri May 15, 2020 7:56 am
ScubaHogg wrote: Fri May 15, 2020 7:54 am The broker (notice I didn’t say “your broker”) isn’t incentivized to get you the best deal. They are incentivized to sell the house quickly. I wouldn’t rely on them at all for your offer/counter off strategy.
Brokers with this attitude don’t last very long in the broker business.
That's certainly not been my experience buying and selling several homes using brokers with many years of experience. They always want to get the deal done and will use whatever arguments they think will move the deal towards an agreement. Of course they word these arguments carefully so as to not tick off their client, but they do make them. I've gone against their negotiation advice in the past and came out better off. I finally quit asking for it.

People often pick the brokers who are most successful at selling houses. Those successful brokers don't sell lots of houses by minimizing prices that their buyer clients pay or maximizing prices that their seller clients pay.
Many people here have misconceptions about the role of a broker. A broker helps you find a buyer for your house or a house for you to buy; that's it. A broker is not your financial or legal advisor. They can give you an opinion, but (whether you are buying or selling) it is your money, your decision. And the sooner you sell or buy, the sooner they get paid.
rkhusky
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Re: Selling home - low ball negotiation

Post by rkhusky »

gr7070 wrote: Fri May 15, 2020 10:47 am
htdrag11 wrote: Fri May 15, 2020 10:42 am Well, we'll talk to our realtor after lunch, not in a hurry despite the lockdown.
An unmotivated seller is a bad thing, for all but the seller.

; )
Unless this is the only offer the seller gets and house prices drop 20% in the next 6 months.
Golf maniac
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Re: Selling home - low ball negotiation

Post by Golf maniac »

Ultimately you are going to have to make a decision on if and what to counter. The broker can help by giving you market information. What is the average sales price to list price for your market? What has occurred in your market over the past 2 months? Would you be willing to reduce price if the buyers accept “as is”? Do you and your realtor feel the market will improve if you hold on for a year? Good luck.
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snackdog
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Re: Selling home - low ball negotiation

Post by snackdog »

I would consider just accepting in this market.
cmr79
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Re: Selling home - low ball negotiation

Post by cmr79 »

And yet they do. I think it was Malcolm Gladwell who compiled some data that agents leave their own houses on the market longer and sell for more, controlling for everything else.
This was from Freakonomics...similar style of writing, of course.
bltn
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Re: Selling home - low ball negotiation

Post by bltn »

mrspock wrote: Thu May 14, 2020 8:31 pm
Kenkat wrote: Thu May 14, 2020 8:15 pm
fabdog wrote: Thu May 14, 2020 8:03 pm Your broker should be able to recommend a counter offer strategy. What do they say? They, after all, are working for you, and you've hired them expressly for their expertise in selling a house

Mike
Agree, this is what you are paying your realtor for.
Putting food on the table is contingent on you accepting the offer, and the amount of comp they get isn’t sig. different either way. What do you think they will say? :)

It’s the same problem as investment advisors, they are heavily incentivized in subtle and not so subtle ways to work against their clients.
This is what I was thinking.
If I really wanted to make the sale, I would meet the buyer half way. I might not go lower than that if I didn t have a planned downsize available.
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gr7070
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Re: Selling home - low ball negotiation

Post by gr7070 »

rkhusky wrote: Fri May 15, 2020 7:09 pm
gr7070 wrote: Fri May 15, 2020 10:47 am
htdrag11 wrote: Fri May 15, 2020 10:42 am Well, we'll talk to our realtor after lunch, not in a hurry despite the lockdown.
An unmotivated seller is a bad thing, for all but the seller.

; )
Unless this is the only offer the seller gets and house prices drop 20% in the next 6 months.
Understood, and I'm not disagreeing with your greater point; however, the lack of motivation certainly doesn't preclude the seller from making a good decision to accept ab good offer.

Just makes them far less likely to accept a poor offer.

I suspect we're both in agreement on each end of this spectrum.
Patzer
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Re: Selling home - low ball negotiation

Post by Patzer »

I bought my house in 2010.
I paid 92% of list, which was 80% of what comps had sold for in 2007-2008.

The offer chain went:
Me: 92% of list and they pay closing costs. (An hour after touring)
Them: 95% of list and don't pay closing costs. (3-4 hours later)
Me: 92% of list and they pay closing costs. (Immediate counter)
Them: 95% of list and pay 2/3rds of closing costs. (A full day later)
Me: 92% of list and they pay 2/3rds of closing costs. (Immediate counter)
Them: Accept. (30 minutes later)

Inspections turned up about 2% of list in repairs, and I settled for them paying for 1.25% of list of the repairs, and I paid for the rest.

89% might not feel like a fair deal right now, but what will houses be selling for in 6-12-18 months when the impact of the current situation starts to catch up to home prices?
I would try to work with them, and counter with something like 97% and a clause that you will only make repairs if there is a major issue (define it as something like a problem of value over 3% of list) and see how they react. This prevents them from hitting you with 15 different things that add up to a decent sum, but also gives them comfort that they aren't buying a house with a major problem like a damaged foundation.

I expect they will counter lower, but you don't know until you ask, and maybe their counter will be something you feel good about.
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htdrag11
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Re: Selling home - low ball negotiation

Post by htdrag11 »

bltn wrote: Fri May 15, 2020 7:49 pm This is what I was thinking.
If I really wanted to make the sale, I would meet the buyer half way. I might not go lower than that if I didn t have a planned downsize available.
You read my mind. Despite all the doom and gloom, there are very few houses for sale in our vicinity. Another interesting aspect our broker told us was the all the million plus homes are moving, due to influx of NYC buyers but we're in a "middle class" neighborhood.

Will make a decision today.
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htdrag11
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Re: Selling home - low ball negotiation

Post by htdrag11 »

Beehave wrote: Fri May 15, 2020 12:30 pm Just a general suggestion.

Let the potential buyers know you want them to have this house for their growing family and let them know you want to work with them to the best of your ability and needs to come up with a solution that will provide them with the excellent schools and neighborhood (I assume that's what the buyers perceive if they are with child) and both they and you should ask the RE brokers involved to help get this done.

I'd try to figure out how to get everyone motivated, sympathetic with each other, and trying to get it done. Worst case, if they are playing hardball and want to offer low and then inspect and go lower, you can always just say "no." The better case is you come to a compromise everyone actually feels good about.

Best wishes.
Sound advice. Thanks.
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8foot7
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Re: Selling home - low ball negotiation

Post by 8foot7 »

I light have missed it, but why do you want to move? Clarifying what your objective is in the grander scheme can help you figure out what your number is. Is the sale of this home unlocking the possibility of something else?
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jfn111
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Re: Selling home - low ball negotiation

Post by jfn111 »

We have been selling a lot of AB&B properties the last couple of months for our investor clients. We always require an AS-IS addendum. The AS-IS addendum doesn't mean the buyer can't have an inspection and ask for repairs. My clients want the addendum so they aren't getting phone calls 6 months after the sale because something broke.
As far as the offer. If I'm representing buyers and the house has been sitting on the market for over 2 weeks we will always come in low with our starting point. Part of this is to see how motivated the seller is. I always tell my buyers that one of three things will happen- they accept, reject or counter. I have only had one seller who outright refused to negotiate. We moved on.
TallBoy29er
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Re: Selling home - low ball negotiation

Post by TallBoy29er »

Momus wrote: Fri May 15, 2020 12:41 am I'd counter 10k above asking price. They mocked you and they should know.
So Op has a potential buyer, and you want to make a statement based on ill-found principal and throw away a possible deal. Sheesh.
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