so you're selling your house:

[flashfan]

Buying and selling real estate can be as much an emotional issue as it is a financial issue. Turbodog has really made a lot of good points.

It is not clear to me, but do you know for a fact that the sellers need to sell their old home before they close on their new home? Do you know for a fact that they don't have a sale contingency on their purchase escrow? Do you know the "background" on the property?

For me, a key point is the phrase: "...was a pretty sweet house at a good price." Good price being the important point. If the home was already priced well, a low-ball offer could easily be insulting to a seller.

As far as your offer goes, if you're making a low offer, what did your agent/broker put on the table to "sweeten the pill?" For example, emphasizing an all-cash deal or large down payment with written loan pre-approval (not pre-qualification), short escrow, other flexibility, compromise by paying a smidgen more than the buyer's usual share of transaction fees, etc.?

You mention the listing agent/broker giving bad advice, but perhaps your agent didn't do so well either? Listing and selling agents/brokers can communicate/negotiate behind the scenes to procure a counter offer, propose compromises, etc., to try to make the deal acceptable to both seller and buyer.

Yes, the seller sounds insulted, but you seem to be pretty miffed, too, so don't be too hard on the seller.

 

[James S]

turbodog must be having a negative day I"m not hoping to snag a deal that was unfair for anyone by making a 17% off the asking price offer. There was no intention to hurt anybody else or sneak away with something at an unfair price. You simply have to start the negotiation somewhere, and in a market where I"m not competing against any other offers and the values of houses are dropping not growing why would I start the negotiations at a place that was more advantages to them than to me?

There is no personal insult in a 17% off offering as a starting point for negotiation. You cannot tell anything about my ability to pay more than that simply because I started negotiation at that point. And lets be realistic about 17% off as a starting point. This is NOT a low ball offer. It's a perfectly reasonable starting point for the negotiation to begin. I no more expect him to sell it to me for that than he expects me to offer him his asking price. Taking any personal offense or anything else from a valid offer with everything else wrapped up is just dumb I'm sorry to say.

As far as sweetening the deal, we did that. We told them that financing was setup. There was no contingency on our selling our own house first, we were willing to be completely flexible on the closing date to accommodate their closing which we knew was coming up, but didn't know when.

To try to attach some personal attack to the offer is just silly and wont help you to sell your house. Since starting this thread I've had long talks with our realtor and several others as well as friends who are selling their house or otherwise involved in the process and universally I can't find anyone involved in the business that says I made an insulting or otherwise off the mark offer. So I'm no longer entertaining the idea that it was my fault

you WANT people to make an offer on your house. That offer is going to be some amount less than what you're offering If you are unable to come to an agreement that you're willing to accept, then you release the contract and you wait for the next person. That is just how it works. If you're going to get all worked up because I offered a few dollars less than some imaginary amount where I"m insulting your integrity then you need to read up on the process of buying and selling a house.

I really wasn't miffed, I was surprised and worried that I had actually done something nasty. But I just dont find that to be the case. I offered no offense, just a point from which negotiations could have begun.

 

[turbodog]

Your offer is a statement of what you are willing to pay, what you think the house is worth. This IS a personal insult.

If they agreed to a 17% low offer would you then raise it up since you know the house is worth more 1) on paper and 2) to you, explaining that the 83% figure was just a negotiating tactic?

When I asked 10 people what they thought of a 17% low offer, I got 90% negative responses.

You lowballed them and didn't like their response.

 

[James S]

Your offer is a statement of what you are willing to pay, what you think the house is worth. This IS a personal insult.

Nope, I dont believe it works that way. My offer is an opening point from which to begin negotiations. Nothing in my offer compels them to do anything, and indeed they did not. Thats OK, it just surprised me thats all. It's not personal, it's selling your house. We all have personal life and whatever invested in our house, but you can't get that possessive about it if you're going to sell or you're going to be unhappy with any offer. You're getting bad advise if you take it personally. It's not personal.

If they agreed to a 17% low offer would you then raise it up since you know the house is worth more 1) on paper and 2) to you, explaining that the 83% figure was just a negotiating tactic?

I can't scan that at all really. If they agreed to a 17% offer then they were happy to get it for whatever reason. Of the 4 different realtors I chatted with I could find only 1 person who recalled a first offer ever being accepted and she said it was a horrible decision on the part of the seller. First offers are not accepted, and therefore must be below the asking price of the house. Can you say that this particular house was really worth what they were asking? If you price a house at your lowest acceptable price as then you're getting the wrong advice. You're obviously coming from a different market than the one here. Friend of mine bought a place in one of those markets where you end up getting more for your house than what you asked because so many people end up bidding for them. But I think thats silly too.

When I asked 10 people what they thought of a 17% low offer, I got 90% negative responses.

I spoke to 4 other realtors, all agreed the house would not have sold for that, but it would not have sold for anything as a first offer because people dont accept first offers regardless. Are you thinking I expected to get it for 17% off? I expected to negotiate and get it for some smaller amount off.

You lowballed them and didn't like their response.

Define lowball Negotiation for houses often and regularly starts at 20% off. I didn't even go that far. Lower than that might be considered a "low ball" offer. If you're in a market where you dont have to entertain getting less than your asking price for the house, then more power to you, you bought wisely and were lucky! But this is not the case for most of us, and certainly not for the house in question here. I"m not in any pain over deciding not to buy this house from them, I just thought it was weird that they didn't respond at all. 17% can become 12% can become 7% over a couple of back and forths and at that point you're looking at something really close to your asking price. I could have started at 9%, then dropped to 8% then dropped to 7%? Would that have been better? They both ended at the same place didn't they?

 

[turbodog]

You can try and pick it all apart, but you tried a lowball offer. I would not have countered.

The bottom line is that if you had made a better offer (money, timeframe, earnest $, etc) you would have a counter offer.

Their counter offer was to not even dignify yours with a response. Sorry.

 

[turbodog]

... I just thought it was weird that they didn't respond at all. 17% can become 12% can become 7% over a couple of back and forths and at that point you're looking at something really close to your asking price. I could have started at 9%, then dropped to 8% then dropped to 7%? Would that have been better? They both ended at the same place didn't they?

This is just the part that you don't seem to understand. If you're willing and happy to pay 95% asking then start a lot closer to that.

You 83% offer is insulting. It doesn't matter that it finally finishes higher. What matters is that your offer IS an indication of value. It's a statement about their house, their housekeeping, their landscaping, and more. In essence it's an offer on part of their life.

Penthouse magazine normally shoots barely legal nudes, but do you want YOUR daughter to be in it?

The 'fact' that an 80% offer is normal doesn't make it honorable to do so.

If you can't understand this, then you're missing out.

 

[daveman]

...You 83% offer is insulting. It doesn't matter that it finally finishes higher. What matters is that your offer IS an indication of value. It's a statement about their house, their housekeeping, their landscaping, and more. In essence it's an offer on part of their life...

I respectfully disagree, the offer is no longer just a statement on any individual house, but a statement on the market price. As well built, well kept, and well dressed as a house can be, if there's one, or worse, 3 foreclosure properties on the same block or in the same neighborhood (meaning similar build/layout/size) being offered by the bank at a lowball price, then that one seller's home value is no longer controlled by its own qualities or conditions; the market, in this case, other homes selling at lowball prices, have taken command of the market price.

 

[turbodog]

I respectfully disagree, the offer is no longer just a statement on any individual house, but a statement on the market price. As well built, well kept, and well dressed as a house can be, if there's one, or worse, 3 foreclosure properties on the same block or in the same neighborhood (meaning similar build/layout/size) being offered by the bank at a lowball price, then that one seller's home value is no longer controlled by its own qualities or conditions; the market, in this case, other homes selling at lowball prices, have taken command of the market price.

Must be in a playful mood. Thought I was finished here.

You're semi-right about aggregated home prices. But appraisers know what houses sell for. If one sells for significantly less, depressed because of being forced to move/etc, they can handily exclude that from the valuation ratings.

Also, banks seldom dump houses. Forclosures I have looked at have asked and went for about 95% of market value. And again, these are typically excluded when gathering comparable sale data in an area.

But the other applies also. One is not forced to accept what the market says the house is worth. My 2nd to last house I sold went for 17k over ASKING price. Then my sale "could" be used to pull up values if the appraiser deems that the sale conforms to normal market conditions.

 

[daveman]

...You're semi-right about aggregated home prices. But appraisers know what houses sell for. If one sells for significantly less, depressed because of being forced to move/etc, they can handily exclude that from the valuation ratings.

Except the appraisers' valuation ratings, adjusted or not, does not set the housing price. A seller can say his house is worth 800 grands, the appraiser can come in and raise that number another 100 grand, but it is the buyer who sets the transaction, therefore market, price.

If the appraisers' valuation ratings are worth anything, the banks wouldn't be going to foreign investors hat in hand begging for change to cover their write downs caused by declining re market (but my appraisers say these houses are worth xyz much...).

Also, banks seldom dump houses. Forclosures I have looked at have asked and went for about 95% of market value.

I'll take your word for it, it must be true where asked, but it certainly is not so in So. Cal. Banks (and builders, with their spanking new homes) are undercutting the resales by 15% to 20% in prices.

But the other applies also. One is not forced to accept what the market says the house is worth.

I couldn't have said it better myself.

 

[turbodog]

Appraiser has a lot more to do with it than that.

If the owner wants 800k, but it appraises for 900k they can list and sell it for 900k and give 100k CASH back to the buyers at closing.

The tendency to take the extra money, whether from incentives like this or equity financing, coupled with low rates and easy approval has enticed us down this sorry path.

We didn't want to sell our house for 17k over asking, but the buyers were not of our race. We wanted to avoid any discrimination lawsuit, so we sold it to them. It wasn't worth that much, most likely.

Housing has beening appreciating steadily here. While the rest of the country is tanking, our growth rate has flattened out.

 

[daveman]

Appraiser has a lot more to do with it than that.

If the owner wants 800k, but it appraises for 900k they can list and sell it for 900k and give 100k CASH back to the buyers at closing.

Yet the buyer still insists that house is only worth 600k and tosses the appraiser's number right out the window. That's today's market except for a few international or vacationing hubs in the country such as new york city; even at those places, sellers are starting to negotiate, showing a flexibility not seen the past 3 years.

No appraisers' numbers are worth anything right now; the market is still moving very rapidly, and it ain't moving up. Whatever off the charts estimates an appraiser makes this month will need to be revised again next month.

 

[DonShock]

...... It's a perfectly reasonable starting point for the negotiation to begin. I no more expect him to sell it to me for that than he expects me to offer him his asking price. .........

You're assuming that he has automatically jacked up the asking price over the house's actual value in order to provide some negotiating room so that once you "meet in the middle" then he's still getting an acceptable price. Depending on what the house is actually worth and what the seller's financial situation is, an offer 17% below asking could be fair, insulting, a starting point for negotiation or the end of the negotiation if the seller HAS to get the asking price. One side of the falling housing market is the chance for bargains, but the other side is that some sellers are now upside down in their house values and the asking price may be as low as they can go, even though they are desperate to sell.