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As a buyer, the entire process is a black box to me. I am not sure how my agent is negotiating with the listing agent and how the info is being communicated to the seller. My agent is a Redfin agent and my understanding is that he personally doesn't make commission from the sale. Redfin as a company earns that commission? So I am not sure if he's motivated to sell the offer on my behalf.
I have never expected nor seen a realtor "sell an offer" or "negotiate".
I expect them to relay my offer which is price, time periods and such.
That info speaks for itself.
Stop playing games. Stop looking to negotiate. Offer the most you are willing to spend on the house. Make sure your agent expresses it is your best and final. They will either take it or leave it. Then you are done and can move on.
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This.
Make the offer now, don't wait a week. That is silly.
I'm going to talk to my agent again and get his input on what offer we should go in next. When he called me to talk about the rejection, he said 460k might encourage them to counter but he thought they wouldn't go lower than 485k as their final. I felt like he was guessing and didn't sound like the listing agent gave him that number.
As a buyer, the entire process is a black box to me. I am not sure how my agent is negotiating with the listing agent and how the info is being communicated to the seller. My agent is a Redfin agent and my understanding is that he personally doesn't make commission from the sale. Redfin as a company earns that commission? So I am not sure if he's motivated to sell the offer on my behalf.
Wife is getting emotional about the house. How early do you guys think I should make my next offer? Should I give it a week or so and see if the seller comes back with a counter or should I move forward immediately?
Depends. Do you want this house or not? We sold our home 2 years ago we got a very low offer that had a bunch of contingencies. Our house was very well priced and we did not even counter. Our realtor told them to feel free to re-submit. In the mean time we got another offer and had been negotiating with them and got a second offer from the first buyer - again low and we ignored it.
By the time they decided to get their stuff together to be a third offer in (still lower then the other buyer) we had already gone under contract.
I would suggest getting serious and give a serious offer and stop worrying about percentages and instead give a real offer - the one that if you added $1 you would walk away.
You can't force the seller to sell it for what you think is a fair price. If it's been on the market for a long time then they probably are too tied to what they think it's worth and not what it is really worth, and you can't change that. All you can do is offer what you are willing to pay, and hope they agree. It might be another year and a half before they lower the price to what is realistic.
If the house isn't worth what they're asking, it will be reflected on the appraisal. A friend of mine recently pulled out of a purchase because the sellers wouldn't give a $7k concession after the appraisal came back lower than the contract price, and the truth was that the place needed a lot of work before it would be worth what they were paying, but they loved the floor plan and were willing to overpay to get it. They moved on to another house that became available after they ended that contract, that was a way better deal, and the other house is still on the market. For $7k less.
Too many buyers feel they can make a low offer, and they can after several counters end up buying a home.
Most do not realize, that if a home is priced right (true market value), that the majority of the sellers in a sellers market, are not going to play games. They realize if they wait a few days or weeks, there will be an offer they will accept. They do not want to waste their time playing games, and do not counter and start the counter offer game.
When we had homes on the market, we always priced them at a fair market price, and sat till the home was sold in any sellers market. And I may place several nice middle class homes owned by one buyer on the market at one time. And often enough to realize it was always a probability to get our asking price, and why cut the price like the OP wants to do, when you are going to get your price, within a few weeks at most.
How the pros figure it in normal or sellers market. 1: Do not overprice the home, but price at a true market value. 2: Hold at that price, waiting for a buyer.
Lets say a $400,000 home. I reject a $380,000 offer, and wait 90 days to get my price. That is a $20,000 return on waiting 90 days instead of selling at $380,000. Annualized this is a 20% return on investment. 6 Months to sell, and it is a 10% return on invested dollars. 1 year, and it is a 5% return on invested dollars. Compared to the interest I would get putting the money in the bank, that is a terrific return. In all the years I was in the business, we never had a property we held that was not sold within 90 days.
FACT: A lot of sellers, start with the market value, and add thousands of dollars, to give them room to handle offers, and counter offers and sell at or just below the true market value.
We found that putting the price at true market value, we were one of the lowest priced homes in the area, and we ended up holding and getting our asking price. The ones that had room to negotiate built in, made our homes look real good, and we got our price.
In all the years form 1972 till I finally retired, we bought and sold a lot of homes, but in all that time, I personally only sold 6 homes for personal residences to help friends find a good home, with all the rest I sold to investors. When we sold, I did not look for buyers, but let the other Realtors in the area sell them as selling brokers. Price them at fair market value, and mine looked the best priced and always in top shape (I had my own part time people that got them in top condition). When we put them on the market, the other agents worked hard to sell them for me, as the properties that were overpriced looking to negotiate made mine look cheap. The agents knew we did not dicker, and they let their clients know this. They told them I priced my homes below most on the market, and were in top condition. The homes I had for sale sold. The truth was, my clients homes were selling at the high end of the actual sales, as the overpriced homes got what they were after offers that they could counter offer, and get counter offers, till they came to a price they would both accept.
I had a big 3"X 5" rubber stamp that said REJECTED surrounded by a heavy border, and a red ink pad. I or my wife who was also a broker and managed my office would just automatically stamp unacceptable offers and hand them back to the agent when they would bring in an unacceptable offer. The sellers authorized us to do this when we listed the property. These were clients we handled their investment accounts more like a stock broker handles his, buying, selling, and exchanging properties time and again. We were in a reasonably hot market, and considered a sellers market area. My clients owned multiple single family homes when they invested in homes, and considered 12 single family homes were the equivalent of a 12 unit apartment building but easier to manage.
I spent my time on the more lucrative apartments, commercial, farms and ranches, development land, some developing, and and property exchanges around western states.
Last edited by oldtrader; 09-04-2017 at 03:22 PM..
You can't force the seller to sell it for what you think is a fair price. If it's been on the market for a long time then they probably are too tied to what they think it's worth and not what it is really worth, and you can't change that. All you can do is offer what you are willing to pay, and hope they agree. It might be another year and a half before they lower the price to what is realistic.
If the house isn't worth what they're asking, it will be reflected on the appraisal. A friend of mine recently pulled out of a purchase because the sellers wouldn't give a $7k concession after the appraisal came back lower than the contract price, and the truth was that the place needed a lot of work before it would be worth what they were paying, but they loved the floor plan and were willing to overpay to get it. They moved on to another house that became available after they ended that contract, that was a way better deal, and the other house is still on the market. For $7k less.
The seller isn't required to give concessions. You agree to a purchase price. If the appraisal is lower you come up with the difference. I mean if the appraisal comes in higher would you be ok with the seller raising the price? I wouldn't let 7k stand in the way of a sale but it would depend on what the buyer already asked for. Some buyers are unreasonable. Just like some sellers
My first offer of $44000 (88% of list price) for a house listed at $500000 was rejected by the seller. No counter or a request for us to put another offer. Seller has no other offer, house is vacant and been in the market for several months. Listing agent said that they "were deeply insulted with the offer"
We like the house and were expecting a counter to get started on the the negotiations. Very disappointed that we didn't get a counter from the seller. Comps are being sold at around 96-97% of the listing price. We are ready to go upto $475000 (95% of listing).
What tactic can I use as my next step? I could do another offer at $460000 and see if i can get a counter and add $5k-10k in increments. Or I could go in with a final and best offer with no room for negotiation.
Also, how soon should I do a second offer? Should I wait for a week or take action immediately.
Any thoughts are really appreciated.
I read the entire thread. My question for you is why did you put such a low offer in for this house? When a house is listed close to market value it is going to sell close to market value. You mentioned that houses are selling at 96-97% of listing price. You offered 88%. You should have offered around $470.
I have bought and sold real estate multiple times. If I get a lowball offer I usually counter at something pretty close to the listing price but some people don't counter lowballs at all.
If you want to bid on a house for real put in offers that are pretty close to what you want to pay. Sometimes the house really is over priced. If that is the case make a fair bid but don't pay more than you think it is worth.
When we were in the market there was a house on the market around $900K. We were prepared to pay up to $725 for it. Our first offer was $690. Our offer was rejected as a lowball with no negotiation at all. The house eventually sold for $725 to someone else about a year later. The moral of the story is that a house is worth what it is worth and will sell for market value. If $475 is what you believe to be the market value you need to make an offer that will get you to $475.
Ok, let me say this as a seller. If my realtor did the research and gave a price that was market value, then I did my homework before placing the home for sale. Yes, as the buyer, you have the right to offer as much as you think you'd like to pay for the home. But then I, as the seller, have the right to not bother to engage in "negotiations". It's one thing if the offer was within the ballpark, but to initially go low to ultimately end up in the middle isn't guaranteed. As a poster said, it isn't an auction. Our current home was priced at $438k. It had sat for a while and we offered $425k to open. Sellers came back with 434,500, we pay for the survey. Our realtor then told us that the sellers were only going to budge but so much. they had lived in the home 20 years and weren't in a big rush. in addition, the neighborhood was strong and their asking price wasn't unreasonable. He countered with $433k, and that is what we paid. The house ultimately appraised for $435k. The sellers only took a $5k haircut and it was a smooth transaction. If we went in at $400k we wouldn't have gotten much of a response I can tell you that. If you can't afford a $500k house or don't want to, keep looking. don't expect sellers to make their home affordable for you if they don't HAVE to.
Ultimately it was a win for us, we LOVE our home and we're so happy to have it. Love at first sight and to this day there are no other homes that do it for us. AND it has gone up in value, this same house is over $500k now, two years later. $400k gets you in the door in this neighborhood now.
It seems that other than the mistake of a lowball offer to begin with,
you are deciding the exact things that every buyer has to decide.
How much am I willing to pay for this house?
Am I willing to gamble losing the house in order to try to negotiate price down?
Once you have a top price you are willing to pay in your head and know whether you are willing to risk losing the house to negotiate you can proceed.
The mistake most people make is not knowing those 2 things before making an offer.
Based on those above decisions the next move is to either offer your top price and accept what they decide or offer less hoping to end up at or below your maximum price.
I disagree with the ones saying the next move has to be final top offer.
I have had houses I gambled and negotiated, others I didn't want to lose and offered full price.
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