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A house that's on my saved property list just dropped $5K to $194,900. It had been sitting for two months with no change in status. This house was already priced above two neighborhood comps $187K/$190K that are on the market. However, this house is on a lesser traveled street; but there isn't a complete fence surrounding the back yard yet. And the present owner has lived there for twenty seven years; there could be sentimental value inflating the original $199,900 price. So I wasn't willing to overpay, and I have just kept an eye on this listing. Now that it's dropped the $5K, I feel the seller is willing to negotiate.
This afternoon, I talked with my buyer's agent about an offering price: I would like to offer about $183K-$187K. Or at least start the negotiations at $185,000 (and ask for them to cover some closing costs). My buyer's agent says that since they have already lowered the price, they will probably reject any offer much lower than $195K.
Is a lowered price the new point of negotiation (it's standard to offer less)? Or, is the lowered price what the buyer needs to offer to have it accepted since the seller has already "compromised" first?
One other thing that may be affecting this: My exclusive representation contract with the buyer's agent expires in October. (I will only extend it if we are in the middle of a deal; otherwise I will probably pick a new buyer's agent). One silent fear I have is this buyer's agent is trying to get me to bid high so the offer will be accepted ASAP before his exclusive deal with me runs out.
Is a lowered price the new point of negotiation (it's standard to offer less)? Or, is the lowered price what the buyer needs to offer to have it accepted since the seller has already "compromised" first?
One other thing that may be affecting this: My exclusive representation contract with the buyer's agent expires in October. (I will only extend it if we are in the middle of a deal; otherwise I will probably pick a new buyer's agent). One silent fear I have is this buyer's agent is trying to get me to bid high so the offer will be accepted ASAP before his exclusive deal with me runs out.
You could be right about the agent.
And that's unfortunate, because before I read that I was going to suggest that you make your offer for 185 and have the agent explain verbally to the sellers that you are seriously interested in the house, not trying to lowball, and just trying to pay what the current market dictates.
I have known sellers to have an attitude of 'we already came down on the price once, so no more.' It takes some tact to get around that.
October is a ways off. Maybe you could sit down with your agent and say that you would like to do this deal before the contract expires (even if you wouldn't, really), but that you don't want to pay more than the comps? It seems to me that there may be some time for negotiation, a few days at least, depending on how quickly you can close.
Your agent has no clue if they will reject the offer or not. Go with what you think is the right number. If your agent has a problem with that it is time to find a new agent (maybe it already is).
Offer whatever you like. Your agent is required to present any offer you write. The worst that can happen is that the seller says " no" and doesn't counter offer, or that the seller says " no " and counters.
Your agent is simply offering an opinion. You don't have to agree with it. The agent's job is write up an offer you like, present it and then negotiate that offer for you if it gets to that point.
If your offer gets turned down, don't take any of the of the sale process personally. It's business. If the seller isn't interested in your offer now, then wait. If it's still there in a month, make another offer.
What you can do to make your offer stronger is to present comparable CLOSED sales to the seller, which hopefully would support your offer.
Are you saying it has only been listed for sale for 2 months? If so and they dropped the price already, they might be getting itchy to sell. I also would wait a few weeks to make an offer, and Id make your lowball offer.
If a price is dropped and I am an interested potential bidder, it's a sign of weakness to me. No way would I bid close to 195k.
They might have dropped with the idea of simply negotiating harder later, you don't know either way. You bid the lowest amount you think they will enter negotiations on. Then try to figure out what is the lowest number they will accept grudgingly.
My guess is that is 189k. Bid 184k. Then come up to 187k (all this bidding BS serves to make them think they are getting something out of you). Then after a little posturing/sweet talking between the two sides - Go up to 189k and tell them it expires in 2 days. They'll take it.
You have no idea what the buyer needs. Make the offer, negotiate and hopefully you will both be happy!
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