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We are considering a new approach and would like some feedback as to:
1. Whether this is a good idea
2. The best way to approach it
3. When to tell our realtor that this is what we'd like to do (should we send him an e-mail before the trip there or talk to him after we get there?) Next trip is in 2 weeks.
What we are considering trying: There is a neighborhood we really like. There are three houses for sale, all of which we would enjoy living in. We have toured each of them, and they've all passed our basic eyeball inspection.
Each one has been for sale at least 6 months, one for more than 9 months. The problem is they are all listed at about the same price--and that price hovers about $40K more than we have in our budget. Realtor said in passing during our last trip that all 3 were over priced. (I'm guessing they must have used each other as comps).
We'd like to make the same lowball offer to each seller, in the hopes that one of them might be ready to take a price that's $40K below what they're asking.
I'd like suggestions on the best way to do something like this. We couldn't make an offer to multiple houses at the same time, could we? (Seems like that might be illegal or something.) Can we set up an agreement with the realtor that the moment a negative reply comes in for the first house, he should turn around and make the offer for house #2? Also, any thoughts on which house to approach first? We could start with the one that was listed the longest, or maybe the one with the lowest price.
They each have pros and cons so we really don't have a favorite. Plus, I'm kind of afraid to choose a favorite because then I'll get emotionally attached to one (and then be disappointed if another one, or maybe none of them,.go for our offer). Basically, whichever one accepts our offer will automatically become our favorite (assuming, of course, that any of them accepts it).
There are three houses for sale, all of which we would enjoy living in.
We have toured each of them, and they've all passed our basic eyeball inspection.
Are you financially prepared to follow through with the inspection/closing etc immediately?
Then sure... make any offer you like and do all three simultaneously too.
But you'll need to include a "time is of the essence" clause which tells the seller why
they have to take your lowball offer as well as to rush their decision.
It might work too but the seller of house #1 will still want some protection that if he agrees to
your price/terms FIRST that he "wins" and you'll be obliged to follow through promptly...
rather than to wait for seller #2 or #3 to make their decision or any other reason to delay acceptance.
otoh... if the three sellers know each other they are just as likely to tell you to pound sand.
If Tom accepts the reduced price he essentially forces his golf buddies Dick & Harry to do the same with the next buyer.
That's a tough sell.
It all hinges on whether the properties really are overpriced (to that degree)..
and if the sellers can finally be convinced of it. By someone.
Last edited by MrRational; 03-03-2017 at 08:36 AM..
We followed a similar approach when we purchased our last house. Granted that was 2011, so buyers had more power then.
We narrowed it down to two acceptable houses. Sat down with our realtor and wrote offers on both. We picked the house we liked a bit more than the other, and the realtor presented the offer on that one first. It had a 24 hour deadline, and he made it known that anything less than an accepted offer would result in us moving on to the second house. If the second house also countered, then we would come back to the first one and consider their counter. Hopefully that makes sense. We basically were trying to play the two sellers against each other.
Anyway, the first homeowner countered. We presented our offer to the second - they accepted.
It worked well for us. But not might be as successful in a hot market.
Very close yes, like the other person said give them 24 hours. I'm not an expert but from my understanding an offer is a contract to proceed with the purchase so I would not submit 3 at the same time or if all 3 are accepted you will have to buy all 3 or figure out some kind of settlement to get out of the contract.
In my area, a buyer can walk for no reason up until the inspection contingency is done, so you could do this, and then if more than one are accepted, walk on the ones you don't want, with no risk. The only thing is that you can't use the same earnest money for more than one transaction, so you would need to write multiple checks and if multiple are accepted, be prepared for the brokerage to deposit multiple checks, even if they give you some back afterwards.
$40k off the price is a lot if we are talking starter houses in a cheap area, but basically pennies if we are talking about a high end house in an expensive area. So that matters, too. The most important thing, though, is how motivated they are to sell. There is no way for you as a buyer to know which seller is the most motivated to sell. If any of the houses are vacant, that can be a motivator, that the seller has already moved and maybe is making 2 house payments, so would like to get one gone. Or if one has already taken several price reductions (your agent can probably see that in MLS, I know ours shows it), that could be a sign that they would like to get it sold.
ask your agent what the obligations are in Williamsburg - could you technically be under contract on all 3 and could you be liable to buy all 3?
You always make the first offer on the house you like the most. You haven't said whether all 3 have reduced their price, when the last reduction was, etc. Or whether that market is just now coming out of winter into some magical selling season.
What percentage of the asking price is 40k? And what are the comp sales n the area?
Unless the house is grossly overpriced you may lose all three houses. Starting with a lowball offer you may not even be looked at. I can tell you if I was selling and I got a offer of 40k under asking I would not even bother responding.
Are you financially prepared to follow through with the inspection/closing etc immediately?
Yes, and would prefer doing inspection as soon as possible since we're from out of town.
Quote:
Originally Posted by MrRational
But you'll need to include a "time is of the essence" clause which tells the seller why
they have to take your lowball offer as well as to rush their decision.
Our realtor agrees, and has a very similar clause.
Quote:
Originally Posted by MrRational
It might work too but the seller of house #1 will still want some protection that if he agrees to
your price/terms FIRST that he "wins" and you'll be obliged to follow through promptly...
rather than to wait for seller #2 or #3 to make their decision or any other reason to delay acceptance.
Absolutely. First come, first served, and if anyone bites we'll wrap it up that day.
Quote:
Originally Posted by MrRational
otoh... if the three sellers know each other they are just as likely to tell you to pound sand.
If Tom accepts the reduced price he essentially forces his golf buddies Dick & Harry to do the same with the next buyer.
That's a tough sell.
LOL, I was thinking the same thing. We figure it's worth giving it a shot, even so. But I'm prepared to get no takers, and possibly an angry response or two.
What percentage of the asking price is 40k? And what are the comp sales n the area?
Unless the house is grossly overpriced you may lose all three houses. Starting with a lowball offer you may not even be looked at. I can tell you if I was selling and I got a offer of 40k under asking I would not even bother responding.
True enough, our offer may go into the deep pit of "No way I'll even answer."
The homes are in the lower 400s, so 40K is just a hair under 10%. Comps work in our favor but aren't too helpful in this situation because the nearby neighborhoods are much older, lots are smaller, and houses were built by a different builder and are of lesser quality. I can't blame the sellers for thinking they're in an oasis that deserves a higher price. It's just that I can't afford their price.
As a follow up, we contacted our realtor and made a game plan. Our next trip is at the end of March and assuming the houses are still for sale we'll make the offers then. He wants us to see a few things first, which I think is smart, and I really don't think the houses will sell before then anyway. (And if they do, I'll be happy for the sellers because they've waited a long time.)
We're going to try the double fireplace house first. If they reject or we don't hear after 48 hours the skylight house. And finally, the house by the pond. It will be interesting to see how this goes.
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