The Offer....... (comparable sales, sales, real estate)

[ceili723]

Hello!
Question:
We want to put an offer in. The house just went on the market, the consensus is that it's priced "high" and there are two other houses in the neighborhood with comparable features that have been sitting for months. Both realtors we have talked to (from same office) have come out and told us that they think the price is high.
Well, we told the realtor that we wanted to put an offer in and they suggested an amount that is 1.7% lower than the asking price. Am I insane or is this a really dumb starting point for any negotiations??? I will add that the home has drywall in the attic, so the asking price has included that in the square footage. It is totally unfinished and has one window. There is no use for it besides storage.
What is appropriate in this market? This house is not a do or die for us, but it fits the bill. I would be willing to pay 95% of the asking price... of course ideally less. I would like to give them a solid offer based on the square footage without the storage area.

ANY advice of any kind would be helpful.

[North_Raleigh_Guy]

Originally Posted by ceili723

Hello!
Question:
We want to put an offer in. The house just went on the market, the consensus is that it's priced "high" and there are two other houses in the neighborhood with comparable features that have been sitting for months. Both realtors we have talked to (from same office) have come out and told us that they think the price is high.
Well, we told the realtor that we wanted to put an offer in and they suggested an amount that is 1.7% lower than the asking price. Am I insane or is this a really dumb starting point for any negotiations??? I will add that the home has drywall in the attic, so the asking price has included that in the square footage. It is totally unfinished and has one window. There is no use for it besides storage.
What is appropriate in this market? This house is not a do or die for us, but it fits the bill. I would be willing to pay 95% of the asking price... of course ideally less. I would like to give them a solid offer based on the square footage without the storage area.

ANY advice of any kind would be helpful.

Have your realtor pull comps. Not what is listed on the market, but what has actually recently SOLD and for how much. How much have the recent comparable sales sold for is the first step to developing an offer.

BTW, how is it you are working with two realtors?

I'll leave it to the pros to comment on whether or not an unfinished attic should be counted in the square footage.

[ceili723]

2 realtors... only b/c one was away and put another in charge during their vacation.

I'm not the rocket scientist of real estate, but really, the numbers are too high. A house just sold which could really change the comparables once we find out what the price was (asking price was quite LOW, condition equivalent to this house.) But if we wait on it, someone else could grab this house. Ugh!

I thought generally that an offer of 10% below listing was appropriate these days, but maybe I've been talking too much to friends in other markets.

[tony23]

Keep in mind that comps is what it's all about. You might be looking at a situation where the mortgage company won't finance your offer, or at a situation where 30 days after you close, the area comps drop and turn you upside down.

As for the agent - is this the agent who listed the house? If so, keep in mind that they're working for the SELLER, not for you.

Don't be too eager. If you make a mistake and wait too long and miss out on this house, you'll regret it until you find the next perfect home. If you make a mistake and buy it because you're in a hurry, you'll most likely regret it for years.

[shoes4birds]

Originally Posted by ceili723

Hello!
Question:
I will add that the home has drywall in the attic, so the asking price has included that in the square footage. It is totally unfinished and has one window. There is no use for it besides storage.

But can the attic be included in the square footage just because it has drywall? Doesn't any space that's included in square footage not only have to have drywall, but have to have heating and cooling running to the area? I could be wrong, but we currently have our home on the market and have a finished room over the garage that is complete. We were told by our realtor that we can't include the square footage of the room in our listing because it does not have the heating/cooling running into the room.

[MrsSteel]

Originally Posted by shoes4birds

But can the attic be included in the square footage just because it has drywall? Doesn't any space that's included in square footage not only have to have drywall, but have to have heating and cooling running to the area?

That's what I thought, too. Realtors, can you confirm this please?

I think the "10% below listing price" statement isn't really relevant. That may or may not be true generally-speaking, but you're talking about a specific house so you need to consider that specific situation. As others have said, ignore the listing prices. They don't mean anything. We hear a lot about people putting artificially high prices on homes, but occasionally people will put an artificially low price on a home in an effort to grab lots of attention really fast & hopefully start up a bidding war that will drive the selling price higher. The final selling price is the only thing that matters when it comes to comps.

[VickiR]

Remember when we keep saying that all real estate is "local"? This goes for the neighborhood, as well.

You cannot say that offering 10% below list price is customary. You must find the comps for the neighborhood and then go in with what you consider to be a fair offer. Keep in mind that in our usual market, if a house were to go on the market and get an offer in the first few days, we'd expect it would sell for the listed price. Things are different today.

But...market value is what a seller will sell his house for and a buyer will buy the house for...so...is it really overpriced? If the other two houses have been sitting for months, you are more likely to get those sellers to negotiate.

As for the square footage...you can only include what is heated/cooled and permitted!

If you have a buyer's agent...it IS the job of that Agent to educate you to the comps and to the market but it is also that Agent's job to do what you are asking...make the offer based on what you want...let the chips fall where they may.

I always think there is more than one side to any story!

Vicki

[House Lady]

square footage is a really big deal, but it isn't everything. The size and topography of the lot, placement of the house in the neighborhood and what it backs up to, upgrades and finishes, condition, etc. all affect the price at which a house can sell and appraise. No, the attic cannot be included in the living space, but if it is a finishable walk-up attic it does have added value at a portion of the price per square foot of the home. I cannot tell you the proportion without seeing the house and comparables, but it will likely be less than half. It should be included in the listing as "other" space above ground.

[duhrambull]

Originally Posted by ceili723

Hello!
Question:
We want to put an offer in. The house just went on the market, the consensus is that it's priced "high" and there are two other houses in the neighborhood with comparable features that have been sitting for months. Both realtors we have talked to (from same office) have come out and told us that they think the price is high.
Well, we told the realtor that we wanted to put an offer in and they suggested an amount that is 1.7% lower than the asking price. Am I insane or is this a really dumb starting point for any negotiations??? I will add that the home has drywall in the attic, so the asking price has included that in the square footage. It is totally unfinished and has one window. There is no use for it besides storage.
What is appropriate in this market? This house is not a do or die for us, but it fits the bill. I would be willing to pay 95% of the asking price... of course ideally less. I would like to give them a solid offer based on the square footage without the storage area.

ANY advice of any kind would be helpful.

According to your research, it is overpriced and there are two other houses on market in the same neighborhood. If i were you, i would wait a couple of months before even considering making an offer to this house.

The sellers are obviously testing the market, they are in no hurry to sell the house soon. An early offer will give them the impression that the house is "hot".

Only making fair offers (based on comps.) to those realistic sellers will save everybody time and trouble

good luck

[frogandtoad]

If the other homes in the neighborhood are so similar, why not put an offer on one of those? They will be more willing to move in price. If it's not so similar, then maybe it's worth more.

We sold our home recently. I can tell you I would definitely not have considered selling for much less than asking. If it had been sitting a while, then sure I would. Where we are, houses tend to go for 98% of asking so that 10% rule doesn't work. We had several offers within a week so anyone who waited lost out.

If you love the house, put in an offer for what you think is reasonable. As long as don't lowball, you'll get a sense of whether they are willing to move much in price by their counter.