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First, let me say thanks for this thread--it's great reading. Second, I'm a buyer, so I of course have a stake in being able to low-ball....
Could you help me understand why a low offer is insulting? Beyond what someone feels about a meaningful, unique asset that they love? I put in a low offer on a house and was told that the owner was insulted. But wouldn't it just be more reasonable for her to respond with a counter offer that makes it clear what she thinks is a fair price without the drama?
I was just talking to a friend last night. She said her friends routinely say first offer should be 10-15% lower. She bought her 800K house for 500K--unique situation--she drove by to look at the house and the owner was in the front yard. He asked if she was interested, she said she was but her top limit was 500K and he said OK. Would be nice...
First, let me say thanks for this thread--it's great reading. Second, I'm a buyer, so I of course have a stake in being able to low-ball....
Could you help me understand why a low offer is insulting? Beyond what someone feels about a meaningful, unique asset that they love? I put in a low offer on a house and was told that the owner was insulted. But wouldn't it just be more reasonable for her to respond with a counter offer that makes it clear what she thinks is a fair price without the drama?
I was just talking to a friend last night. She said her friends routinely say first offer should be 10-15% lower. She bought her 800K house for 500K--unique situation--she drove by to look at the house and the owner was in the front yard. He asked if she was interested, she said she was but her top limit was 500K and he said OK. Would be nice...
Thanks--I really do want to understand.
10 - 15% below asking is not LOWBALLING. Offering what the MARKET value is is not lowballing despite asking price.
BUT.. if market value is 200K and you offer 100K.. THAT is insulting. Put yourself in the sellers shoes. Imagine you buy the house and then a few years later you want to sell it and people come in and offer you bargain basement prices! It' insulting, you wouldn't want to counter and it would be a waste of time to counter an offer from a person who's obviously out to buy on the cheap.
Thanks--and I thought 10-15% was lowballing, so that helps. Not to beat a dead horse, I can completely understand why that person you described might not want to even counter. But, honestly, I don't get the insult. Just ignore it or feel bad for that poor ignorant soul who has no idea what your house is worth. Feeling insulted is a choice.
I lived in Asia for a while and learned a great deal about negotiating in the markets where haggling over prices is a way of life. It was full of drama and was usually fun--if I really wanted something I would have a higher agree price in mind but I would still start low because it was part of the expectation.
Perhaps what we are dealing with here are expectations about how the process should work.
if i were you i'd stick to my guns. there has been a lot of upheaval lately not only in real estate but across the board. i'd sit out of this market for a while if i were you. you've waited so long, there's no harm in waiting a little longer.
58robbo, I have waited almost five years, now. Maybe I should wait one year more. It would be nice if prices came back to early 2004 levels, because that is the year I decided it was too wasteful to buy a house in the bubble and bought an appartment instead. (ha ha, kicking myself now!)
One of the duplexes on sale sold for 150,000 in 2005. I would love to buy a house for 150,000. Will it ever happen again.
I am looking at two homes actually in an area I will be moving back too in three years. One home is listed at 190,000....1700 square feet, HOA fee of 51.00, which covers maintenance of front yard, community, pool. Would I be out of line to offer 175,000? The home brand new, during the "bubble' sold brand new for 285,000. I don't want to insult them but not willing to go to 190,000 even though I realize the home is alot less than a couple years ago.
58robbo, I have waited almost five years, now. Maybe I should wait one year more. It would be nice if prices came back to early 2004 levels, because that is the year I decided it was too wasteful to buy a house in the bubble and bought an appartment instead. (ha ha, kicking myself now!)
One of the duplexes on sale sold for 150,000 in 2005. I would love to buy a house for 150,000. Will it ever happen again.
Thank you for the advice
karen59,
the question i kept asking myself during the boom is 'my this boom has lasted long, i wonder when the downturn is coming?'. i knew with the level of debt that many people are in, the minute that the economy started to tank, that it would spiral. the problem is that house prices are a very delayed reaction to economic conditions.
unemployment is on the rise and it's starting to snowball. how are these people going to afford to buy? mortgages are also getting more difficult to get hold off, this will take even more buyers out of the picture. then there is the psychological aspect of many seeing their friends and family foreclosed on. this makes some of those who have jobs and can get credit more risk averse.
to be fair, the government is trying desperately to prop up house prices. all they really want is to stop the decline. once it stops they'll stop flooding the market with cash and house prices will flatline for many years to come.
if you think you're going to miss out on the next boom by not buying now, you'll fall into the trap that many fell into 1,2,5,7,9 months ago and are already underwater.
imo, the time to buy will be when the price of oil starts to climb again. it can take 3 months, 6,9, 12, 24 who knows. i wouldn't touch anything now.
First, let me say thanks for this thread--it's great reading. Second, I'm a buyer, so I of course have a stake in being able to low-ball....
Could you help me understand why a low offer is insulting? .... I really do want to understand.
As a Seller:
We sold a home in Phoenix last year - the market had just started to go bad.
At the peak in 2005 we could of sold for 255K ... but it was not 2005 it was 2007 and things had changed ... prices around us had dropped selling for about 220K
As a Realtor, I priced my house to sell -and we listed it at 190K knowing that would get attention. We were 30K below all the "on the market comps" and 45K below all the "sold comps"
Well sure enough within 2 weeks ... We got 3 lowball offers from investors Offering us 120K to 135K ... We said NO and did NOT counter. They were insulting Offers because these were investors just looking to flip our house (assuming we were desperate) and they wanted to make the money off the house that they did not want to give us. It's insulting when you know that they want to make money off of you and assume you are stupid. We are not so dumb as to let someone else make our profit. However, we were no delusional about what our house was worth and it was certainly worth more than they were offering.
Three weeks later, we negotiated with and eventually sold to a nice woman for 165K that's 25K below our asking price. Was it low? Yes. Were we insulted? No ... the market was falling and we knew it was for her and her son. I didn't mind negotiating with someone who wanted a home. I did not want to negotiate with someone who came in sooo low that it was clear they were jsut going to sell it for the profit/ sweat equity they were unwilling to pay me.
Quote:
Originally Posted by 58robbo
karen59,
...... if you think you're going to miss out on the next boom by not buying now, you'll fall into the trap that many fell into 1,2,5,7,9 months ago and are already underwater.
imo, the time to buy will be when the price of oil starts to climb again. it can take 3 months, 6,9, 12, 24 who knows. i wouldn't touch anything now.
AS a buyer:
I disagree. I rented a house for one year in my new area and watched the market.
After seeing a lot and being a bit patient, I just bought a house I've been watching drop in price for a year. It's dropped 90K. It's a beauty and I love it. Sure could of waited longer ... hoping it would drop more. Or I could watch someone else recognize a good deal and buy it instead.
People should buy a home they want to live in ... assuming they are going to stay awhile AND they have a significant down payment .... that way it doesn't matter if the price falls some .... you will still have a ton of equity. The problem comes when people try to finance a home with no money down and they take a funny money loan and hope for the best.
We put 50% down, got a 5.75 loan on the rest. Our house is 200K less than those in the surrounding blocks. The inspection was perfect - home was built in 2002 - It's in excellent condition because the prior owners took really good care of it.
I jumped off the fence and don't regret it a bit. I got a great deal in a great area. My house is not a short sale, and it is assessed for 95K more than I got it for. If you search and are smart with your money and your investment there are plenty of good deals to be found. Assuming you are buying a home to stay in for a while and not just a flip.
Make an offer, any offer and see if they bite ... but don't lowball, just because of the media or the market. Find a house you truly love, pay what you think its worth and more importantly WHAT YOU CAN AFFORD ... and then more forward. Lowballing just for the sake of it is creepy and wrong.
I say 'lowball" every offer. If they don't take it, move on to the next house. There are so many homes on the market right now that you are eventually going to find a motivated seller. Never offer full price.
I put an offer on a great house in a good neighborhood that was not even countered. It was definitely a lowball. Was told by my RE agent that her RE agent said she was miffed. Maybe she thought I was a flipper...I certainly didn't think she was stupid, I just don't know any other way of finding out how much she really wants to sell her house. I didn't intend to insult her either but she was.
It is listed at 259.9K, 2000 s.f. ($127 s.f.) Needs some work for sure. Other comps in the area are not so helpful--this is an up and coming neighborhood where in the past few years, people have bought homes and completely renovated them or they are tear downs. Two closest comps, I think, one house sold for $77 per sf but it was 1200 sf larger but had a garage. Other is 400+ sf larger and had an additional bathroom sold for $135 per sf.
I am not a flipper--I am a recently divorced single mother with a preschooler. I'm looking for a place to live and love. I want a space big enough to have a little room for painting and arts and crafts with my son. I got myself out of huge financial debt from my marriage in a very short time by working extra jobs and being great on a budget.
So, here's where any advice would be most helpful. My offer was on Monday; told on Tuesday she was miffed and no counter. Yesterday, her RE agent told mine that he was going to meet with her at work to try to get her to counter. No word since then. What should I do?
Will it help to tell her I'm a nice hard working person who wants to live in a community that is diverse because I want my son to grow up with great values? Should I make another offer--and if so, is there some period I should wait?
I really think this house would be a great buy at 15% to 20% under listing price. And I could do that with my budget. But if she's insulted, maybe I should walk away and quit thinking about it. Really, the house needs a great deal of sweat equity (attractive to me)--the kitchen and bathroom look like they are 1940s vintage (and not new cool vintage) and there might be huge problems with the basement (no lights but looked like plants growing through the foundation).
What should I do? I need to do something...or just let it go!
I put an offer on a great house in a good neighborhood that was not even countered. It was definitely a lowball. Was told by my RE agent that her RE agent said she was miffed. Maybe she thought I was a flipper...I certainly didn't think she was stupid, I just don't know any other way of finding out how much she really wants to sell her house. I didn't intend to insult her either but she was.
It is listed at 259.9K, 2000 s.f. ($127 s.f.) Needs some work for sure. Other comps in the area are not so helpful--this is an up and coming neighborhood where in the past few years, people have bought homes and completely renovated them or they are tear downs. Two closest comps, I think, one house sold for $77 per sf but it was 1200 sf larger but had a garage. Other is 400+ sf larger and had an additional bathroom sold for $135 per sf.
I am not a flipper--I am a recently divorced single mother with a preschooler. I'm looking for a place to live and love. I want a space big enough to have a little room for painting and arts and crafts with my son. I got myself out of huge financial debt from my marriage in a very short time by working extra jobs and being great on a budget.
So, here's where any advice would be most helpful. My offer was on Monday; told on Tuesday she was miffed and no counter. Yesterday, her RE agent told mine that he was going to meet with her at work to try to get her to counter. No word since then. What should I do?
Will it help to tell her I'm a nice hard working person who wants to live in a community that is diverse because I want my son to grow up with great values? Should I make another offer--and if so, is there some period I should wait?
I really think this house would be a great buy at 15% to 20% under listing price. And I could do that with my budget. But if she's insulted, maybe I should walk away and quit thinking about it. Really, the house needs a great deal of sweat equity (attractive to me)--the kitchen and bathroom look like they are 1940s vintage (and not new cool vintage) and there might be huge problems with the basement (no lights but looked like plants growing through the foundation).
What should I do? I need to do something...or just let it go!
i agree with many people on this site who say that real estate is local. it is. some areas have gone up and most, down. the problem is the current economy. if you worked at lehmanns, bears, goldmans, gm, ge etc, you'd be right in thinking you had a safe job. well that was then and this is now. is your job safe? i don't really want to miff anyone out, but at this point does anyone really know for sure? i think we're in for a tough time. i'm not being negative but i really do think that with all this uncertainty it would be prudent to wait it out. i had been looking in florida for 2 years now. recently one of my targets went for $160k. 2 years ago with an asking price of $400k i lowballed him at $250k. i sit everyday now and thank my lucky stars he didn't except my initial offer. what i can say with absolute certainty is that once prices stabilise, they won't be going anywhere for a very long time.
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My 2 cents ... or maybe 10 cents.
