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it doesn't look like the seller is willing to come around at all. we do like the house, but it seems silly as the buyer to make up for the difference when we're buying 30k above the appraised value. we're only asking for a 9k reduction in price to get the mortgage we need.
fyi, the money we're borrowing for the dp is a loan from my parents to help with closing costs and some cushion. we had to go to 23% dp for this house since the seller didn't want to come down in price and we couldn't go above 417k for mortgage.
oh well... it's a beautiful house with a location we love, but i think you guys are right since the advice seems to be pretty unanimous and well-informed.
You have more than bent backwards to keep the transaction together ... Its just that Seller is not living in the present. You may be surprised to find that if you ask for the release of deposit money and Seller knows you are walking away, they may change their tune .... somewhere during your negotiations the Seller has obviously come to know that you really want that house; that is why they are are not accepting your generous offer of $531 k and not giving in much.
sweetpotato: The signals you sent throughout the negotiations thus far sent one signal to the seller "I love the house and I'm thinking with my heart and not my head!" That fact that you even offered to pay more than the appraised value, nay, that you even considered paying more than the appraised value, was enough to make the seller think he hooked a sucker. He probably thinks you'll cave in and find some way to overpay for his house.
I agree with armx, once you demand your earnst money deposit back you may very well hear a sudden willingness to compromise from the seller. Your only response should be to negotiate further down, all the way down to the appraised value. He had his chance for you to overpay by some (which he lost because he wanted you to overpay by more), if he comes back to you then you will know he is the desperate one, and he's the one willing to come down to the appraised price.
Take a deep breath and relax. The seller will not sell this house for more than the appraised value. It's not going anywhere. Let him squirm. Meanwhile, get your earnst money back, and keep looking -- there are many, many fish in the sea.
In Sweetpotato's defense (not that she needs it) offered $540K before BofA appraiser did his/her assessment ... And FMV by definition is what a purchaser is able, ready and willing to pay. That said the rest of your post (expounding on my suggestion to ask for the earnest money deposit) I hope, Sweetpotato, has the gumption to go ahead with. I thought you might also suggest to evaluate whether Sweetpotato needs another agent?
In Sweetpotato's defense (not that she needs it) offered $540K before BofA appraiser did his/her assessment ... And FMV by definition is what a purchaser is able, ready and willing to pay.
That's only true if the transaction is voluntary and bilaterally informed.
When there's information asymmetry, it's possible to profit from the ignorance of the other side. To put this another way, if someone convinces me that a loaf of bread is worth $200-, and I purchase a loaf of bread for that price, that does not make "FMV" of a loaf of bread $200.
Because her buyers agent was AWOL, this wasn't a bilaterally informed transaction until the appraiser injected a dose of reality into the mix.
That is not totally true .... If I remember correctly, Sweetpotato was on a rebound after having missed out on another house that she had offered $540 for that was not accepted. So she was an informed - not necessarily by her agent - buyer.
Sweetpotato did ask for input but it is our responsibility to help her make the best decision knowing that she really likes this house. Buying a house is a financial and emotional decision. Other posters should refrain from becoming over-bearing "parents" as it were.
That is not totally true .... If I remember correctly, Sweetpotato was on a rebound after having missed out on another house that she had offered $540 for that was not accepted. So she was an informed - not necessarily by her agent - buyer.
I respectfully disagree (besides, it doesn't alter the fact that your "definition" of FMV is wrong). The listing agent was armed to the teeth with comps to support whatever price they wanted to support.
Her agent provided absolutely nothing.
Real estate valuation is tricky business. If having experience bid on a place once was all it took to become an informed buyer, why bother with a buyers agent at all ? Having experience bidding on one house doesn't suddenly make you a proficient real estate appraiser.
That the price negotiated was substantially above appraisal indicates that the listing agent was a very effective negotiator, and had a clear information advantage.
Quote:
Sweetpotato did ask for input but it is our responsibility to help her make the best decision knowing that she really likes this house.
I don't think we should try to internalize her own subjective preferences, but I do agree that one should avoid imposing their own subjective preferences. I find it simpler to stick to the objective part of it. The subjective part is completely up to her.
Some people especially today, will only buy if the "deal" is in their favor with the only regard being financial. If you plan on staying for a while the value of that home will increase past your investment. Real estate always goes up in value over the long haul. I am sure with a little help from the two realtor's $$$$ you should be able to come to some kind of agreement.
It's not easy to find the house you love especially with a great location.
It's not about what others think, it's about what you want.
Just my opinion.
Of course on this board I am usually out numbered.
what's fmv?
apparently the seller has come into some money at her job and says she will pull the house off the market and ride it out should we cancel the contract. through our attorneys, she rejected our request for 9k price reduction. however, the agents have offered to reduce their fee by 1% - $5400, thereby making this a matter of $3600 to make up. the seller has also rejected this request. it sounds like the seller is no longer motivated to sell. we are contemplating what to do. the current inventory out there isn't very appealing. but, it's also financially beneficial for us to wait to buy in that we'll save more money each month.
oh, yes, we were on the rebound. we were under contract for a house for $540k but pulled out due to structural issues with the house (basement wall leaning out). within a few days, our agent sent us a brand new listing asking $585k and said we'd have to come up to our max price of $540k. we put in an offer and negotiated to $540k. (surprise) our agent tried to push us above our max price, but we couldn't go above it. we now realize it was a bad idea to use the same agent when she knew our max price.
if we pull out of this house, it just doesn't seem like we'll find another house for a while.
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