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We need some help. We have found a house that we love. It has lots of problems and is not a home that most people would want, but we love it. The seller has lived there 30 years and HE LOVES IT, but has built a home elsewhere and moved away in 2007 when he put this house on the market for $850k for builders to buy the two lots and tear down the house. He puts it back on the market each spring with a new realtor and takes it off the market each winter. He has had no offers and there was no interest from builders. It was off the market after being down to $365 k when we saw it in January. We asked for another showing recently and he told his realtor to tell us that he would honor the $365k since we saw it when it was priced 365 but that this spring he was putting on the market for $400k.
The house needs a new furnace, new windows, new ac unit, 2 full baths remodelling, and a new kitchen(realtor had him put granite on top of the original 70s cabinets and paint them white), it is a quad level. The house is worth $240-280k (based on neighborhood comps) if it were in pristine condition. It is however the nicest lot in the n'hood and is completely different than the 3br ranches that surround it.
On one hand I think he doesnt want to sell (clearly) on the other hand he keeps making the ill informed aesthetic "upgrades" that the realtors tell him to, which makes me think he does want to sell. I was thinking of getting an appraisal ahead of time to submit with our offer but am wondering if I am just wasting my time and emotions on a doomed situation.
You assume you know the value of the home based on comps, but did you allow for it being a superior lot? If so, how much, and how did you come up with that number? Get an appraisal done by a certified appraiser if you want to make an offer, but based on what you're saying, I'd move on if it were me.
Doomed situation. You are too far apart on what you feel the house is worth and what he is asking. But are you being honest with yourself about the real value of the property? A $125K difference if it were in pristine condition is huge when you think it needs all that work. Even if it is worth what he is asking, do you really want to buy something that is so much higher priced than the surrounding homes? You'd never be able to sell it for that much of a premium. By the time you add "a new furnace, new windows, new ac unit, 2 full baths remodelling, and a new kitchen" you will be into it for $450K in a neighborhood of homes worth $240K-$280K.
We need some help. We have found a house that we love. It has lots of problems and is not a home that most people would want, but we love it. The seller has lived there 30 years and HE LOVES IT, but has built a home elsewhere and moved away in 2007 when he put this house on the market for $850k for builders to buy the two lots and tear down the house. He puts it back on the market each spring with a new realtor and takes it off the market each winter. He has had no offers and there was no interest from builders. It was off the market after being down to $365 k when we saw it in January. We asked for another showing recently and he told his realtor to tell us that he would honor the $365k since we saw it when it was priced 365 but that this spring he was putting on the market for $400k.
The house needs a new furnace, new windows, new ac unit, 2 full baths remodelling, and a new kitchen(realtor had him put granite on top of the original 70s cabinets and paint them white), it is a quad level. The house is worth $240-280k (based on neighborhood comps) if it were in pristine condition. It is however the nicest lot in the n'hood and is completely different than the 3br ranches that surround it.
On one hand I think he doesnt want to sell (clearly) on the other hand he keeps making the ill informed aesthetic "upgrades" that the realtors tell him to, which makes me think he does want to sell. I was thinking of getting an appraisal ahead of time to submit with our offer but am wondering if I am just wasting my time and emotions on a doomed situation.
I'd keep looking for another house. By the time you do the repairs/upgrades to the home, you'll have sunk 2x as much money into it as what the neighborhood comps are worth. You don't want the priciest house in the neighborhood, premium lot or not.
This is a VERY common situation. The "shopper" is also partially clued into to the "psychology" of the would be seller but no doubt other real estate pro have the same experience I do -- this "seller" does not really "need" to sell. They would very much like to get a price near their asking price as that likely would allow them to get into whatever house they really want as they seem to have mostly stopped taking care of their existing house. The fact that it is "over built" suggests that at one time the owner did have pride in the home. Maybe their circumstances have changed (not hard to imagine that maybe they no longer have the kind of income they once did...) or maybe they are just getting old / tired.
The OP will get NOWHERE AT ALL by presenting the "seller" with appraisals -- those are generally in the realm of "logic" and by all indications the owner of this home is mired deeply with their emotions...
What tends to happen in situations like this is: a) others submit offers that are closer to the neighborhood comps and over time the seller does eventually need to sell lowering his price or b) some equally emotionally buyer "falls in love" with the home and figures out some way to make an offer that is detached from the reality of appraisals / lenders...
On rare occasions a "intervention session" type real estate agent will tell the seller something like: "Do not spend any more of your limited money trying to pretty up this house. Do not set the price at would dream about getting so that you can move to ShangriLa. Let me set a price that is supported by comps. Sell this to someone that cares enough to do the needed upgrades and maintenance themselves. Move on with your life." If the OP is lucky enough to get to the seller when that sort of situation comes about then maybe this will work out but odds are better that the OP will do better to find a house more appropriate to their current needs lest they too stuck in a place where emotions overrule logic...
Visit the registry of deeds and see his mortgage paperwork. He may have re-mortgaged the property all the way up to $365k. This will give you a better idea if he can negotiate lower or not. Its possible he built his new house with a HELOC from his old house. If he owes more than your offer, its not likely he will sell.
Visit the registry of deeds and see his mortgage paperwork. He may have re-mortgaged the property all the way up to $365k. This will give you a better idea if he can negotiate lower or not. Its possible he built his new house with a HELOC from his old house. If he owes more than your offer, its not likely he will sell.
This is great advice. I once helped a family member buy a vacation property from a distressed builder. The builder wanted quite a bit of money on a great house, but Hurricane Ike did a huge amount of damage and the builder could not pay his insurance deductible.
I did a search at the county clerks office, found his note and deed of trust and offered what he borrowed on the property without repairs...plus his deductible and $500 for his trouble. He accepted, and assigned the insurance proceeds to my family member and he closed.
The builder was happy to walk away break even on that project.
The only other thing that might work - and I stress "might" - is to send a heartfelt letter to the seller with your offer stating how much you love the house, what feels "right" about it, how hard you've looked, talk about raising your children in the house, and leave out ANY negative. It has worked in some cases where sellers were so attached to their property that they wanted someone to love it as much as they have.
Let me get this straight. Comps say $240K to $280K, the house needs major, major work and you are considering offering $365K?
With all the work needed, I would say it sould sell for below comps.
What the seller owes is his issue, not yours. Your job is not to bail him out.
Ever hear the expression of a $1,000 saddle on a $10.00 horse?
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