Making an offer on a house that is overpriced. (agent, sales, prices)
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Hello everyone! I apologize in advance if this is not the board for me. I am in the market to buy a home in San Antonio. I have been pre-approved and my house in Ft Worth has sold (closed Friday!!!) I am staying with my parents as I am house hunting.
My husband and I have found a house that we love. However, based on comps from the neighborhood on very similar homes, this home is very over priced. Homes in the neighborhood have sold for an average of $112 sq ft over the past year. This house is listed at $125 sq ft. It does not have any additional upgrades that makes this jump in price understandable.
Unfortunately for us, it has only been on the market for 13 days. We do not know the background of the sellers (don't know if they *have* to move or not) They have small children and do not appear to be packing.
We are going to make an offer today and we are going to offer $40K less than asking. (They are asking $362K and we think, based on comps, $322K is more than fair.) Is there anything we can do to make this "low" offer more appealing. More earnest money? Anything?
Thanks for your help! We have been house hunting since July and are thrilled to find a home that meets our needs. We would love to see this work out.
I hope you're working with a buyer's agent who can present an offer on your behalf without offending the sellers. He/she can present the offer along with the comps to show why you are offering the price you think the house is worth, instead of what they're asking. Is their home listed with an agent? The listing agent should have done a CMA when they put the house on the market and/or will have other data as to why their home is priced higher than others that have sold.
I recently did this same type of thing for some buyers who wanted to make an offer on a house priced at $399K and they got it for $330K, based on my research that showed why we felt it was over priced to start with...
Your idea of higher earnest money is a good one, too - it shows sincerity to move forward with the purchase on your part. You should also have your lender's pre-approval letter ready to present to them, along with a personal letter on why the house best suits your needs.
Thanks! We are working with agents... pre-approval letter is ready to go! This could be a very smooth transaction, *if* they're willing to come quite a bit down.
I've made offers like you are talking about and when I make them I do a couple of things, one is making the offer good for 2 hours, and for a number like $322,243.98.
We have found it tends to throw off the sellers a bit because they try and figure out how you came up with that specific number but they don't have much time to figure it out. It has worked before a few times.
The other thing is I am always prepared for the counter offer with the suggestion of "why don't we just meet in the middle", that way we both get most of what we want? This is generally seen as fair to everyone.
That has ALWAYS worked... The key to this is to figure out what the first offer should be so you end up close to where you want to spend after meeting in the middle.... Be prepared for at least one agent to say something like "you don't want to offend (insult) the sellers with a low offer". This IMO is hooey as long as it's not rediculously low....
I have yet to run into a sane person who is offended by money, they may not like the first offer but eventually they come around or sit on the house for a while....
I've made offers like you are talking about and when I make them I do a couple of things, one is making the offer good for 2 hours, and for a number like $322,243.98.
We have found it tends to throw off the sellers a bit because they try and figure out how you came up with that specific number but they don't have much time to figure it out. It has worked before a few times.
The other thing is I am always prepared for the counter offer with the suggestion of "why don't we just meet in the middle", that way we both get most of what we want? This is generally seen as fair to everyone.
That has ALWAYS worked... The key to this is to figure out what the first offer should be so you end up close to where you want to spend after meeting in the middle.... Be prepared for at least one agent to say something like "you don't want to offend (insult) the sellers with a low offer". This IMO is hooey as long as it's not rediculously low....
I have yet to run into a sane person who is offended by money, they may not like the first offer but eventually they come around or sit on the house for a while....
I've always wanted to know what is the appropriate amount to offer on a house without insulting the sellers?
What your offer should be depends on what is common in your region. In New Orleans, sales prices are published in the newspaper so I kept track for a year. The median value of sales price divided by asking price was 0.925. There were peaks at 90% and 95%.
When I bought my house here, my first offer was 85% of the asking price, and we finally agreed on 91% of the asking price.
Again, it varies depending on community. When I lived in College Station, TX, in the late 1980's and 1990's, the selling prices were quite a bit less than the asking price, just as in Louisiana. In San Diego in the early 1980's, that was not the case.
You are offering 94%. I think they'd be crazy not to take it! At the very least, it's a good starting point.
I really hope that doesn't happen to us! We have already lowered $10,000 and added an $8,000 roof. I think we are priced well based on comps, not that there are many as of late. I know in our situation there is a breaking point. Where it is completely not worth it to sell. We would hate to lose our deposit on our new house...but we can't give our current house away.
My realtor talked to the sellers realtor. He told them that we were very interested, but were worried about price bc we couldn't find any comps that justified it. Their realtor pulled some comps that IMO are not true comps. The comps they pulled were all homes that had VERY nice pools (Pools in San Antonio and especially this neighborhood are common and considered a plus) This house does NOT have a pool. It also has a few other strikes against it- it is in a 100 yr flood plain, master bedroom is UP... which I sorta feel should be reflected in the price. And it is not. So we shall see. They are asking $362K... we offered $325K.... I hope we get it. However, if we don't, there WILL be other homes.
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