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We have offered $340,000 (our 'starting price' - we expect sellers to counter) on a house which is listed at $389,900, although our realtor says it is overpriced by about $9000. Our offer is cash, no mortgage, with guaranteed completion in June with no contingents. The house is is beautiful decorative order but will need a new roof and all new kitchen appliances, and since the pool is 10 years old I anticipate work there too.
The agent says that they have priced it to allow for replacements, that the area (The Woodlands, Texas) is 'booming,' with price rises and no price falls, and that she won't even put our offer to the sellers as it is not one to be taken seriously.
My questions are - if the area is booming, why have many houses there been on the market for 6 months or more, and since this one has been on for 3.5 months, why would they not take our offer seriously? Am I missing something?
If you have a written offer the listing agent has to present it. I would suggest that since you are already getting some "negative reception" from the listing agent, that you ask your buyer agent to present the offer (with the listing agent present).
It is the agents job to try and get the seller the best price and terms. By taking this tactic, it may get you to think twice and make another higher offer.
Put it in writing and make sure it gets presented. If she won't present it have your agent call the principal broker and they will make sure it gets presented. Then a complaint to the real estate agency is in order.
An agent's opinion on an offer's validity is something to take into consideration, have your grains of salt handy of course. But an agent should never refuse to present any legitimate offer regardless of their personal opinion. We have a offer response form here that I make sure gets signed by the seller. That way all parties have proof the offer was at least presented.
We have offered $340,000 (our 'starting price' - we expect sellers to counter) on a house which is listed at $389,900, although our realtor says it is overpriced by about $9000.
The agent says that they have priced it to allow for replacements, that the area (The Woodlands, Texas) is 'booming,' with price rises and no price falls, and that she won't even put our offer to the sellers as it is not one to be taken seriously.
My questions are - if the area is booming, why have many houses there been on the market for 6 months or more, and since this one has been on for 3.5 months, why would they not take our offer seriously?
It is possible that the sellers don't consider 3.5 months on the market long enough to entertain an offer $50,000 under asking; or, to put in in another way, $40,000 less than the price your agent feels is correct.
It is also possible that the sellers have instructed their agent not to bother presenting offers to them which are X number of dollars below their asking.
What a buyer may think about the state of the market or the economy is irrrelevant. The seller is free to refuse to entertain low offers, and the buyer is free to offer only what they think a home is worth, and to move onto the next house if their offer is not entertained.
If The Woodlands is really booming and there are many other houses that have been on the market 6 months or more, your best bet is probably to make an offer on another house that's been sitting longer and see what response you get from those sellers.
Is your agent also the listing agent on the house? If so, that might be part of the problem. At the very least, have your agent run some recent sold comps for you. How does this house compare? Also, find out the average days on market in Woodlands and find out the average % sell price compared to list price. This will give you a good idea about how "hot" the market is, and whether or not your offer will be taken seriously.
I'm totally unfamiliar with the Woodlands, TX market, but in my market your offer would definitely be considered a valid offer.
and that she won't even put our offer to the sellers as it is not one to be taken seriously.
As stated above, even if your offer is a verbal offer, she is obligated to present the offer UNLESS (also stated above) she has in writing, generally via the listing agreement, that she is not to present verbal offers or offers under a certain amount. Otherwise, she's obligated to do so or step aside and let your Realtor® present the offer. Again, as stated above, if you know the pricing is $40K below the comps (as per your own Realtor®) and are already prepared to be negotiating I'm not sure why you would be starting so low...but that is neither here nor there, except it could alienate the sellers.
If the seller is non-distressed and has made that fact known to agents, then perhaps your agent has insight into the situation. Still, it's your right to offer whatever you want, just as it's the seller's right to entertain, or not entertain, it.
I recently sold a property that was in a great location-- just one not convenient for me. I priced the home more than fairly and told the agent I wasn't very flexible on price and didn't want to be bothered with lowball offers. I didn't have to sell, I wouldn't sell below a certain price and I didn't want to waste time on bottomfishers who were trying to see how low I would go. Time is money, and not all sellers want to play the lowball-then-negotiate-up game when they have a desirable property priced in line with the comps. Buyers using that strategy on sellers not receptive to it are wasting their time, their agent's time and the LA's time.
It all comes down to "know your seller." When you have an idea what their situation is and how flexible they are, you'll know how to structure your offer. If your agent is a good one, she can have a conversation with the LA, then write your offer accordingly. It may well be that similar offers have been rejected or not encouraged, and your agent is simply trying to save everyone some time or present you, as a serious buyer, in the best possible light. Good luck!
By law, all offers no matter how ridiculous must be presented. Most agents will advise when you are way off the mark, but some people just do not listen.
Why oh why are you, the buyer, working with the listing agent?
Get your own agent who will pull the comps, the story and defend your offer based upon facts of The Woodlands market. Maybe the market supports your offer- maybe not.
Knowing the owner's motivation, if and why the owners are planning to move, is critical. It's amazing what neighbors will tell you.
Once again, I TOTALLY agree with middle-aged mom! I'd have repped you...but I guess I have to spread the love first.
The listing agent's job is to get the best deal for THEIR seller. You need to have YOUR OWN Realtor working for you; gather the data, conduct some analysis, and help you develop a good negotiating strategy.
There are only TWO ways to determine the absolute value of a house on the market:
(1) The price at which a QUALIFIED buyer is willing to buy it OR
(2) The price at which a SELLEr is willing to continue to own it.
You are making an offer that you feel is valid - the Seller's Agent is (and this may be something different in other states so I'll say "generally") required to present ALL offers (reasonable in their opinion or not) to the Seller.
Good luck.
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