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Okay you only have $400,000 to work with. You offer $400,000 and see what happens, the worst they can do is say no. I've had more than one say yes. I hate people who say "oh you should lower your price" or Oh you should offer more than that" without making a written offer. Until you have a written offer you have diddle
Good point. I'd buy the place easy for 525k and 4% in seller concessions... but I like your 400k idea.
Hopefully your agent has been advising you as to the current market value of the homes based on recent sold comps.You should base your offer on those values and not the listed prices. Your agent may also be able to do some research in the MLS for the homes you saw sold on Realtor.com to get the real story.
Thanks for the interest!
We know the most recent comp is 85,000, but that was last summer. (These are all very similar semi-detached homes--the two I mention that sold for less were smaller, so they don't count as comps.)
We have had two and a half frustrating years of making lowish offers based on comps, being turned down, and seeing the house sell six months later for even less, (or maybe being taken off the market.)
Someone told me it is all timing--they were insulted by my offer, but six months later an even lower offer was not insulting.
Somebody is getting the good deal--but not me! Maybe it is because I always jump on the listing as soon as it comes out ...
My poor agent has worked for two years for no money, so I want to do the work on my own, and just call her in when the time to make her commission has come! She has earned it, and if she does any more work, it will be for ten dollars an hour.
as someone who has been on both sides of low offers I'll offer my comment
A seller has to come to the conclusion their house is worth less than asking on their own accord, not by your offer.
it can list today at 200K and really be worth 140K. you make an offer of 150K on this property tomorrow. it will sell for the 140K 1 yr later, but it takes the seller that year to realize that they should have taken your 150K offer.
basically if you come in at the beginning you won't get the house in these situations.
I find in my area houses sell for close to last list. the list price has to come down to a reasonable amount before the seller is willing to sell for whatever price.
as someone who has been on both sides of low offers I'll offer my comment
A seller has to come to the conclusion their house is worth less than asking on their own accord, not by your offer.
it can list today at 200K and really be worth 140K. you make an offer of 150K on this property tomorrow. it will sell for the 140K 1 yr later, but it takes the seller that year to realize that they should have taken your 150K offer.
basically if you come in at the beginning you won't get the house in these situations.
I find in my area houses sell for close to last list. the list price has to come down to a reasonable amount before the seller is willing to sell for whatever price.
Unfortunatley, I agree. And, though the market isn't horrible around here, I still think people could save themselves a LOT of time and grief if they priced their homes with comps, lot, location, etc in mind from the start. Why price it 30k over what you can reasonably expect to sell it for? Unless it's just in anticipation of lower offers and you KNOW you plan to deal, it doesn't make much sense. Houses that sit forever become tainted. There's a house we loved that was on the market for 3 years. We were only the 2nd couple in 3 years that put in a serious offer and honestly planned to buy... the people decided that they wanted even MORE for their home that they'd originally indicated that they were willing to sell for, so we walked.
Yanno what? It's still unsold. They took it off the market to let it "breathe."
Any reasonable search by a buyer would discover that it was on the market for 3 years straight without a buyer, so I have no clue what they're thinking.
Location: When you take flak it means you are on target
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I know agents will hate to hear this, but as an investor I take the shotgun approach. I find a neighborhood that has potential then I blast low ball offers on everything that meets my specs and see what shakes loose.
I'm not there to make friends. But I have cash and a crew and I am a certified home inspector, so we can move a deal fast IF someone really wants to sell. If not, well there were a million foreclosures last year and I only made offers on maybe 100 and I bought 5 - so I still have a LOT of people left to insult.
I do admit I avoid buying from resident sellers with or without an agent. I far prefer the bank and foreclosure hassles, at least we can make deals that make sense sometimes. When dealing with a resident seller they always have an over inflated sense of their value.
Me too. My house is worth about 2.5 million - it USED to be a 4 million dollar house. I THOUGHT it was still about a 3.5 million dollar house, until the house up the street sold for 2.4 (I have a better ocean view). Talk about a rude awakening. I can't wait for interest rates to go up so that I will have a 500K house... Sigh.
I know agents will hate to hear this, but as an investor I take the shotgun approach. I find a neighborhood that has potential then I blast low ball offers on everything that meets my specs and see what shakes loose.
I'm not there to make friends. But I have cash and a crew and I am a certified home inspector, so we can move a deal fast IF someone really wants to sell. If not, well there were a million foreclosures last year and I only made offers on maybe 100 and I bought 5 - so I still have a LOT of people left to insult.
I do admit I avoid buying from resident sellers with or without an agent. I far prefer the bank and foreclosure hassles, at least we can make deals that make sense sometimes. When dealing with a resident seller they always have an over inflated sense of their value.
Me too. My house is worth about 2.5 million - it USED to be a 4 million dollar house. I THOUGHT it was still about a 3.5 million dollar house, until the house up the street sold for 2.4 (I have a better ocean view). Talk about a rude awakening. I can't wait for interest rates to go up so that I will have a 500K house... Sigh.
You may not be happy about it, but at least you actually KNOW what your house is worth.
I was looking at a house the other day that is priced at 575k. All the comps in the neighborhood (smallish, built/planned by a team of a few custom builders) in the past 12 months have sold for 520k-555k and they were new construction.
Why does the seller think his house is actually worth 20k more than the most expensive house to sell there in 12 months' time? No clue. I've been in several houses in that neighborhood... the 555k house was on a cul de sac and backed by trees, with a larger yard than the 575k house that's got a smaller back yard and backs up to the road.
Weirdness.
On edit: What's even more unusual is that I don't sense that realtors want to make offers that are low... I don't see why not. Don't they train realtors to make lower offers sound enticing over in realtor school?
I'm really enjoying all the different perspectives in this thread, since my husband and I are first time buyers. I'd love to hear others' thoughts on our situation.
Many of the houses we've looked at are renovations in transitioning areas that will likely be quite desirable in several years due to proximity to downtown. However, it is very much house-by-house and street-by-street at this point.
One house we really like is priced at $250k (just over 1600 sq ft), slightly busy corner lot. The current owner is an investor who fully renovated it from a duplex to single family. It has been on the market for 130 days, no price reductions.
The latest comps in the area are as follows:
House 1 was fully renovated and sold in December for $168k (almost 1300 sq ft) - one block away in the middle of a quiet sidestreet.
House 2 was fully renovated and sold in November for $185k (just under 1700 sq ft) - one block away and next to House 1.
I would say all of these are comparable quality renovations and finishes (I was actually inside House 2 before it sold).
There is a large house three doors down that is being renovated, and one across the street from the house we're interested in that is for sale as-is (quite small and needs work) for $75k.
We like the house and were considering making a low offer, but our buyer's agent has cautioned us about "offending" the seller. Since the seller is a real estate investor, I think that she is probably well aware of the current market conditions and comps in the area (especially considering the most recent comps were sold by her listing agent). I thought about offering the average price/sqft of the two most recent sales, which would be about $195k. What do you think?
Thanks for any input!
Last edited by miamiblue; 02-15-2011 at 12:30 PM..
I'm really enjoying all the different perspectives in this thread, since my husband and I are first time buyers. I'd love to hear others' thoughts on our situation.
Many of the houses we've looked at are renovations in transitioning areas that will likely be quite desirable in several years due to proximity to downtown. However, it is very much house-by-house and street-by-street at this point.
One house we really like is priced at $250k (just over 1600 sq ft), slightly busy corner lot. The current owner is an investor who fully renovated it from a duplex to single family. It has been on the market for 130 days, no price reductions.
The latest comps in the area are as follows:
House 1 was fully renovated and sold in December for $168k (almost 1300 sq ft) - one block away in the middle of a quiet sidestreet.
House 2 was fully renovated and sold in November for $185k (just under 1700 sq ft) - one block away and next to House 1.
I would say all of these are comparable quality renovations and finishes (I was actually inside House 2 before it sold).
There is a large house three doors down that is being renovated, and one across the street from the house we're interested in that is for sale as-is (quite small and needs work) for $75k.
We like the house and were considering making a low offer, but our buyer's agent has cautioned us about "offending" the seller. Since the seller is a real estate investor, I think that she is probably well aware of the current market conditions and comps in the area (especially considering the most recent comps were sold by her listing agent). I thought about offering the average price/sqft of the two most recent sales, which would be about $195k. What do you think?
Thanks for any input!
Ask your buyers agent to stop worrying about offending the seller, and help you decide what is a realistic VALUE for the property. If the property is priced realistically, and you make a realistic offer, no one will be offended. If it's priced outrageously, it's better to offend the seller than to pay an outrageous price.
We like the house and were considering making a low offer, but our buyer's agent has cautioned us about "offending" the seller.
I do not understand this at all. Of course I am a RE outsider, but TBH I couldn't care less if an offer I tender "offends" someone.
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She has earned it, and if she does any more work, it will be for ten dollars an hour.
