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I've been looking at houses for over a year now. I consider myself an "ideal" buyer in the sense that I'm paying cash if the house is under $200,000, and I'll borrow a little if I go over that amount, but my limit is $250,000. I don't have to sell a house and I can move/close whenever the seller wants.
I offered on a house in April of 2010. My "lowball" offer was countered a few times and eventually the countering stopped when I hit my ceiling. The house now is being offered for $25,000 less than the "ceiling" amount I offered and they refused last year.
However, now, I like another house a lot more. This house came on the market in August at $219,000, I offered $173,000 on it in October, and I was "laughed at"... with no counter. The house is still on the market (8 months now), and the usual time on market in the area is about 91 days.
My realtor from last year is no longer my realtor because she refused to provide me with CMAs, leaving me completely on my own to determine offer amounts. She basically told me that the listing agent already did a CMA to set the list price. I hope you can see why I am no longer using this realtor.
However, the house is tough to price because it is an older home with a fairly good view. Homes of the same age/size without a view are under $120 in the area. Newer homes with a view of the same size are around $160-170 in the area. The house is in a weird area where one block over are older houses of under $100 and one block the other way are newer houses of around $280... but none of these houses seem to be selling at these list prices.
I've also compared tons of houses' sales prices with their tax appraisal from 2010, and 90% of the houses sell within $10,000 of their tax appraisal (over or under) and the other 10% are wildly off (over or under). Based on my own evaluation of comps and the tax appraisal of $161,000, I think the price of the house should be in the $150-160s.
So, here are my questions... I want to offer again, but how do I go about it? Should I go directly to the listing agent and offer? Would this cut some of the agent commission and maybe make my $173 offer a little more attractive?
Should I go through another realtor to make the offer? Should I get another realtor and ask him/her to do a CMA for me to make sure my calculations are good?
Should I "hide" the fact that I'm the person who made an offer of $173 before and start lower? Of course, I would love to get the house in the $160s.
Should I wait till after the Spring buying season is over and the sellers see that no one else is going to offer anywhere near their asking price? I truly believe that no one else will offer on this house at this price, or even lower mainly because it has an odd second floor that I find "funky", but would be impractical for a family.
I'm fully prepared to be "laughed at" again, but I'm hoping that the sellers are more realistic now that the house has just sat there for so long. Oh, and they've only lowered the price once (in November) by $5000.
The fact that they have only lowered the price once for 5k kind of tells you that you "hoping that the sellers are more realistic now" is probably not going to get you very far.
But on the other hand you have nothing to lose. Keep in mind though they obviously will know it is you as soon as you make the offer so Im not sure what you mean when you ask if you should "hide" the fact you made an offer before.
And lastly I would use an agent. Hopefully one that is better than your last agent.
If they only lowered the price by $5000 I doubt they're anymore realistic.
I sometimes have a hard time understanding some sellers. I see houses all the time that have been on the market for 2 years with different agents. It's like sellers think it's the agent's fault their house didn't sell instead of realizing they're asking too much is the problem. I just don't understand the agents either though, if another agent couldn't get it sold why do they think they can?
If they only lowered the price by $5000 I doubt they're anymore realistic.
I sometimes have a hard time understanding some sellers. I see houses all the time that have been on the market for 2 years with different agents. It's like sellers think it's the agent's fault their house didn't sell instead of realizing they're asking too much is the problem. I just don't understand the agents either though, if another agent couldn't get it sold why do they think they can?
We had our house on and off the market for a little over 2 years. We switched agents about half way through. We never really lowered the list price much the entire time. Yet the second agent was able to get it sold.
Was it just random luck? Would the first agent have gotten it sold? I'll never know. But we felt like we needed a change to get something going.
Keep in mind though they obviously will know it is you as soon as you make the offer so Im not sure what you mean when you ask if you should "hide" the fact you made an offer before.
The offer was never in writing. I was literally driving to my realtor's office after a night to "think about it" to write up the official offer, and my realtor called the seller's agent to let her know we were preparing an offer and what my top price was going to be, and so the "offer" never got beyond phone calls, so I'm not sure that the sellers or the sellers' agent know my name.
I completely agree about the sellers only dropping the price by $5000. I really think it's an unrealistic price. Other than these two houses I've offered on, I liked three others (not enough to offer on them), and I've watched all three plummet in price, one by over 50% (but it began as a short sale).
This is the house I want, but I'm not going to overpay for it. I'm perfectly willing and able to wait another year. I doubt prices will go up by much, and I expect that they'll either stabilize or drop further in the area.
I don't believe that going directly to the listing (seller's) agent will reduce the commission paid, unless the listing agent might agree with the seller to reduce his commission percentage by a point to get the seller to accept the offer. This does sometimes happen, especially when the listing agent is dealing directly with the buyer.
When I was selling real estate 30 years ago there were (almost) no "buyer's agents". (I still don't really understand the concept as it is today.) If a buyer came to me and wanted to purchase one of my listings, I was willing to negotiate a point off the commission if necessary, as it would still be a very good commission for me.
Make no mistake; I was working only for the seller. If the buyer offered more than necessary to purchase a property, I could not legally suggest that he offer less. And that's what I don't understand about "buyer's agents". Can they? I don't know. When I was in the trade, a buyer could hire me to work for him, but then the BUYER paid me the commission, not the seller. (This was most often done for commercial and ranch properties.)
Sometimes people can't sell at the lowest price because of what they owe on the house. Are you able to see what their mortgage is on the place? That may give you an idea why they aren't moving that much on the price or if they would need to short sale at a certain price point. I don't see why, if you think the place is worth the $173K that originally was refused, you would start at $160K. Why sabotage the deal before you even write it up?
I think you are still lacking the proper information needed to develop an offer. You really do need to get comps and get your head around the value of this property. Hire a new agent based on the fact that this agent will get you comps. Interview a few, tell them you have a keen interest in a specific property and you are seeking an agent to present your offer once you have prepared an offer you feel is appropriate based on the information they will provide you about comps. Don't engage an agent unless s/he commits to providing you the kind of information you need to work up an offer.
...If the buyer offered more than necessary to purchase a property, I could not legally suggest that he offer less. And that's what I don't understand about "buyer's agents". Can they? ...
Yes, and the buyer's agent should if it's in the buyer's interest to do so. A buyer's agent has a fiduciary duty to the buyer, not the seller.
I think you are still lacking the proper information needed to develop an offer. You really do need to get comps and get your head around the value of this property. Hire a new agent based on the fact that this agent will get you comps.
I'm tempted to just pay for an appraisal because I've looked at every comp as well as active listing for the past two years in the area, and obviously, I can't determine if there were any structural, family, etc. issues that impacted the sales price, but based on what I can see (having viewed the homes that later sold), I really do think the house should be in the $150-160 range, which is why $173 is my absolute top price (because I like it so much) unless someone shows me otherwise.
It sounds like I'll find a new agent and specifically ask about this property and comps, indicating that I want to put an offer in... again.
Still, should I wait until the summer after the Spring "buying season" is over? If someone else buys the house, great for them; I won't be upset if I lose the house. Of course, I really don't think anyone is going to offer and I really don't think anyone will offer much on the house. I've noticed that the older homes sit the longest on the market. Most people in this area are looking for newer homes suitable for families, and this house is really only suitable for a couple or single person. It's really one of those houses that needs just the "right" kind of buyer (would not appeal to most buyers), but I like its quirky aspects, so I suppose I am the "right" buyer for the house... except the price!
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