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This is mostly to vent and to ask - "is this common?"
We made an offer on a house - house was originally listed at $395,000, then dropped to $385,000. There is a very similar house - the same model, but with some remodeling, and finished basement - for sale in the subdivision for 400K, has been under contract for couple of weeks now.
I think the house we made an offer on dropped in price just when the one for 400K came on a market - makes sense, they were too closely priced, and the one for 400K would be clearly a better value with finished basement.
This one doesn't have a finished basement, but is in a good shape overall - new heater, new roof, some upgrades like solid wood doors, hardwood floors on the first floor (most houses in this price range have hardwood on the main floor). The comps sold anywhere between $360K and $410K (this higher end was backing to the open space, so really probably at least $15-20K more for that), but things are really picking up here, and we thought that if we make an offer at $375K it would be a fair price, or at least a starting point. We didn't want to offer much lower in hopes that higher price may make seller accept, and we don't have a counter offer.
Now, it was made known to us, that sellers were building a new home, and were flexible with move in date. They could stay past the closing date and do a lease back, if buyers were interested, or they could move out and rent for a while. (That's what their listing agent's email said, not mouth-to-mouth from one broker to another, our agent forwarded us their agent's email). Our current lease ends July 31st, but we knew that our landlords would be flexible (rental market is really hot here) and most certainly would find someone to take over the lease, as long as we give them proper notice.
So, we put June 15th as a closing and move in date on our offer, $375K as the price and sent it along. We didn't ask for closing costs or any other concessions, really. They are also taking washer/dryer with them (that's about $1000 value, I would guess), but this was noted on MLS sheet.
Here's what came back with a counter offer:
1) Sale price - $380K
2) Closing date of June 13th
3) Possession date - 6/13/2012 Subject to rent back agreement
"Sellers and Buyers shall enter into a Seller lease back agreement to lease the home from the Buyers after closing for $1000.00 per month until August 31, 2012. The total lease back rent to the Buyers will not exceed $3000.00."
According to our agent, this is not common and 99% sales are move in at possession.
I don't feel we have anything to negotiate - August 31st is not just past our lease (and our landlords wouldn't want to do month-to-month, we spoke to them, and they would want another year lease, with a possibility to move out once replacement is found), this is 2 weeks after kids start school, and moving in September, the busiest craziest month of the year for families with school-aged kids, is madness. Sellers didn't know we were renting.
But for us one of the benefits of buying early in the season, was to move in early, and enjoy summer in the bigger house.
Emotions aside - market rental price for this house is $2000. We rent in the neighborhood this house is in, and we know what houses rent for. So, 2,5 months*1000 loss = $2.5K. Basically, they are selling for $382,500 at this point. On top of it they live there as now tenants, not owners, for 2.5 months, and there is no deposit.
I felt disappointment yesterday, but now I really only feel relief - I am glad to walk away. My husband says "let this die, and then make another offer in a couple of days", but I don't really know what we would offer - $380K and immediate move in? What would you do? It's a good value for $375,000 and possibly even for $380,000. $385,000 is really pushing it, I will eat myself alive for "overpaying". But lease back is not an option for us.
It's a negotiation. They're countering with the best case scenario for themselves. You should counter with the best case for yourselves. Change the terms of the lease back to match what would work for you and your lease situation, or eliminate it all together.
They did counter you, they are willing to deal. It won't hurt to give it another round.
It's a negotiation. They're countering with the best case scenario for themselves. You should counter with the best case for yourselves. Change the terms of the lease back to match what would work for you and your lease situation, or eliminate it all together.
They did counter you, they are willing to deal. It won't hurt to give it another round.
I feel that this will be a negotiation where we can't win - sellers are not in a hurry to sell, and we are in a hurry to buy. We will think about another offer with no lease back, possibly offering $377K and letting them know this is our best and final offer.
I feel that this will be a negotiation where we can't win - sellers are not in a hurry to sell, and we are in a hurry to buy. We will think about another offer with no lease back, possibly offering $377K and letting them know this is our best and final offer.
Well, it seems to me that you COULD work this out fairly easily. The offers made by each side are actually pretty close, and the rest is just minor details.
However, if you & the husband are so ready to just give up & walk away, maybe you don't really want this house?
If you have this thought process with every house you try and buy you may be looking for a very long time. You make an offer. They counter. You counter. Repeat until you can't come to an agreement or you do. But to not counter because you "feel" you can't win seems like a bad course.
Well, it seems to me that you COULD work this out fairly easily. The offers made by each side are actually pretty close, and the rest is just minor details.
However, if you & the husband are so ready to just give up & walk away, maybe you don't really want this house?
Bill, you may be right. It's not that "we don't want it". It's just too early in the season to commit to something, even with July 31st move out for our lease we still have until May 31st or so to find something (assuming 60 days to close). This house was not my first choice to even look at, but it turned out much nicer inside than what we've seen from the pictures, and we were ready to end our search early. This was the second house we looked at with our agent, not counting several open houses, where just two of us went.
In my area, lease-backs are typically handled by taking the buyer's new mortgage, dividing it out over 30 days and multiplying it by the number of days they want to stay. It doesn't matter what lease rates are in the area, as that shouldn't matter. You just want to be made whole by allowing the seller to stay longer, not make a profit.
In my area, lease-backs are typically handled by taking the buyer's new mortgage, dividing it out over 30 days and multiplying it by the number of days they want to stay. It doesn't matter what lease rates are in the area, as that shouldn't matter. You just want to be made whole by allowing the seller to stay longer, not make a profit.
Our payment will be approx. 1850, so their 1000 is way below. They could calculate our payment by looking at pre-approval letter - it stated the amount of the down payment. According to their agent (again, from his email), they offered 1000 because they could find a rental until their new house was built for 1000. They are an older couple with two dogs, so probably were looking at 1-2 bedroom condo or apartment that allows dogs. This is 4-bedroom house.
Anyway, this is a moot point, since we don't want to do a lease back, on any condition.
If you have this thought process with every house you try and buy you may be looking for a very long time. You make an offer. They counter. You counter. Repeat until you can't come to an agreement or you do. But to not counter because you "feel" you can't win seems like a bad course.
Thanks, this sounds reasonable. If we want to deal, we should make them another offer (we can't counter the counter-proposal, according to the local law it has to be a new offer). Now to figure out what we would offer . And we are probably not ready to do it before 6 pm tonight (that's the deadline).
Thanks, this sounds reasonable. If we want to deal, we should make them another offer (we can't counter the counter-proposal, according to the local law it has to be a new offer). Now to figure out what we would offer . And we are probably not ready to do it before 6 pm tonight (that's the deadline).
Several things confuse me about this post;
First, where are you that there is a LAW preventing you from counter-offering a counter offer? That's one of the most bizarre things I've heard. a negotiation is often a process involving for or five or ten different counter offers. Perhaps you or your agent are misunderstanding something?
Second, if there is in fact a law that says you must now write a new offer, how can there possibly be a deadline for doing so?
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. And we are probably not ready to do it before 6 pm tonight (that's the deadline).
