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I am in the middle of negotiating on a house in NH, in the Exeter area. The negotiations are about to fall apart, and I feel the sellers are just too unreasonable about what they want.
Details are:
House appreciated with two sales from the year 2000-2003, from 305k to 385k. The current sellers bought at 385k in 2003 and are now asking 430k. They put in ~40k in upgrades and the house is in pristine condition on the inside and out.
The problem is that it's the nicest hosue on the block, which I see as a negative. It's in a very upscale town, however the block has smaller houses (well kept) and the beginning of the block isn't great to look at (some power distribution lines cross the beginning of the block before going behind the street. It is a dead end street, which is a plus.
At this point I've offered $410k with $6k cash back for closing costs and agent's fees. They've come down a bit, but not as much as we've come up. Our original offer was net low 380s. We stood firm and they now want to meet "in the middle" at $415k with 5500 back.
Our agent (buyer's agent) can find NO comps in the area that support their price. Even at our current offer, they are recouping some of their upgrades and assuming a flat value on their original paid price. We on the other hand are losing $75k in our home, and we're coming from an even better known and more expensive town. Why are they expecting to get so much?
One other factor is that this home has never (in the past 12 years and 3 sales) been on the market more than 30 days, and this would be the 4th sale if we buy it to keep that streak alive. I'm mostly worried about buying too high in this market.
Are they being reasonable, or are we being reasonable? At this point they'd sell it probably for another $5k, but I feel we've already gone $4k over our original mental limit of $405k.
Any thoughts? I can go to a very closeby neighborhood for $455k and have a house that is amongst neighbors with $600k houses, and have much better protection on my investment. I just feel like they are asking too much.
If you are over your comfort limit, back away. We were in the same situation (best house in the neighborhood, lots of very nice upgrades, no real comps, but the house was priced $60k over the rest ofthe neighborhood).
Needless to say, we backed off after going back and forth and having an inspection - the guy wasn't willing to replace his italian marble floors in order to replace very poor plumbing. The house was taken off the market - my husband was a bit upset for a while, because the house was beautiful. Just yesterday, I was checking out that particular neighborhood again just for fun online, and sure enough, there was another house up for sale, just down the block, with slightly bigger sqft, a MUCH nicer layout, and a blank slate - for $60k less than the first house. Plus, it was on a cul-de-saq, which the first wasn't.
Did this house have italian marble floors, or a "custom kitchen?" No. But the master BR was much nicer, the layout was prettier, and the price was such that you could put your own stamp on the house. Showed it to my husband, and he feels much better, haha.
What is the market doing in the area? Is it trending down or is it appreciating?
In an appreciating market, buying a home for slightly over the comps would make sense if you really want the house.
In a declining market, you are taking on a great deal of risk by paying over the most recent comp. Even if you had a comp that was only 30 days old, you can figure they actually went under contract 60 - 90 days prior to the closing. Then you figure by the time you close, another 60 days elapses. If homes are dropping even just 2% per month, you may be paying 8 to 10% over the value of the home by the time you close. In a declining market, comps become the "ceiling" of what homes are worth and you should be buying under the comps.
That being said, if you love the home and intend to stay there for many years, it may be worth it to you. But, if it were me, I would walk (if it is a declining market). No matter how much I anticipate staying in a home "forever", life is too unpredictable.
We are in a similar situation. The Philly market is trending slightly down and just started declining this past fall/spring. Most sellers are not willing to budge under comps and I just can't purchase such a large investment and take the chance of losing 10% of my money. We unfortunately bought a home in Florida that we intended to stay in forever and then life had a different plan for us. We learned the hard way!
I don't know how your market works, but mine was formerly "immune" to the downturn due to all the government jobs. Now it's dropping like a rock. I can't tell you what I'd do in your area, but if you were negotiating in my area I'd walk away if I were you. Walk away, sit back and relax, and look around for a few weeks. Let this seller sit and wait for a month or so. The current market is a game of chicken here. It's all about who will cave in first. A lot of sellers are trying to get top dollar, getting great first offers from experienced lookers, rejecting them, and then winding up selling months later for way below the first offer. If you don't find something better than this house, then go back after a month or so and put another offer in below your comfort level again. After the seller has had to hurry around for showings, stress about being on the market for a while, and re-evaluate their price then you might see some flexibility show up if they actually want to sell. If not, there will always be another house no matter how impossible that seems.
Of course, this is only what I'd personally do. If you really want that house now then you're going to have to flinch. Otherwise, play the game and wait them out.
I am in the middle of negotiating on a house in NH, in the Exeter area. The negotiations are about to fall apart, and I feel the sellers are just too unreasonable about what they want.
Details are:
House appreciated with two sales from the year 2000-2003, from 305k to 385k. The current sellers bought at 385k in 2003 and are now asking 430k. They put in ~40k in upgrades and the house is in pristine condition on the inside and out.
The problem is that it's the nicest hosue on the block, which I see as a negative. It's in a very upscale town, however the block has smaller houses (well kept) and the beginning of the block isn't great to look at (some power distribution lines cross the beginning of the block before going behind the street. It is a dead end street, which is a plus.
At this point I've offered $410k with $6k cash back for closing costs and agent's fees. They've come down a bit, but not as much as we've come up. Our original offer was net low 380s. We stood firm and they now want to meet "in the middle" at $415k with 5500 back.
Our agent (buyer's agent) can find NO comps in the area that support their price. Even at our current offer, they are recouping some of their upgrades and assuming a flat value on their original paid price. We on the other hand are losing $75k in our home, and we're coming from an even better known and more expensive town. Why are they expecting to get so much?
One other factor is that this home has never (in the past 12 years and 3 sales) been on the market more than 30 days, and this would be the 4th sale if we buy it to keep that streak alive. I'm mostly worried about buying too high in this market.
Are they being reasonable, or are we being reasonable? At this point they'd sell it probably for another $5k, but I feel we've already gone $4k over our original mental limit of $405k.
Any thoughts? I can go to a very closeby neighborhood for $455k and have a house that is amongst neighbors with $600k houses, and have much better protection on my investment. I just feel like they are asking too much.
It's tough to give you a dead on, 100% correct answer without having boots on the ground in your particular market.
What you're losing on your house and what they want to sell theirs for has nothing to do with one another. Why are they expecting so much? Because that's what they feel their house is worth. If what they feel their house is worth can't be substantiated, it really doesn't even matter ... they want what they want when they want it.
I feel for you, and you have some valid points, but other stuff that you have to just put out of your mind, for immediate success and long term sanity.
You CAN NOT let what you sold your house for effect your negotiation. This is not a "new car store" where you can make up the difference on the "trade in". Thinking that way will harm your ability to address the true worth of the home your are considering.
I also understand your concern over "nicest home on the block". In some areas this can mean the house is TOO NICE to support any future appreciation / over improved, but to me that is NOT the case here. If the other homes are well maintained you must evaluate the liklihood that someday they maybe NICER than the home you are considering. Of course NOTHING is a guarantee, and you are really playing with LOTS of hypotheticals -- are the other homes so much smaller that is likely they would become rentals? That no one would would ever buy them as "upgrades" from a less desirable area? What about that other street, with the $600K homes? Same schools attendance area? Similar convience to town / commuting / parks? All things that you AND YOUR AGENT should be working on!
I would be VERY concerned in these economic conditions if your agent CANNOT find any comps to support the price the sellers want. This will KILL YOUR ability to get financing! If the sellers are made aware of this HOPEFULLY they will realize that delays are NOT going to work for your OR them!
I would be HAPPY that the home has sold QUICKLY when ever it has been on the market -- this suggests that others have found it appealing and your should also have NO PROBLEM selling some day down the road!
The opposite situation is to be considering a "white elephant" that suggest you may be the only person crazy enough to buy such a monster. VERY dangerous!!!!
If you are confident that you can FINANCE the extra $5000 and that is all that you need to "close the deal" then I would advise you to do so at the price levels you are considering. The alternatives are not good...
I feel your pain. I found a house I liked last week. Been on the market for 90 days. Originally priced at $350,000 and now down to $305,000. Very recent comps indicate it should sell for about $250,000. It has a really nice yard but the interior could use a few updates.
I offered $260,000 and was shut down...told not to even bother with a formal offer. Apparently the seller turned down $275,000 when it was first listed at $350,000. I only offered above comps because I'm sick of looking and want to buy now.
A realtor who did a preview the day before I saw it told her realtor it is "way overpriced" even at $305,000.
It is a relo and I have no idea how that plays into this but maybe someone here can shed some light on how that will work. I'm thinking if they can't sell they take the relo buyout and the relo company will relist lower. Is that how it works?
Anyway....I too am struggling as I so much want a house and I really liked this one.... but.... I'm in a seriously declining market and have to keep a level head about it.
I am in the middle of negotiating on a house in NH, in the Exeter area. The negotiations are about to fall apart, and I feel the sellers are just too unreasonable about what they want.
Details are:
House appreciated with two sales from the year 2000-2003, from 305k to 385k. The current sellers bought at 385k in 2003 and are now asking 430k. They put in ~40k in upgrades and the house is in pristine condition on the inside and out.
The problem is that it's the nicest hosue on the block, which I see as a negative. It's in a very upscale town, however the block has smaller houses (well kept) and the beginning of the block isn't great to look at (some power distribution lines cross the beginning of the block before going behind the street. It is a dead end street, which is a plus.
At this point I've offered $410k with $6k cash back for closing costs and agent's fees. They've come down a bit, but not as much as we've come up. Our original offer was net low 380s. We stood firm and they now want to meet "in the middle" at $415k with 5500 back.
Our agent (buyer's agent) can find NO comps in the area that support their price. Even at our current offer, they are recouping some of their upgrades and assuming a flat value on their original paid price. We on the other hand are losing $75k in our home, and we're coming from an even better known and more expensive town. Why are they expecting to get so much?
One other factor is that this home has never (in the past 12 years and 3 sales) been on the market more than 30 days, and this would be the 4th sale if we buy it to keep that streak alive. I'm mostly worried about buying too high in this market.
Are they being reasonable, or are we being reasonable? At this point they'd sell it probably for another $5k, but I feel we've already gone $4k over our original mental limit of $405k.
Any thoughts? I can go to a very closeby neighborhood for $455k and have a house that is amongst neighbors with $600k houses, and have much better protection on my investment. I just feel like they are asking too much.
Maybe you should do this. Never buy the biggest house on the block.
You just might have to back away and look for another property.
The seller has the right, reasonable or not (subjective), to hold to a particular price and lose the sale.
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