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Unless you are in an absolute hurry, I would walk away for a while.
First of all, your offer was not "lowball.".
Sorry but for a home that had only been on the market 2 days, it was an extremely low offer.
Most sellers would not have considered it serious offer or him a serious buyer.
I forgot to mention this house only has ONE bedroom. Obviously most buyers are families. Hardly anyone wants a one bedroom house.
As for the listing agent sharing the listing price proposals with my buyers agent, I have no reason to doubt her word. She says in that area, it is standard practice and done by most realtors. They are in the same office, incidentally.
Well there's plenty to be said on both sides of the deal, but my bottom line would be one question:
A year from now, what will I regret more -- paying too much for the perfect house I live in, or having lost the perfect house/neighborhood over the price?
...if I could afford his asking price of course. I once bought a house I thought was overpriced, but I never regretted it because it was perfect for me and I loved it while I was there. But it could have gone horribly wrong too, if I were trapped there because of a mortgage payment.
I listed one of my property in 2011 when market was down, got only two offers and both 50-60k below asking. I took it off market and rented it out. In third week of march this year, listed it again at 25k higher then 2011 and sold it at asking. If I had to sell it, I would've but I didn't. My patience got me $85k and rent covered my expenses. Its all about what seller wants.
I believe the OP wants to take advantage of all upgrades that this house has, without paying for them. They weren't placed in the house for free. If he wants to pay the going rate for that style house, then perhaps he should buy one of those other places, and see what it costs to upgrade it to the condition that this dream house is in. I don't mean to sound nasty, but you can't get something for nothing.
I disagree with that this was a low ball offer. None of us know the details, all we can say is that the offer was well below list. If the house is grossly overpriced than his offer could actually be too high!
Just b/c a home is new on the market does not mean you need to offer close to asking. It is better to offer what you think it worth now, then waiting to see if it languishes for months. Wouldnt be the first time that home is overpriced out of the gate.
OP, if you are confident that you know the market, then you have to decide..overpay for something you love or walk away and call his bluff.
The listing agents comments about the sellers motivation should be taken with a grain of salt, would ignore.
I disagree with that this was a low ball offer. None of us know the details, all we can say is that the offer was well below list. If the house is grossly overpriced than his offer could actually be too high!
There was a reason the Seller priced it where he did and it may not have anything to do with reality.
Doesn't matter if you, I or the Buyer doesn't consider it a lowball offer. The Seller will because it is so low and the house was only on the market 2 days.
The only opinions that matter is the sellers (and buyers) and I can guarantee the seller thought the offer was way to low. Or he would not told the buyer to take a hike.
What strategy should I adopt? Just walk away or wait him out? I am willing to pay up to $505,000 and will overpay to live in a beautiful neighborhood in a highly desirable community.
First of all, I wouldn't consider $475,000 a low-ball offer if it was based on comps...but I doubt the Seller would see it that way. However, if you're already willing to pay $505,000, a listing price of $539,000 doesn't seem to be "grossly inflated" either.
The problem is that you desperately want to buy the house--and he apparently doesn't care whether he sells it right away. You will always be at a disadvantage in negotiations in that scenario. You either need to wait it out and see if he is open to a lower price down the road...or make your best offer now and be prepared to walk away if he doesn't accept (or you could make close to your best offer, leaving a little room for further negotiations...but you still need to be willing to walk away).
Another tact might be to see if he'll take $1,000 (or whatever) to give you a Right-of-First-Refusal. That way, you'll be given a chance to match any legitimate offer which comes along that he is prepared to accept. He'll be in the position of having a permanent back-up offer, which only strenghthens his hand...and he can go out for a nice dinner. Of course, he may not want the extra hassle, but it may be an option to try.
A outright Right-of-First-Refusal is not as common with residential properties and there are some drawbacks. A Seller will likely use such a Right to elicit an even higher offer from another potential purchaser; or a Seller could even fabricate an offer to get you to match such an "offer". But, it can be a useful tool. Just try to get any payment applied towards the purchase price, but if you don't end up matching the offer you'll be out whatever amount you pay for such a Right. Get an attorney to help you craft a Right-of-First-Refusal and make sure it--or evidence of it--gets recorded.
Otherwise, just make your best offer and be prepared to walk. But, before you do, think realistically about the house. If it's only 1 bedroom, how easily will you be able to sell it when the time comes? Don't let your emotions get the best of you.
Last edited by jackmichigan; 05-23-2013 at 07:29 AM..
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