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Old 07-03-2009, 12:42 AM
 
171 posts, read 508,234 times
Reputation: 139

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Situation: My wife and I put in an offer earlier this week on a house for $320K. Asking price is $365K. The home has been on the market since early May, and they have reduced their price once by $5K.

We came up with the $320K number based on comps. The home right next door to it (identical model, but 50 sqft less space) is under contract for an undisclosed amount. Their asking price was $324K. My agent took a look at the pictures of both houses, and says that our house is nicer inside, but it doesnt have granite or anything. I think the two houses are about as similar as comps get.

That being said, I can see how their house is probably worth $330K. I expected the sellers to counter and for us to end up in the $330K range.

However, I was just informed by my agent that the sellers refuse to even address our offer. I guess we offended them or something. Is this a common practice in this real estate market? As a first-time homebuyer (it was actually our first offer ever), the reply was disconcerting and I'm wondering if I should ever submit an offer $40K below asking price ever again, lest I waste everybody's time.

Thanks!
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Old 07-03-2009, 04:04 AM
 
4,398 posts, read 9,453,238 times
Reputation: 2358
Quote:
Originally Posted by ucbedge View Post
Situation: My wife and I put in an offer earlier this week on a house for $320K. Asking price is $365K. The home has been on the market since early May, and they have reduced their price once by $5K.

We came up with the $320K number based on comps. The home right next door to it (identical model, but 50 sqft less space) is under contract for an undisclosed amount. Their asking price was $324K. My agent took a look at the pictures of both houses, and says that our house is nicer inside, but it doesnt have granite or anything. I think the two houses are about as similar as comps get.

That being said, I can see how their house is probably worth $330K. I expected the sellers to counter and for us to end up in the $330K range.

However, I was just informed by my agent that the sellers refuse to even address our offer. I guess we offended them or something. Is this a common practice in this real estate market? As a first-time homebuyer (it was actually our first offer ever), the reply was disconcerting and I'm wondering if I should ever submit an offer $40K below asking price ever again, lest I waste everybody's time.

Thanks!
Sounds like he thinks his house is worth way more than you think, maybe he is right but who knows, sounds like you've done some homework. But I've read other threads saying the exact opposite, they saw a house for 300,000 thought about putting an offer for 250 decided not to and then it sold for 235.
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Old 07-03-2009, 04:58 AM
 
Location: Cary, NC
35,538 posts, read 61,961,912 times
Reputation: 34946
It happens when dealing with some folks. You just might be dealing with an idiot.
If they are dull enough to be "offended" by your offer, further negotiations will likely be emotion-based, which always makes a business transaction more difficult.

Regardless of the price/offer, I always counsel sellers to respond and counter, and to keep the conversation alive.
If you can't put a deal together and you think your offer was fair, don't sweat it. Don't dwell on it in future attempts.
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Old 07-03-2009, 06:17 AM
 
Location: Inman Park (Atlanta, GA)
21,871 posts, read 13,528,207 times
Reputation: 14259
Sometimes logic does not prevail in negotiations. Like Mike has stated, if the other party doesn't counter, the lines of communication are dead. I guess the Seller thinks that their house is worth a lot more than the "comp" house that is under contract. I guess that granite was really expensive

I wouldn't dwell on your offer too much. There are plenty of other properties out there in this market. I always tell my clients - a property is worth only what both parties are willing to pay/sell it for. I don't think that the offer you made was that insulting. I have seen a lot worse in this market

Perhaps this is not the house for you.

Good luck! I know you will find your first home.
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Old 07-03-2009, 06:35 AM
 
Location: Martinsville, NJ
6,162 posts, read 11,647,535 times
Reputation: 3968
Quote:
Originally Posted by ucbedge View Post
Situation: My wife and I put in an offer earlier this week on a house for $320K. Asking price is $365K. The home has been on the market since early May, and they have reduced their price once by $5K.

We came up with the $320K number based on comps. The home right next door to it (identical model, but 50 sqft less space) is under contract for an undisclosed amount. Their asking price was $324K. My agent took a look at the pictures of both houses, and says that our house is nicer inside, but it doesnt have granite or anything. I think the two houses are about as similar as comps get.

That being said, I can see how their house is probably worth $330K. I expected the sellers to counter and for us to end up in the $330K range.

However, I was just informed by my agent that the sellers refuse to even address our offer. I guess we offended them or something. Is this a common practice in this real estate market? As a first-time homebuyer (it was actually our first offer ever), the reply was disconcerting and I'm wondering if I should ever submit an offer $40K below asking price ever again, lest I waste everybody's time.

Thanks!
As others have already said, it's a communication and perception issue. They think their house is worth a lot more than you think it's worth, and don't want to even talk about as low a number as you offered. I would politely make sure he knows that yrou offer stands and that you are willing to talk about meeting in the middle someplace if he (or his agent) can show you why it's worth more than you think it is.
Something jumped out at me as I read your post, however, and I have a question;
You said, "My agent took a look at the pictures of both houses". That statement is a tad unclear, so I assume you mean here that your agent compared pictures of the other house with his knowledge of the house you are trying to buy. Your agent has been in the house you are trying to buy, right?
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Old 07-03-2009, 08:51 AM
 
Location: Barrington
53,102 posts, read 37,278,347 times
Reputation: 17266
Quote:
Originally Posted by Bill Keegan View Post

You said, "My agent took a look at the pictures of both houses". That statement is a tad unclear, so I assume you mean here that your agent compared pictures of the other house with his knowledge of the house you are trying to buy. Your agent has been in the house you are trying to buy, right?
I'll go a step futher....your agent has been in the house next door, right? Although the home may appear to be the same, no one knows unless one has seen both homes.

Does your agent know the motivation of the owner next door versus the owner of the subject home? By this I mean what happens if the house is not sold?

Most markets are flooded with properties listed by sellers who are not motivated to sell. Many of them are looking for $X net proceeds from the sale of their home, to make the next move. Or, they cannot afford to sell for less because they do not have sufficient funds to close the transaction, i.e. bringing a check to the closing table.

Last edited by middle-aged mom; 07-03-2009 at 09:04 AM..
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Old 07-03-2009, 09:00 AM
 
Location: Salem, OR
14,469 posts, read 34,559,495 times
Reputation: 13867
It happens. In fact it happened to one of my buyer's last month. The seller got offended because we asked, in the offer, for a plumber to come out and investigate the smell in the garage by the utility sink (I think it just needed to be augured out). Seller got offended and refused to counter.

You'll have to get used to the fact that sometimes people do things that seem irrational to you.
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Old 07-03-2009, 10:04 AM
 
Location: Boise, ID
8,047 posts, read 24,983,366 times
Reputation: 9356
Its also possible that the seller doesn't really "need" to sell. There are still some of those people out there. They may have the house on the market for what they would be willing to take for it, and if a buyer comes along willing to pay that, then they will sell. But they may not be interested in lower offers.

So they may not be offended, they might just be completely uninterested in your offer.
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Old 07-03-2009, 10:49 AM
 
171 posts, read 508,234 times
Reputation: 139
OP here. Thanks everybody for the great replies! The owners of the home are the original owners, so their "non-reply" is not totally unexpected.

To answer some people's questions:
Bill Keegan - the house next door is under contract, so I dont have access to it on the MLS. My agent does, of course, and looked at the pictures and did say it wasnt kept up as nice as our place. We viewed the house we're trying to buy with our agent (twice).

Middle-aged Mom - No, my agent has not been in the comp house. However, she did talk with that selling agent. She said the sellers were extremely motivated and gave a list of differences between the comp house and "our" house. There are quality differences, but nothing more than $10K worth. Like I said, similar sized homes with granite and backing to greenspace (neither of which "our" house has) sell for around $335K.

What really surprised me is the seller's agent. I guess my agent has been going back-and-forth with her regarding comps. Supposedly, the seller's agent has a list of comps that substantiate their price based on a price per sq ft model. My agent says that their comps are flawed however, as they a) ignore the house next door; and b) all but one of the comps are of different sized houses (i.e. 15%-20% bigger or smaller square footage) while similar sized houses are ignored. I guess this could lead to an inflated price?

So what should my next step be? My wife really likes the house, but is not spending $360K for it. She says just wait 30 days and resubmit the same offer. But after this last experience, I dont think the seller's want us to have their house at any price.
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Old 07-03-2009, 02:25 PM
 
Location: Barrington
53,102 posts, read 37,278,347 times
Reputation: 17266
What's the seller's motivation? What happens if they do not sell?

When does the house next door close? That will give you another fact of the local market.

And do not discount the valued added of backing to a green space compared to whatever it is, the other homes front.
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