Lowball offer on a home

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Jags4186
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Lowball offer on a home

Post by Jags4186 » Mon Jan 08, 2018 5:21 pm

Hello all,

My wife and I saw a 3br/1.5ba house in a spectacular neighborhood the other day that we liked and are interested in making an offer. It is currently listed for $529,000 and all of the comps in the area have sold between $480k and $530k in the last year. A house two doors down sold for $525,000.

The catch is this house needs a ton of work. The owners bought the house for $460k in 2004 and from the looks of it it hasn’t been touched since. It conservatively needs two new bathrooms, a new kitchen (plus knock down wall to dining room to make it one big room) and an old sunroom needs to be minimally winterized, although we would likely just blow out the back and to turn the sunroom into a proper den/expand the kitchen. Also it would need central air installed (ductwork is there, but new furnace and compressor would need to be bought) a new drop ceiling in the basement (current ceiling looks to be original from the 50s with missing and warped tiles), floors sanded, every interior door would need to be replaced. Currently has shingle siding which we would likely want to replace with vinyl. It has a 12 year old roof and looks like the original windows. I figure it would take $100k to bring this up to the equivalent house 2 doors down—at least from the pictures of the house two doors down.

How much would you discount your offer? The full $100k of the two door house next door? Offer $425k? Would you offer even less to compesate for actually having to do the work? Or would you simply pass on this home? It is a hot hot market but we’re not pressured to buy at the moment other than the fact that we want to buy a home.

We won’t really be upset if the buyer rejects so I’m not worried about him just ignoring us, but I am curious what other would do?
Last edited by Jags4186 on Mon Jan 08, 2018 5:31 pm, edited 1 time in total.

livesoft
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Re: Lowball offer on a home

Post by livesoft » Mon Jan 08, 2018 5:24 pm

When you make the offer, be sure to describe all the work you are going to do on the house.

How much work did the house 2 doors down need?
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Jags4186
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Re: Lowball offer on a home

Post by Jags4186 » Mon Jan 08, 2018 5:29 pm

livesoft wrote:
Mon Jan 08, 2018 5:24 pm
When you make the offer, be sure to describe all the work you are going to do on the house.

How much work did the house 2 doors down need?
We didn’t see the house two doors down as it sold before we really started looking, but from the pictures it looks to be in great shape. It at minimum had new bathrooms and renovated kitchen. It also had vinyl siding. Same # of bedrooms and bathrooms.

livesoft
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Re: Lowball offer on a home

Post by livesoft » Mon Jan 08, 2018 5:38 pm

I'd have my realtor find out about that home since the sellers of house for sale must know ALL about it. It behooves YOU to know ALL about it, too.
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Pajamas
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Re: Lowball offer on a home

Post by Pajamas » Mon Jan 08, 2018 5:39 pm

Jags4186 wrote:
Mon Jan 08, 2018 5:21 pm

Would you offer even less to compesate for actually having to do the work? Or would you simply pass on this home?
One or the other of these.

First thing would be to decide if you want to deal with the needed work. Many people would want to do a lot of that stuff anyway and might as well not have to pay for someone else's cheapo renovation with builder-quality fixtures. Someone handy might be looking for a bargain expecting to create sweat equity.

If you are okay with buying it, then your offer should reflect not only the estimated cost of renovations but an additional amount for the almost-inevitable surprises and cost overruns. I would ask for a very detailed inspection and research costs. There is some risk there. Sounds like you pulled the $100k number out of the air, too! :D

2comma
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Re: Lowball offer on a home

Post by 2comma » Mon Jan 08, 2018 5:47 pm

If it really needs all that work it sounds like they have mispriced it. Has it been on the market long? I've seen, and I know I'm generalizing here, old couples that are out of touch with reality (they love their house) and in no hurry to sell. I guess sometimes they find a sucker but I'd guess they eventually figure out it's overpriced or just decide they aren't sitting on the goldmine they think they are and just decide to take it off the market.

Even though I'm a car guy I've always felt like I had a better handle on what a house will sell for (assuming you can find good comps) than what a car will sell for.
If I am stupid I will pay.

Jags4186
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Re: Lowball offer on a home

Post by Jags4186 » Mon Jan 08, 2018 6:07 pm

2comma wrote:
Mon Jan 08, 2018 5:47 pm
If it really needs all that work it sounds like they have mispriced it. Has it been on the market long? I've seen, and I know I'm generalizing here, old couples that are out of touch with reality (they love their house) and in no hurry to sell. I guess sometimes they find a sucker but I'd guess they eventually figure out it's overpriced or just decide they aren't sitting on the goldmine they think they are and just decide to take it off the market.

Even though I'm a car guy I've always felt like I had a better handle on what a house will sell for (assuming you can find good comps) than what a car will sell for.
Couple moving to California for a job. They are looking to sell. Owner has a real estate license so I’m sure he thinks he knows everything.

I’ve seen the house on and off on Zillow for a few months. It looks to me they’re ready to get out of there. There’s a bed, 2 couches and a dining room table. That’s about all this in there by way of furniture/possessions.

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Pajamas
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Re: Lowball offer on a home

Post by Pajamas » Mon Jan 08, 2018 6:09 pm

Jags4186 wrote:
Mon Jan 08, 2018 6:07 pm
. Owner has a real estate license so I’m sure he thinks he knows everything.

I’ve seen the house on and off on Zillow for a few months. It looks to me they’re ready to get out of there. There’s a bed, 2 couches and a dining room table. That’s about all this in there by way of furniture/possessions.
I would either avoid that house or really lowball it, then.

cherijoh
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Re: Lowball offer on a home

Post by cherijoh » Mon Jan 08, 2018 6:11 pm

Jags4186 wrote:
Mon Jan 08, 2018 5:21 pm
Hello all,

My wife and I saw a 3br/1.5ba house in a spectacular neighborhood the other day that we liked and are interested in making an offer. It is currently listed for $529,000 and all of the comps in the area have sold between $480k and $530k in the last year. A house two doors down sold for $525,000.

The catch is this house needs a ton of work. The owners bought the house for $460k in 2004 and from the looks of it it hasn’t been touched since. It conservatively needs two new bathrooms, a new kitchen (plus knock down wall to dining room to make it one big room) and an old sunroom needs to be minimally winterized, although we would likely just blow out the back and to turn the sunroom into a proper den/expand the kitchen. Also it would need central air installed (ductwork is there, but new furnace and compressor would need to be bought) a new drop ceiling in the basement (current ceiling looks to be original from the 50s with missing and warped tiles), floors sanded, every interior door would need to be replaced. Currently has shingle siding which we would likely want to replace with vinyl. It has a 12 year old roof and looks like the original windows. I figure it would take $100k to bring this up to the equivalent house 2 doors down—at least from the pictures of the house two doors down.

How much would you discount your offer? The full $100k of the two door house next door? Offer $425k? Would you offer even less to compesate for actually having to do the work? Or would you simply pass on this home? It is a hot hot market but we’re not pressured to buy at the moment other than the fact that we want to buy a home.

We won’t really be upset if the buyer rejects so I’m not worried about him just ignoring us, but I am curious what other would do?
Was there anything about the house you liked besides the neighborhood in which it was located? After reading about all the issues, I reread your first paragraph and wasn't sure if the "... that we liked..." applied to the house or just to the neighborhood. :wink:

That is way more work than I'd be willing to take on. Plus it sounds like a lot of work would need to be done to get it move-in ready - unless you don't mind living in a construction zone. Finally, I wouldn't want a house with only 1.5 baths.

Carefreeap
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Re: Lowball offer on a home

Post by Carefreeap » Mon Jan 08, 2018 6:17 pm

Jags4186 wrote:
Mon Jan 08, 2018 6:07 pm
2comma wrote:
Mon Jan 08, 2018 5:47 pm
If it really needs all that work it sounds like they have mispriced it. Has it been on the market long? I've seen, and I know I'm generalizing here, old couples that are out of touch with reality (they love their house) and in no hurry to sell. I guess sometimes they find a sucker but I'd guess they eventually figure out it's overpriced or just decide they aren't sitting on the goldmine they think they are and just decide to take it off the market.

Even though I'm a car guy I've always felt like I had a better handle on what a house will sell for (assuming you can find good comps) than what a car will sell for.
Couple moving to California for a job. They are looking to sell. Owner has a real estate license so I’m sure he thinks he knows everything.

I’ve seen the house on and off on Zillow for a few months. It looks to me they’re ready to get out of there. There’s a bed, 2 couches and a dining room table. That’s about all this in there by way of furniture/possessions.
You can try but I wouldn't hold my breath. The house was probably bought near the peak of the last market and are trying to get back what they paid + new sales costs. Add the extra whammy that if they are moving anywhere in Coastal CA they need every penny out of the house in order to pay 2x to buy the same house.

adamthesmythe
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Re: Lowball offer on a home

Post by adamthesmythe » Mon Jan 08, 2018 6:25 pm

> I figure it would take $100k to bring this up to the equivalent house 2 doors down

Then you should buy the house 2 doors down, right?

My guess is...you make the lowball offer...they reject it angrily...and you get to move on to find something closer to your desires.

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Pajamas
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Re: Lowball offer on a home

Post by Pajamas » Mon Jan 08, 2018 6:31 pm

adamthesmythe wrote:
Mon Jan 08, 2018 6:25 pm

My guess is...you make the lowball offer...they reject it angrily...and you get to move on to find something closer to your desires.
Sounds about right, so you could load your offer with multiple ridiculous contingencies, just because.

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Re: Lowball offer on a home

Post by Jack FFR1846 » Mon Jan 08, 2018 6:41 pm

Pay a contractor to come tour the house for a couple hundred dollars and then ball park the cost to do the improvements you would do. This at least gives you an educated guess. Then subtract that from what the "house down the street" sold for and present your offer. You could certainly include your reasoning for the offer. Contrary to what a real estate agent might tell you, you absolutely CAN make an offer much lower than the asking price. I bought my house when it listed for $385k for $226.5k. When people are unreasonable with their asking price, nobody bids. Well.....except for me. Maybe you too?
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Jags4186
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Re: Lowball offer on a home

Post by Jags4186 » Mon Jan 08, 2018 7:01 pm

cherijoh wrote:
Mon Jan 08, 2018 6:11 pm
Was there anything about the house you liked besides the neighborhood in which it was located? After reading about all the issues, I reread your first paragraph and wasn't sure if the "... that we liked..." applied to the house or just to the neighborhood. :wink:

That is way more work than I'd be willing to take on. Plus it sounds like a lot of work would need to be done to get it move-in ready - unless you don't mind living in a construction zone. Finally, I wouldn't want a house with only 1.5 baths.
What we liked:

1) Town/Neighborhood— close to both sets of parents, great school system, very desirable town, 2 blocks to extremely nice park
2) Style/layout — center hall colonial, square rooms, garage not “underneath” the house, it’s off to the side
3) Large lot — 60x140
4) Taxes — relatively low compared to other similar homes (just under $10k)
5) Price — In our price range of $400k-$550k. There simply aren’t that many homes for sale and very few come on the market. People suggesting that they “wouldn’t buy a 1.5 ba” house should realize that the renovated 4br/2.5ba homes where we are looking push you into the $600k+ range and you could be sitting on $14k+ taxes.
6) Wife is interior designer but works in commercial space. Would be “fun” for her to do the design work on a home.

I am not concerned about making the seller angry. Like I really care what a seller thinks of me? It’s simply a transaction, either it makes sense for both of us or it doesn’t.

malabargold
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Re: Lowball offer on a home

Post by malabargold » Mon Jan 08, 2018 7:11 pm

The owners likely don’t care what you plan to spend on it and will be offended by lowball, how it usually goes.

Lexi
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Re: Lowball offer on a home

Post by Lexi » Mon Jan 08, 2018 7:12 pm

You need to sort out what the house really “needs” from your “wants”. Then take a good look at the comps. Your list seems like a combination of both. The true needs should be factored into the price, but you should not expect to be reimbursed for your wants.

Jags4186
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Re: Lowball offer on a home

Post by Jags4186 » Mon Jan 08, 2018 7:29 pm

malabargold wrote:
Mon Jan 08, 2018 7:11 pm
The owners likely don’t care what you plan to spend on it and will be offended by lowball, how it usually goes.
Don’t care if owner is offended.
Lexi wrote:
Mon Jan 08, 2018 7:12 pm
You need to sort out what the house really “needs” from your “wants”. Then take a good look at the comps. Your list seems like a combination of both. The true needs should be factored into the price, but you should not expect to be reimbursed for your wants.
Correct that is true. However, regardless of what we need vs. what we want I am comparing it to what other houses in the neighborhood have and the prices they’ve sold for. They have renovated kitchens. They have their back “sun room” winterized into a real 4 season den. They have central air. They have vinyl siding. They have good finishings. This house doesn’t have that so I need to discount it to make it truly comparable.

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MnyGrl
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Re: Lowball offer on a home

Post by MnyGrl » Mon Jan 08, 2018 7:37 pm

malabargold wrote:
Mon Jan 08, 2018 7:11 pm
The owners likely don’t care what you plan to spend on it and will be offended by lowball, how it usually goes.
+1.

If it is a desirable neighborhood and the owner is a real estate agent they likely will get close to what they want. And the spring market starts in a month....

mortfree
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Re: Lowball offer on a home

Post by mortfree » Mon Jan 08, 2018 7:42 pm

Price is just one component of the offer.

Will you have a contingency to sell your house?

Will you have contingencies for home inspections, etc.

Can you settle quickly?

Cash offer?

renue74
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Re: Lowball offer on a home

Post by renue74 » Mon Jan 08, 2018 8:11 pm

MnyGrl wrote:
Mon Jan 08, 2018 7:37 pm
malabargold wrote:
Mon Jan 08, 2018 7:11 pm
The owners likely don’t care what you plan to spend on it and will be offended by lowball, how it usually goes.
+1.

If it is a desirable neighborhood and the owner is a real estate agent they likely will get close to what they want. And the spring market starts in a month....
+1 If you lowball anything, owners will be offended. Not the same case, but I have rental property and have been selling them off in 2017. Sold 3 properties. Every sell, there's always a young buck who low balls. I call him out on it and indicate he's $xxxxx light on his bid and good luck in the future. I don't even counter. These people have seen too many House Hunters, Flip or Flops, or Fixer Uppers. Most people who sell through legitimate MLS listings are not hard up, desperate.

white_water
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Re: Lowball offer on a home

Post by white_water » Mon Jan 08, 2018 8:16 pm

Don't know the particulars of your location but in my area the improvements you listed would be well over $100K.
Remodels often go over budget in my experience, esp. in older homes.

Jags4186
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Re: Lowball offer on a home

Post by Jags4186 » Mon Jan 08, 2018 8:27 pm

Perhaps I shouldn’t use the term “lowball”. I should retitle the article “making realistic offer on overpriced home”.

Just some information:

House sold for $335,000 in 2001. Sold for $460,000 in 2004. Was listed for sale on 11/17 for $569,000. It was then dropped to $519,000. Taken off MLS then relisted a few days ago at $529,000.

Hope this gives a little clarity.

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MnyGrl
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Re: Lowball offer on a home

Post by MnyGrl » Mon Jan 08, 2018 8:34 pm

Jags4186 wrote:
Mon Jan 08, 2018 8:27 pm
Perhaps I shouldn’t use the term “lowball”. I should retitle the article “making realistic offer on overpriced home”.

Just some information:

House sold for $335,000 in 2001. Sold for $460,000 in 2004. Was listed for sale on 11/17 for $569,000. It was then dropped to $519,000. Taken off MLS then relisted a few days ago at $529,000.

Hope this gives a little clarity.
100K under their asking price - and even less than they originally paid for the place - in a desirable neighborhood is probably not realistic unless the place is gutted from a house fire or they are desperate. I would forget this house and find something you can afford.

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whodidntante
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Re: Lowball offer on a home

Post by whodidntante » Mon Jan 08, 2018 8:35 pm

I've made lowball offers before but it never seems to work out at least on a listed house. They've priced it that high because they reckon it's worth a lot. I doubt you'll change their mind very much.

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Re: Lowball offer on a home

Post by noco-hawkeye » Mon Jan 08, 2018 8:40 pm

I agree for the lowball in your position.

They may very well be offended and end up taking a much higher offer. That's not your problem or concern. Offer what it is worth to you, and you seem to have a reasonable handle that this much work will not be cheap, easy, or quick.

If someone else wants to pay retail, and then sink another 125k into refurbs - that's their problem, not yours.

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2015
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Re: Lowball offer on a home

Post by 2015 » Mon Jan 08, 2018 8:40 pm

Everything is location specific. I'm in such a highly sought after neighborhood that I don't intend to waste my time even responding to offers below asking price. I have realtors who somehow get one of my email addresses and then ask me at what price I would be willing to sell. At times, I'm really, really tempted to respond...

Agggm
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Re: Lowball offer on a home

Post by Agggm » Mon Jan 08, 2018 8:41 pm

Jags4186 wrote:
Mon Jan 08, 2018 5:21 pm
Hello all,

My wife and I saw a 3br/1.5ba house in a spectacular neighborhood the other day that we liked and are interested in making an offer. It is currently listed for $529,000 and all of the comps in the area have sold between $480k and $530k in the last year. A house two doors down sold for $525,000.

The catch is this house needs a ton of work. The owners bought the house for $460k in 2004 and from the looks of it it hasn’t been touched since. It conservatively needs two new bathrooms, a new kitchen (plus knock down wall to dining room to make it one big room) and an old sunroom needs to be minimally winterized, although we would likely just blow out the back and to turn the sunroom into a proper den/expand the kitchen. Also it would need central air installed (ductwork is there, but new furnace and compressor would need to be bought) a new drop ceiling in the basement (current ceiling looks to be original from the 50s with missing and warped tiles), floors sanded, every interior door would need to be replaced. Currently has shingle siding which we would likely want to replace with vinyl. It has a 12 year old roof and looks like the original windows. I figure it would take $100k to bring this up to the equivalent house 2 doors down—at least from the pictures of the house two doors down.

How much would you discount your offer? The full $100k of the two door house next door? Offer $425k? Would you offer even less to compesate for actually having to do the work? Or would you simply pass on this home? It is a hot hot market but we’re not pressured to buy at the moment other than the fact that we want to buy a home.

We won’t really be upset if the buyer rejects so I’m not worried about him just ignoring us, but I am curious what other would do?
Jaja. Just make a serious offer if you love the place.

staythecourse
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Re: Lowball offer on a home

Post by staythecourse » Mon Jan 08, 2018 8:42 pm

A house is worth as much as the next buyer is willing to pay. So it doesn't matter how much work you think it needs only matters what the seller thinks they can get for said property. I would offer what you think is reasonable based on the work that would be needed to remodel the way you want. For example if house next to it sold for x amount I would offer x- how much it would cost to do the work you want.

Great and bad of speculative investments like primary housing is there is no normal.

Good luck.
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HueyLD
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Re: Lowball offer on a home

Post by HueyLD » Mon Jan 08, 2018 8:49 pm

The OP indicated that it is a hot hot market and the owner is a real estate agent.

His low ball offer will likely be ignored and he may not get a second chance to up the offer.

It is his opinion that the house needs a lot of work and the real estate agent seller appears to think otherwise.

I think the OP should move on to the next object, but he can still make the low ball offer and experience the agony of rejection.

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Re: Lowball offer on a home

Post by cheesepep » Mon Jan 08, 2018 8:51 pm

Having some homes before and having received low ball offers the day of or in the days after having posted the house for sale, I completely ignore them and don’t bother to counter. I tell my realtor to not even consider them.

Carl53
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Re: Lowball offer on a home

Post by Carl53 » Mon Jan 08, 2018 8:52 pm

We offered 100k on our home which was listed at 139k back in 1989. Turned down flat. Realtor came back two months later asking if we would come back with a higher offer. Closed at 109k. House only needed painting to suit.

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Re: Lowball offer on a home

Post by itstoomuch » Mon Jan 08, 2018 8:55 pm

Due Diligence. :oops:
We just sold property, closed last Thursday. The property was hard to value 35 years ago when we bought. It was harder to value today we sold.
We had 3 agreements and all three failed. The last offer had to be renegotiated just 2 days before closing because of unseen glitches.
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Re: Lowball offer on a home

Post by hoops777 » Mon Jan 08, 2018 9:04 pm

Figure out what the house is worth to you and make an offer.The owner will be greedy and probably not rational.It certainly sounds like he overpriced his home by a good margin.I would make by best offer upfront.You have no way to know what other offers will be or how low the owner will go.
K.I.S.S........so easy to say so difficult to do.

Jags4186
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Re: Lowball offer on a home

Post by Jags4186 » Mon Jan 08, 2018 9:09 pm

Yes I think some people misinterpret me. I do like the house. But I’m not being emotional about it. If fixed up houses are worth $525k in that area then this house is worth $525k minus the upgrade costs. Let the owner reject it...there will be other homes when they come on the market.

seawolf21
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Re: Lowball offer on a home

Post by seawolf21 » Mon Jan 08, 2018 9:11 pm

hoops777 wrote:
Mon Jan 08, 2018 9:04 pm
Figure out what the house is worth to you and make an offer.The owner will be greedy and probably not rational.It certainly sounds like he overpriced his home by a good margin.I would make by best offer upfront.You have no way to know what other offers will be or how low the owner will go.

+1

No one on this board can tell you how much to discount it by.

cherijoh
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Re: Lowball offer on a home

Post by cherijoh » Mon Jan 08, 2018 9:12 pm

Carefreeap wrote:
Mon Jan 08, 2018 6:17 pm
Jags4186 wrote:
Mon Jan 08, 2018 6:07 pm
Couple moving to California for a job. They are looking to sell. Owner has a real estate license so I’m sure he thinks he knows everything.

I’ve seen the house on and off on Zillow for a few months. It looks to me they’re ready to get out of there. There’s a bed, 2 couches and a dining room table. That’s about all this in there by way of furniture/possessions.
You can try but I wouldn't hold my breath. The house was probably bought near the peak of the last market and are trying to get back what they paid + new sales costs. Add the extra whammy that if they are moving anywhere in Coastal CA they need every penny out of the house in order to pay 2x to buy the same house.
+1 some people price their house based on "this is what I need" rather than "this is what I can reasonable get". Since this guy has a real estate license it is doubtful that he's getting professional advice from a neutral party about the value of his house.

Relatives of mine had a vacation condo in Palm Springs but wanted a larger place when they retired. They turned down what they considered was a low-ball offer and were very offended. But they didn't get another offer - so I question whether it was indeed low ball. They took it off the market and rented it out during the "snowbird season" (since they had already bought the bigger place). But then had to wait quite a while to sell - for less than the low-ball offer they rejected the year before. The condo had been paid off but came with condo fees, etc. so they really took a drubbing.

itstoomuch
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Re: Lowball offer on a home

Post by itstoomuch » Mon Jan 08, 2018 9:14 pm

BTW, we eventually sold at 27% below our beginning ask :happy .

We also bought a condo in August at 22% above ask :happy .
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Re: Lowball offer on a home

Post by mariezzz » Mon Jan 08, 2018 9:15 pm

seawolf21 wrote:
Mon Jan 08, 2018 9:11 pm
hoops777 wrote:
Mon Jan 08, 2018 9:04 pm
Figure out what the house is worth to you and make an offer.The owner will be greedy and probably not rational.It certainly sounds like he overpriced his home by a good margin.I would make by best offer upfront.You have no way to know what other offers will be or how low the owner will go.
+1
No one on this board can tell you how much to discount it by.
+2. Make an offer that you think makes financial sense to you. Don't worry about whether the buyer will perceive it as a "low ball". If the market is overheated, they might get more. I'd consider how long the house has been on the market for. If it's been on the market for a while, the people might be more willing to entertain realistic offers. If it's fairly new on the market, most people probably won't - in that case, perhaps wait to make any offer.

The couple might be in a financial situation that allows them to wait. Certainly seems like it. Either he's not a very good realtor (very bad at pricing the home for the market) or he decided to try overpricing the home just to see if he could get any bidders (and lowering the price could make some people think it's a bargain).

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Lieutenant.Columbo
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Re: Lowball offer on a home

Post by Lieutenant.Columbo » Mon Jan 08, 2018 9:29 pm

itstoomuch wrote:
Mon Jan 08, 2018 9:14 pm
We also bought a condo in August at 22% above ask :happy .
why would you pay 22% more than they asked for the condo? :wink:
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123
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Re: Lowball offer on a home

Post by 123 » Mon Jan 08, 2018 9:36 pm

Since the buyer and seller are so far apart it would save everyone a lot of aggravation and wasted time if the OP simply passed on the home.
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Re: Lowball offer on a home

Post by stan1 » Mon Jan 08, 2018 9:47 pm

Jags4186 wrote:
Mon Jan 08, 2018 9:09 pm
Yes I think some people misinterpret me. I do like the house. But I’m not being emotional about it. If fixed up houses are worth $525k in that area then this house is worth $525k minus the upgrade costs. Let the owner reject it...there will be other homes when they come on the market.
Home improvements generally don't offer a dollar for dollar return. Decide what you think is a fair price and make an offer, but starting with their asking price and subtracting the cost of the improvements you want to make may not be successful. If the comps in the lower end of your range ($480-490K) don't have any improvements that seems like a starting point.

hoops777
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Re: Lowball offer on a home

Post by hoops777 » Mon Jan 08, 2018 9:54 pm

itstoomuch wrote:
Mon Jan 08, 2018 9:14 pm
BTW, we eventually sold at 27% below our beginning ask :happy .

We also bought a condo in August at 22% above ask :happy .
Will you represent me on my next home purchase :D :D :D
K.I.S.S........so easy to say so difficult to do.

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Re: Lowball offer on a home

Post by aristotelian » Mon Jan 08, 2018 9:57 pm

Consider that the owner probably knows all the things that you said and they are priced into the asking price. You don't get to list everything you want done and deduct $100K. You may be 100% right about that fair market value but people overprice their things for all sorts of crazy reasons. Go ahead and make your best offer, but if you are $100K under asking price, be prepared to not get the house. Do you want the house or do you want a good deal? You may not be able to get both.

hoops777
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Re: Lowball offer on a home

Post by hoops777 » Mon Jan 08, 2018 10:05 pm

stan1 wrote:
Mon Jan 08, 2018 9:47 pm
Jags4186 wrote:
Mon Jan 08, 2018 9:09 pm
Yes I think some people misinterpret me. I do like the house. But I’m not being emotional about it. If fixed up houses are worth $525k in that area then this house is worth $525k minus the upgrade costs. Let the owner reject it...there will be other homes when they come on the market.
Home improvements generally don't offer a dollar for dollar return. Decide what you think is a fair price and make an offer, but starting with their asking price and subtracting the cost of the improvements you want to make may not be successful. If the comps in the lower end of your range ($480-490K) don't have any improvements that seems like a starting point.
I agree it does not work that way.You also have to keep in mind these are changes YOU think that have to be made to bring it to your level of satisfaction.Also,what you can do for 100,000 someone else can do for 50,000 depending on a lot of factors.I remodeled a medium sized kitchen and two baths for less than 30,000 in the Bay Area and did none of the work myself,and had good quality materials and installation.
Last edited by hoops777 on Mon Jan 08, 2018 10:06 pm, edited 1 time in total.
K.I.S.S........so easy to say so difficult to do.

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Re: Lowball offer on a home

Post by Nearly A Moose » Mon Jan 08, 2018 10:06 pm

noco-hawkeye wrote:
Mon Jan 08, 2018 8:40 pm
I agree for the lowball in your position.

They may very well be offended and end up taking a much higher offer. That's not your problem or concern. Offer what it is worth to you, and you seem to have a reasonable handle that this much work will not be cheap, easy, or quick.

If someone else wants to pay retail, and then sink another 125k into refurbs - that's their problem, not yours.

:sharebeer
+1 [edit: +3]. But do what you can to make the non price parts of the offer appealing to them.
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Quantumfizz
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Re: Lowball offer on a home

Post by Quantumfizz » Mon Jan 08, 2018 10:12 pm

Nothing wrong with offering super low, even if the seller did get offended, they would probably get over it pretty quickly if any subsequent offers you made became their highest offer.

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Re: Lowball offer on a home

Post by itstoomuch » Mon Jan 08, 2018 10:21 pm

Lieutenant.Columbo wrote:
Mon Jan 08, 2018 9:29 pm
itstoomuch wrote:
Mon Jan 08, 2018 9:14 pm
We also bought a condo in August at 22% above ask :happy .
why would you pay 22% more than they asked for the condo? :wink:
Redmond, Washington.
It was cheaper than Seattle. :mrgreen: :annoyed
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Re: Lowball offer on a home

Post by itstoomuch » Mon Jan 08, 2018 10:26 pm

hoops777 wrote:
Mon Jan 08, 2018 9:54 pm
itstoomuch wrote:
Mon Jan 08, 2018 9:14 pm
BTW, we eventually sold at 27% below our beginning ask :happy .

We also bought a condo in August at 22% above ask :happy .
Will you represent me on my next home purchase :D :D :D
you want a death K.I.S.S as in your signature line? :mrgreen: :mrgreen: :mrgreen:
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

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StevieG72
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Re: Lowball offer on a home

Post by StevieG72 » Mon Jan 08, 2018 10:40 pm

Seriously doubt the owner is going to sell for less than he paid.

What will the house appraise for?

Best of luck, it can be really hard finding the perfect home.

My next home will be move in ready. I have no desire to take on any projects.
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Re: Lowball offer on a home

Post by blmarsha123 » Mon Jan 08, 2018 10:51 pm

In a way it sounds like you really want the house. But you don't want to pay market value. You want a bargain. So it needs work. Almost all resales need work.

I would not lowball, but maybe split the difference (say, 50k). But quickly. If it went on the market in November, it is not surprising that it is still on the market, even in a desirable neighborhood in a hot market. But as someone up thread mentioned, Spring is coming.

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