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I have been searching a house for more than a year and finally decided that it might be the time that we want to take advantage of some tax credit. I currently own a home, so that would be $6,500 credit. Anyway, even if people say it is a buyer's market, I have not been able to see many inventories last couple of years in the area I live in.
The house is currently not listed in MLS after the listing got expired last December. The house is with over 4000 sq ft and it was originally priced close to $500,000. I think the original listing was overpriced and it should fall into a $450-60k range.
When we made our offer, we worked with the seller's agent and agreed that he will be the dual agent, but will not take 3% split commission, rebating that to the price reduction.
Considering that the seller did not even put their house back in the market, the 3% buyer's commission they don't have to pay, and the current market where the higher valued homes are not moving in this town, we made our offer at $420k. This might seem a low ball offer to them if they wanted to get close to $500k, but I didn't think that was the right price to start with.
Anyway, they came back with a counter offer at upper 450K and only offered a small money to replace their nasty basement carpet, which was a contingency I put on thinking it is reasonable since they had two dogs.
I don't think I will want to go over 430k on this. But I also hate to shop again. What should I do?
You said it was worth $450-$460 and that is where they countered back but you only want to go to $430?
Even if you took the 3% off of their counter it gets you to around $443-$445, why not counter back to them there? It still puts you $5,000-$15,000 under what you said it was worth.
And change out the carpet yourself. Carpet is not that expensive.
Mike P has some solid points for the OP to consider. The fact that inventory is low in your neck of the woods MIGHT be a major reason why the seller is not so eager to be "bent over" by your offer, which by your admission is far below what the current value ought to be.
It is one thing to make a offer below what you believe a fair price might be, if such an offer is accompanied by NO other demands / contingencies, and QUITE ANOTHER to make an offer that will take money out of the seller's pocket for things that you should well be able to afford by getting a fantastic bargain.
If you cannot afford the closing costs and carpet and such then I would HIGHLY RECOMMEND you go shopping at a price point where you CAN afford to make a nice "no hassle" offer especially if WANT TO CLOSE QUICK ENOUGH TO TAKE ENOUGH OF THE TAX CREDIT!!!
Thank you for the advice, Mike P and Chet. Another factor I considered was that the seller will not even pay another 3% to his agent since the house was not put back on the market and got an offer from me. I guess the seller insisted that he will only pay the minimum transaction cost to this agent. Anyway, a couple of houses most recently sold in this neighbor were $93-97 per sq ft. So, the range I gave you were the fair market value that the owner is thinking. Sorry for the confusion.
And for the carpet, I didn't ask for the allowance because I can't afford but because I for some reason believed that the seller will have to replace anyway if they want to put their house back on the market for the price they want. Even if the inventory is low, I have not seen any house at that price range that is not move-in condition. Am I making a wrong assumption?
If you run the numbers - you'll find it's not all that different.
Do what you can to make the deal, quibbling over $10-$15 k really is not worth your time.
Did you see this house with your agent? I am curious if you are throwing your representation under a bus.
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