House sale price just dropped $5K. Bad to make a lower offer?

[Ultrarunner]

Never offer more than you are comfortable.

As stated... the worst is NO and you are out your time and effort.

What has happened to me is I do all the legwork and submit my offer... the negotiations start and I reach my highest and best offer and then someone else comes in $1,000 more and the deal is done.

I know it goes against all conventional wisdom on the board...

Most of my successes have been striking up a rapport with the owner... I have no qualms knocking on the door or sending a letter to let the seller know my position.

Hey, it works for me.

[jackmichigan]

Originally Posted by jackmichigan

If you plan to pay cash, however, what closing costs would you be asking them to cover?

Originally Posted by Sky-Blue

The backyard is missing about 150 feet of fencing in the backyard to enclose it on the fourth side (on a property line between the next door neighbor)...
...I'd ask for part of the expenses to install this side of the fence and gate.

Well, that's not really a closing cost. You could treat it as a credit against the purchase price...or you could ask them to install the fence before closing. I guess you could consider it an "enclosing" cost.

[jojow]

Originally Posted by Sky-Blue

The backyard is missing about 150 feet of fencing in the backyard to enclose it on the fourth side (on a property line between the next door neighbor). Anyone can just walk right into this house's backyard through the huge gap. Yet, 27 years of previous ownership and they never got around to putting up the fourth side of the fence? I'd ask for part of the expenses to install this side of the fence and gate.


I'm starting to believe that this was a psych trick played on me by my own buyer's agent. Trying to make me see what a bargain the house really is at 195K when it was 'supposed' to be $208K.

I personally would not recommend asking them to fix the fence. Having a fence is not a requirement of using the property. If you were buying a house without a fence at all would you ask them to fence it?

Asking them to add the fence is just one more thing to discourage the sellers.

Make your offer as strong as you can. Cash, as you said, no closing costs, quick closing. If you have the cash, I don't see why you need closing costs. Just offer that much less for the sales price. You can finish the fence yourself.

A seller who is already over priced and wants to hold tight to that price is going to be pretty annoyed if you ask them to finish a fence. It is not going to make your offer attractive.

[Species 8472]

Originally Posted by Sky-Blue

A house that's on my saved property list just dropped $5K to $194,900. It had been sitting for two months with no change in status. This house was already priced above two neighborhood comps $187K/$190K that are on the market. However, this house is on a lesser traveled street; but there isn't a complete fence surrounding the back yard yet. And the present owner has lived there for twenty seven years; there could be sentimental value inflating the original $199,900 price. So I wasn't willing to overpay, and I have just kept an eye on this listing. Now that it's dropped the $5K, I feel the seller is willing to negotiate.

This afternoon, I talked with my buyer's agent about an offering price: I would like to offer about $183K-$187K. Or at least start the negotiations at $185,000 (and ask for them to cover some closing costs). My buyer's agent says that since they have already lowered the price, they will probably reject any offer much lower than $195K.

Is a lowered price the new point of negotiation (it's standard to offer less)? Or, is the lowered price what the buyer needs to offer to have it accepted since the seller has already "compromised" first?

One other thing that may be affecting this: My exclusive representation contract with the buyer's agent expires in October. (I will only extend it if we are in the middle of a deal; otherwise I will probably pick a new buyer's agent). One silent fear I have is this buyer's agent is trying to get me to bid high so the offer will be accepted ASAP before his exclusive deal with me runs out.

Here's the best advice on presenting an offer--

Don't even listen to your broker's perspective. Just ask for any and all comparable sales over the past year and make a low offer that allows you room for negotiation and within the comp range.

I've had buying brokers tell me that the seller's bottom line price is $700k and I've gotten properties for $30 ki less.

Just tell the broker your price and don't buy the BS that you will "insult" the seller if you make a lowball offer. The property has been sitting for 2 months and we're now outside of the peak real estate season. Don't bid too high or you'll feel badly about the price and will likely back out anyway. Once you make the offer, then let the buying broker do their job and get the property for you. The less the buying broker knows about your bottom line price, the better off you will be. Good luck.