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Old 07-14-2013, 08:40 PM
 
114 posts, read 200,477 times
Reputation: 54

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I am considering making an offer on a home that is for sale via word of mouth from friends and neighbors of the owners. It is not listed with a realtor and not listed in anyway yet, not even the official FSBO. From what I have gathered from neighbors is the owners want to sell to a family, the right people, etc. They currently own a large property several states away that they are retiring to and also have an apartment in the NYC/NJ area. Basically the home I am interested in not at the top of their priorities.

The only comp in the neighborhood comes from about a year ago from a bank owned home and sold for 439K. Zillow has the home at 493K. Owner did major maintenance 5 years ago, new roof, new gutters, new kitchen, new AC unit, new heater. All the stuff that doesn't appeal to the eye when looking at the home. With these "upgrades" the owner said 600K if they have to list with a realtor and 575K without a realtor.

I get the feeling from the neighbors that he is not looking to make a ton of money on the home (been there 14 years bought for 370K), is in no rush to sell and can be very flexible in the closing dates. Yet his price is high to say the least. Realtor friend of mine mentioned it would appraise for about 520 for mortgage purposes. With the only comp at 439 and pretty much the entire home needing updating/renovations I don't see anything over 500K to be honest. Yes it is a great lot in the best school district around which can justify the price but the home is dated.

Aside from all the contingencies, how would you negotiate this offer? Would you send all the area comps justifying the 490K offer? Would you simply have a conversation about the dated nature of the home (don't want to offend or insult the owner at all)? Do you mention all the planned renovations?

Just curious how you would negotiate an offer with a laid back in no rush to sell seller?
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Old 07-14-2013, 09:26 PM
 
Location: NJ
17,578 posts, read 44,100,084 times
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Ask him if you can get an appraisal.
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Old 07-14-2013, 09:37 PM
 
1,939 posts, read 1,949,913 times
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I know someone now who is trying to trying to sell their house this way. I know the seller and the buyer. The buyer was excited until they heard the price - it is very unrealistic, no comps to support it and it won't appraise. It is a very emotional sale and I am sure this is clouding their clarity on price, plus they aren't in a hurry. I also think they are hoping to sell without a realtor, which means there isn't someone to bring reality into the picture.

All that said, the buyer pulled all the comps and knows the price is way high. They have asked for an appraisal and told the seller they will make an offer after seeing it. I don't think it was rude; it was a very reasonable request and the seller was not offended at all. The buyer is not going to mention all the repairs and updates that need to be done. It would serve no purpose.
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Old 07-14-2013, 10:56 PM
 
Location: Kailua Kona, HI
3,199 posts, read 12,794,099 times
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In order to diffuse this emotional, unrealistic seller, I would get a realtor with whom you have a good relationship prepare a CMA and then submit a formal written Purchase Contract. (Contingencies include: Subject to appraisal, subject to buyer obtaining a mortgage with terms and conditions that are acceptable to him, etc) Forget the word of mouth, FSBO, owner thinks this or that, and approach this as you would any other major transaction - like a professional. No ones "feelings" have a dollar amount on them.

If indeed, this is one of those owners who has unrealistic, romantic notions about their property's worth you may be spinning your wheels but it's the only way to go.
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Old 07-15-2013, 05:12 AM
 
Location: Phoenix, AZ > Raleigh, NC
18,411 posts, read 24,659,748 times
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KonaKat, I personally agree with you, but the buyer better be prepared to pay the realtor their commission himself. And include that in the offer. At this stage, the seller would refuse.
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Old 07-15-2013, 06:10 AM
 
3,419 posts, read 6,985,537 times
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> Aside from all the contingencies, how would you negotiate this offer?

You offer what you feel comfortable with, considering comparables and what you are willing to spend.

> Would you send all the area comps justifying the 490K offer?

This will make not a whit of difference. Don't bother.

< no rush to sell

High word of mouth price, lower comparables, no hurry to sell. This has "long time to sell" written all of it. Stay away unless you are in no hurry yourself.

> the owners want to sell to a family, the right people, etc.

Maybe this is why no realtor is involved, because this could be against the law.
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Old 07-15-2013, 08:25 AM
 
Location: Berkeley Neighborhood, Denver, CO USA
17,011 posts, read 26,634,938 times
Reputation: 30960
Default Are you crazy?!

Quote:
Originally Posted by SeaNile31 View Post
Zillow has the home at 493K.
You appear to think that a Zestimate is related to reality. Maybe we should ask Surbiton to chime in about Zestimates.
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Old 07-15-2013, 08:41 AM
 
114 posts, read 200,477 times
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My realtor who will list my home said the Zestimate is pretty accurate for the home, maybe off a few thousand one way or the other.

Think if I am going to pursue this an appraisal is the right way to start. It lets the owner know I am serious about the home and also confirms to me that I want to do this.
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Old 07-15-2013, 09:58 PM
 
Location: NC
502 posts, read 837,893 times
Reputation: 1130
Asking to see the house (to make sure you like it) and then ask to do an appraisal is the best place to start. You may also want to feel the sellers out and see what they say when you ask how they will respond if the appraisal is significantly less than their asking price. If they say with conviction that won't lower the price no matter what, it may not be worth wasting the money.

BTW, I don't think the owner gets "credit" for all the repairs he made. Most of that sounds like normal, required maintenance. It's not a dollar for dollar return. You can't take the amount you spend and add to the market value of the house - which is what it sounds like the sellers are doing.
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Old 07-16-2013, 12:44 PM
 
114 posts, read 200,477 times
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Just scheduled an appraisal for this weekend.
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