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Old Yesterday, 01:02 PM
 
6,010 posts, read 6,348,587 times
Reputation: 10088

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Quote:
Originally Posted by jackalope48 View Post
You are being asked to negotiate with yourself; don't. You put in an offer that has not been accepted, rejected, or countered. Your agent should respond with a request for all the information contained in the inspection they are aware of and either an acceptance of your offer or a counter proposal in light of the new information.
Sorry, but that's not correct. The OP's offer was rejected when the Seller accepted the other offer. Otherwise, the Seller could simply accept the OP's offer now. That's not how it works. There is now no offer on the table and the OP needs to resubmit an offer, if so desired. They can either resubmit their original offer, or they can put in another offer based upon what they know today.
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Old Yesterday, 02:19 PM
 
Location: Rochester, WA
1,768 posts, read 886,506 times
Reputation: 4663
Mice droppings and a patched oil tank, without knowing more, don't sound like reasons the price should be reduced. These are excuses for the original buyers to get out of a contract on a house they no longer wanted. Or they're not really ready to buy a house. Either way... I don't see it as a cause to re-evaluate the home's price. It's not like a major structural problem or defect has been discovered... yet. These are normal maintenance issues in a home.

Do you still want it? If they put it back on the market, would there be a bidding war again? Do you want to gamble on that?
Those seem to be the issues for me.

If you decide to go forward, you will still do your own inspection on the home, especially now. If there's more to it than has been disclosed.... you can rethink things then.
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Old Yesterday, 04:06 PM
 
6,674 posts, read 3,483,044 times
Reputation: 7252
maybe you are the only bidder
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Old Yesterday, 04:37 PM
 
Location: Denver CO
13,928 posts, read 7,190,422 times
Reputation: 19651
Quote:
Originally Posted by Diana Holbrook View Post
Mice droppings and a patched oil tank, without knowing more, don't sound like reasons the price should be reduced. These are excuses for the original buyers to get out of a contract on a house they no longer wanted. Or they're not really ready to buy a house. Either way... I don't see it as a cause to re-evaluate the home's price. It's not like a major structural problem or defect has been discovered... yet. These are normal maintenance issues in a home.

Do you still want it? If they put it back on the market, would there be a bidding war again? Do you want to gamble on that?
Those seem to be the issues for me.

If you decide to go forward, you will still do your own inspection on the home, especially now. If there's more to it than has been disclosed.... you can rethink things then.
Mice droppings and the oil tank are all the seller's agent has shared. There could have been something more significant on the report that caused the prior buyer to back out, the OP has no way of knowing.

I would definitely not rely on a second hand account of an inspection before buying a house, I would want my own inspection by someone I selected.

As to whether the seller would take less than the prior offer, no real way to know in advance. OP may have been number 2 in terms of offers, but for all we know, there were a 3, 4 and 5 in between his offer and the original asking price. A counter with a lower offer is a gamble that may pay off or it may mean the seller moves on to another buyer.

Personally, if I really wanted the house, I'd reiterate my previous offer, subject to any findings on my own inspection.
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Old Yesterday, 05:05 PM
 
Location: Georgia
4,256 posts, read 3,226,927 times
Reputation: 14332
Quote:
Originally Posted by just_because View Post
It may be $33 per month but over a 30 year loan, that 7,000 will cost you over 12,000 in the end. That's not to say that it's not worth it but I think that looking at money in terms of 'per month' is not wise. $33 per month may not be a huge amount of money but if you're 30 now, you'll be paying that $33 every single month until you are 60! Through 30 winters and 30 summers. You may not even have kids now but you could be $33 poorer every month well past you being grandparents!
Perhaps. But, realistically, you probably won't be in that house for 30 years, regardless of intent. Some are -- but most aren't. And you'll probably refinance at some point, and some pay off early. But there are very few buyers who move into a house, pay a mortgage for 30 years and then declare themselves mortgage-free, because Americans have a tendency to take built-up equity and apply it to another home within 7-10 years. Older Americans may not have a mortgage, but in many cases, it's because their house appreciated in value to the point where retirees could take the equity out of their home and buy a smaller home/senior living situation for cash. They are technically "mortgage free", but it's because of equity that has built up over possibly 2 or 3 homes in the past 30-40 years.

Plus, equity in the home 30 years from now will hopefully offset the $4,880 interest portion of the $33 a month.
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Old Yesterday, 05:20 PM
 
3,433 posts, read 2,712,938 times
Reputation: 6328
Stop. Red flag.
A patched oil tank could mean there was an oil spill.
You should have an "environmental phase one" evaluation done by an engineering firm and have the results of it be a contingency in the buy/sell. You would either want clean up done by owners at their expense and the work signed off on by YOUR engineers or you would withdraw your offer and receive your earnest money back in full.

Depending upon your state law, the purchaser of property where oil was spilled could become liable for the clean up of such and be financially liable for the contamination of the water table now and in future. If there waa leaked oil, this cleanup & remediation etc could easily cost more than the 400k house. (...in some states, sellers can not sell away their liability with the property & tend to declare bankruptcy to avoid paying for cleanup or stop paying mortgage so bank becomes owner by default.)
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Old Yesterday, 08:31 PM
 
14,165 posts, read 14,235,890 times
Reputation: 19225
Quote:
Originally Posted by MikeJaquish View Post
You are an investor. Your options and needs are different.
The OP is seeking housing and a roof over their heads.

When you work with people who have a lease expiring in 3 months, who must give landlord 60 days notice, and going month-to-month after expiration will cost them $300 additional monthly, they must have a different perspective.

I just put first-timers under contract after writing 6 prior offers for them.
Yep. They made some compromises, but the prior offers were all very good. Just not good enough.
Iím speaking strictly in a purchase for personal use view. I would not go up in price if a seller asked for ďyour best and highestĒ. Thatís just stupid. Iím not going to keep going up in my offer . I made my offer as t9 what Iím willing to pay.
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Old Today, 04:09 AM
 
Location: Cary, NC
28,565 posts, read 50,799,488 times
Reputation: 26737
Quote:
Originally Posted by Electrician4you View Post
Iím speaking strictly in a purchase for personal use view. I would not go up in price if a seller asked for ďyour best and highestĒ. Thatís just stupid. Iím not going to keep going up in my offer . I made my offer as t9 what Iím willing to pay.
Some people do. Some don't.
But, if I as a seller come back to you with a counter that is $1000 more than you offered on a property that fits your needs very nicely, you would always walk away without further consideration because you never offer less than your maximum?

I have worked with plenty of buyers who were surprised when they didn't get a response from sellers asking for one final shot at it. It is all part of buyer education.
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Old Today, 06:04 AM
 
103 posts, read 70,775 times
Reputation: 143
If I received 4 offers at my first open house, I'd be a pretty confident seller even with the issues from inspection. If this buyer comes back with a lower offer, I guarantee the house will get put back on the market. I'd keep my original offer, do my own inspection, and then negotiate for additional repair costs.
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Old Today, 06:59 AM
 
713 posts, read 289,271 times
Reputation: 1117
Quote:
Originally Posted by dblackga View Post
Perhaps. But, realistically, you probably won't be in that house for 30 years, regardless of intent. Some are -- but most aren't. And you'll probably refinance at some point, and some pay off early. But there are very few buyers who move into a house, pay a mortgage for 30 years and then declare themselves mortgage-free, because Americans have a tendency to take built-up equity and apply it to another home within 7-10 years. Older Americans may not have a mortgage, but in many cases, it's because their house appreciated in value to the point where retirees could take the equity out of their home and buy a smaller home/senior living situation for cash. They are technically "mortgage free", but it's because of equity that has built up over possibly 2 or 3 homes in the past 30-40 years.

Plus, equity in the home 30 years from now will hopefully offset the $4,880 interest portion of the $33 a month.
Unfortunately, many consumers, young and old, have very poor financial literacy and frankly, I think that explanations like this, although not factually incorrect, do not help people to see things in the right way, can mislead, and can promote poor personal financial management in people who just don't grasp this stuff very easily.

I take your point that most people don't spend 30 years in a home. However, interest charges are very heavily stacked toward the earlier years of a mortgage. So if they stay in the home just 10 years, that 7,000 has already cost them over 9,500 (payments made to that point + remaining loan balance). After 15 years, they are in for 11,000. This does not consider any potential impacts of a less favorable loan to value ratio - potentially PMI, less favorable interest rate, etc.

However, it gets much worse if we use your own scenario:
You say that people typically move to another home, applying their built up equity into that next home after 7-10 years. I agree. You are assuming prices rise over this time and i'll accept this assumption. If after 10 years, they move into a new home taking 9.5k less equity from their first home (7k plus interest paid after 10 years) to invest in that next home, they will forfeit over 21k in house appreciation on that amount assuming a 4% annual price rise over the next 20 years. So in your own scenario, that 7k has actually cost them over 21k in lifetime wealth due to less money available for investment in their next houses.

Agent commissions should also be looked at this way. It's often believed that consumers care less about commission costs when they've made loads of money on house appreciation. Hey, it's just offset by all those huge gains, right? Wrong. If someone buys 3 homes in their lifetime before downsizing or cashing out (similar to your own scenario) and they pay 25k commission to sell their first house after 10 years and 30k commission to sell their second house after a further 10 years, they will forfeit about 120k in lifetime wealth assuming an approximate 5% appreciation in home values. This is because the commission amount paid was not available for investment in the next house and therefore appreciation on that amount is forfeited. If you add 30k to sell their third house when they cash out and downsize, they will be down 150k in lifetime wealth plus the interest / investment gains that the 150k yields in retirement.

Of course it's simply not realistic to think that you can buy and sell big, expensive things with zero transaction costs but people should consider their investment in those costs differently when they consider their lifetime picture of investment gains in real estate. If a relatively modest savings on commissions is invested back into a fast appreciating market, even that small amount can make a huge difference over 20 or 30 + years of appreciation. For example, saving 10k commission on a sale of your first home will yield you over 27k if invested back into a RE market growing at 5% per year.

Likewise, if you apply that 10k commission savings toward a larger down payment on your next home (rather than buying 'more home'), that will save you will save over 14.5k if you have a 20 year loan on your second home.
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