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I've said it before and I'll say it again. Buying a house is not like ordering cheese at the deli counter and you do not buy a house by the square foot. Price per square foot is simply one metric that can be used in comparing different houses, but it's not how the price is determined.
As for the original question, one could just as validly ask why buyers dig into a certain price. Just because you want to pay a particular price puts the seller under no obligation to sell it to you for that price. Your valuation is different from the seller's, and you were just as dug into yours. To the extent that represents some kind of fault, then you are equally at fault.
As I have stated, I had a value in mind as to the worth. But I was willing and able to go up a bit from there. I was not "dug into" a price. The seller was. And my price was based on comps. His was not.
As I've stated several times, price per square foot is a STARTING price, then you work from there.
I have a good idea of the selling prices of that area. I've been watching them for months and have a spreadsheet. I know what most of the houses have.
This was a bare bones house. Nice house. Obviously I liked it. But it needs work AND doesn't have the higher end features that most of the other houses in that area have. AND it has a defect: Neighbor's fence has a 10 ft wide gate that opens directly into this house's front yard on side by the driveway.
I have a handle on what the house is worth now. I wasn't looking to get a steal, not that there's anything wrong with that.
As I've stated several times, also...it's not just ME who is dug into a certain price. Apparently EVERYONE has passed this house up for months. It's overpriced for what it is and the work that needs to be done and what it is lacking in features.
Geez....people seem so upset that buyers don't just walk up and pay what the seller wants. Trust me....an appraiser will look at these features and the condition of the property in comparison to other sales in the area. That's all they do. An appraiser will conclude what I and all other buyers have concluded as to the value.
That is not to say he won't get what he wants in the long run. All it takes is someone willing to pay it. And I will get what I want in the long run. I'm just disappointed he wasn't willing to seriously negotiate. Dropping 2% and sending a message on his bottom price, which was more than I was willing to pay (and over what his house is worth at this time) disappointed me.
Don't know why he's dug into that price. I am not "dug into" any price. I look at the comps and decide on a value, and THEN go UP from there. Hardly being dug into a price. But reality is reality. Having to spend almost $20k off the bat for work on the house is something to take into consideration. Now, if someone else doesn't care about fencing or whatever, they can pay more. It'll probably be a contingency, with a lender requiring an appraisal and repairs, and waiting to get the loan, and waiting for the buyer's house to sell.
Some sellers have a price in their head that they will not budge from no matter how long it takes to sell. ALL homes sell eventually and as long as it appraises they probably will get what they want, but it will take time. How old were your comps? If they were not recent then they might not be relevant. Your realtor could have asked their realtor for comps and how they came to their selling price.
I agree with them lowering for the AC. The fence is debatable. Appraisers do not always account for a fence. They don't here. So if you want a fence or updates to be done the seller could care less.
If you are still interested in the house I would have your realtor contact there's and ask for HER comps and what their deal is as far as a bottom line. Yu can always write a new offer.
They already moved to the new house so they wanted it gone but really felt it was worth asking price.
Realtor was in the last 30 days of her 2nd 6 month listing agreement and they were shopping a new realtor to jump start the action......market got just hot enough for the agent to find a buyer with a good offer
it's a funny business.
I have had listings saved just before the "count of 10," a buyer walking in at the last minute, falling in love and buying and saving me from a knockout.
When you have already conceded that you aren't going to get it done, and a deal materializes out of nowhere at the last second, it is a huge adrenalin rush...
Some sellers have a price in their head that they will not budge from no matter how long it takes to sell. ALL homes sell eventually and as long as it appraises they probably will get what they want, but it will take time. How old were your comps? If they were not recent then they might not be relevant. Your realtor could have asked their realtor for comps and how they came to their selling price.
I agree with them lowering for the AC. The fence is debatable. Appraisers do not always account for a fence. They don't here. So if you want a fence or updates to be done the seller could care less.
If you are still interested in the house I would have your realtor contact there's and ask for HER comps and what their deal is as far as a bottom line. Yu can always write a new offer.
People seem not to want to believe the house was overpriced. Start with the premise that it was, because it was.
The comps: One had sold within weeks before, the other had sold end of September. Those were within spitting distance and I think the same builder. There were other comps a little farther away, and a little longer ago. Those were even lower priced, obviously, and I disregarded those.
If I'm not mistaken, the appraiser will include the fence, because a fully fenced yard is the standard for the area. Since the lots are large, that's a $10,000 expense. So it's a big ticket item, like a roof or a/c system, and as I say, it's the standard. Just like having a/c. Unusual for a house in that area not to have a fully fenced back yard.
But in my case, I need a fully fenced back yard, anyway. So that affect what I will pay, since it's so costly.
I can't go back, now. My agent is angry. I don't blame her in a way, but she's not a great agent. I don't want to deal with that agent, any more. And I would have to, for that house. I'm angry that she suggested I meet the seller more than halfway, w/o any explanation for that. It was as if she was working for the seller.
If there was a basis for the asking price, my agent had all the opportunity to tell me. I certainly emailed her and explained in detail what my offer was based on. But agents don't do it that way, I think. They just try to get a sale...whatever the seller wants vs whatever the buyer wants, I guess.
I am disappointed, it's true. I'll go and buy something else, though.
Just saw a house sell after a year. 3.5 million ask, lowered to 3.3 and it sold for 3.2..... I personally thought 2.6-2.7 was the end of the world (assessed for 1.9 but neighborhood was getting hot again). Seller owned it free and clear and wasn't in a rush/jam to sell it. Had 5-6 low offers (below 2.5) and he held to his price. Buyer closed in less than 30 days!
All it takes is one buyer with cash to get the deal done!
Let's assume the value of the house is $3,000,000 and that property taxes are $80,000.
He sold it one year later for 3,200,000:
Take 2% inflation off that....the $3.2M is equivalent to selling it for $3,136,000 the year before, because of inflation.
Real estate prices increased maybe 5% in that year. So seller will have to pay 5% for his new house (If he was going to pay $3,000,000 for a new house the year before, he will now have to pay $3,150,000.)
So the $3.2M sale is equivalent to about $2,986,000 the year before.
Let's assume the property taxes on his sold house and his new house are approx. the same.
So he really sold his house for $2,986,000 the following year, not $3.2M. Because the difference between $2,986,000 and $3.2M is eaten away by inflation and real estate costs in that year.
He still did great, since his offers the year before were less than $2.5M. But a future sale is not totally equal to a current sale because of inflation and increase real estate values. If he'd gotten an offer for $3M the year before, he'd actually have come out ahead than selling for $3.2M the next year.
People seem not to want to believe the house was overpriced. Start with the premise that it was, because it was.
The comps: One had sold within weeks before, the other had sold end of September. Those were within spitting distance and I think the same builder. There were other comps a little farther away, and a little longer ago. Those were even lower priced, obviously, and I disregarded those.
If I'm not mistaken, the appraiser will include the fence, because a fully fenced yard is the standard for the area. Since the lots are large, that's a $10,000 expense. So it's a big ticket item, like a roof or a/c system, and as I say, it's the standard. Just like having a/c. Unusual for a house in that area not to have a fully fenced back yard.
But in my case, I need a fully fenced back yard, anyway. So that affect what I will pay, since it's so costly.
I can't go back, now. My agent is angry. I don't blame her in a way, but she's not a great agent. I don't want to deal with that agent, any more. And I would have to, for that house. I'm angry that she suggested I meet the seller more than halfway, w/o any explanation for that. It was as if she was working for the seller.
If there was a basis for the asking price, my agent had all the opportunity to tell me. I certainly emailed her and explained in detail what my offer was based on. But agents don't do it that way, I think. They just try to get a sale...whatever the seller wants vs whatever the buyer wants, I guess.
I am disappointed, it's true. I'll go and buy something else, though.
Understandable. I agree in finding a new agent! Doesn't seem that she was handling things in your best interest! She should have taken those comps to the other realtor. Good luck in your continued search!
If you are a buyer, then sellers are: greedy, delusional, foolish, unrealistic
If you are a seller, then buyers are: greedy, delusional, foolish, unrealistic
If you are a buyer, one day you might be a seller. If you are a seller, you were probably once a buyer.
I personally don't understand the concept that a buyer should always want to pay x per cent less than the list price. The listing agent has probably already convinced the seller to ask a realistic and fair price for the day the house is listed. True, some areas will see prices falling with every month thereafter. But others will see rising prices, such that if the house is a tiny bit overpriced today, it will be a bargain in a few months at that same price. So some sellers wait it out.
I have been both.
I am an almost totally practical person. I was a practical seller, and I am a practical buyer.
I sold my house quickly. I have had trouble buying because the sellers in this area have gotten greedy. It's not just ME who thinks that. Agents have told me that the listing prices are getting ridiculous because of all the new agents in the area who are desperate for listings, so they are listing properties at silly prices. One agency recently had a meeting about the difficulty of getting the sellers to list at more reasonable list prices.
I have not know any buyer who wants to pay "x%" less than the list price. I certainly am not one. It's not unusual here for houses to sell 7% less than the list price; that's the norm, it seems. At least $10,000 less than the list price, is common. That's because they are overpriced. This was my first offer. I think I have a good handle on what the house is worth, all things considered. I was willing to pay a bit more than that, but apparently not what he wants. I can't do it because of the thousands I need to pay to get it up to snuff.
I've seen a very few houses sell quickly and almost full list price. Those houses that did were priced reasonably, IMO. My Dad, however, would say that they were underpriced, or it would've taken longer to sell, and for less than list. That's how some people think.
I just look at what the houses in the area are going for as related to size of home, size of lot, quality of build and features, and whether "finished out" by having the standard fully fenced yard and a storage shed. (semi-rural area...the yard is very important) I'm talking of sales prices, not list prices.
Yes, the increase in real estate prices will catch up to an overpriced house. But selling a house for a bit more next year is equal to selling it for LESS this year, because of inflation and the increased amt he'll have to pay to buy his new house. If he's buying down, then he'll also be paying a bit more in property taxes by waiting.
I don't fall in love with houses, though. So maybe I'm different. I was the same way when I bought my last house. I have a preference and extreme like for a house, but I don't lose my mind and think I'm in love with it or that I want to pay more because I love it. So I think I may be different from others in that respect. It would be easier if I DID fall in love with a house. Maybe that will happen soon...maybe I will fall in love with a house. We'll see.
ALL homes sell eventually and as long as it appraises they probably will get what they want, but it will take time.
This is the second time I've seen someone say "all homes sell eventually" on this forum. That is certainly not true.
Also no clue how you can say they will "probably" get what they want. No one knows what they'll ultimately get. And if by "what they want" you mean the asking price, OP already stated they were willing to take 2% less, and we don't know if they would've taken even less had OP countered again. As time goes on, it's certainly likely that they may be more willing (or need to if they do actually need to sell) to take even less. Sure, it's possible someone may come and give them their asking price, but I wouldn't be too confident in that happening.
Rest assured, if the house is truly overpriced, eventually the seller will get desperate enough to drop by $10k. Then you swoop in and buy it!
Or the market will float up and bring more buyers at his price. That happens too.
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