Offer on House- Over the Top or not?

[zoebartlett]

Very bizzare. Also, extremely unprofessional of the realtor to even put that offer down in writing.

That's what I thought too. Ten dollars is insane, and I'm really surprised that the realtor actually agreed to put it in the couple's offer.

 

[zoebartlett]

Since "Property Virgins" was brought up...

I watch the show but it bugs me. Sandra always says, "You've bought yourself a house!" and the show just ends. I'd love to see a follow-up show to find out if the people actually end up going through with it and close on the property. So many things could go wrong after an offer is accepted, and that show doesn't get into any of that.

Also, how does Sandra know ALL of the real estate markets in the US and Canada? I don't get that.

 

[Haven]

Since "Property Virgins" was brought up...

I watch the show but it bugs me. Sandra always says, "You've bought yourself a house!" and the show just ends. I'd love to see a follow-up show to find out if the people actually end up going through with it and close on the property. So many things could go wrong after an offer is accepted, and that show doesn't get into any of that.

Also, how does Sandra know ALL of the real estate markets in the US and Canada? I don't get that.

I AGREE! What happens after they finish negotiating? I want to know!
DH and I are always shocked that people on that show usually pay the offer price, or close to it.

RE: Asking for curtains and light fixtures--around here window treatments and light fixtures are assumed to be a part of the sale. I'm surprised to hear that in other markets sellers would take their window treatments and light fixtures with them!

I hope your in-laws get a good offer for their house! At least they don't have to sell, that's a nice place to be. DH still owns the condo he lived in before we were married, and we had it on the market for about six months but just took it off. We don't have to sell it, and unfortunately there are A LOT of high rise condos right on the lake for sale right now, so there wasn't much interest. I figure if we never sell it we'll just have a nice place to land in the city if we ever want to stay overnight. (Too bad we only live 20 minutes north of it, anyway.)

 

[April20]

I always wonder the same thing too! I mean, very little back and forth and have you noticed how quickly she gets an "answer"?

Apparently the buyers countered crazy low again and my inlaws dropped another $2500, upped the closing costs and offered HOA fees and the people still walked. I told DH that if they were rejecting everything but their low ball offers, they probably couldn't afford the house to begin with. My suspicion is that the offer they made was probably the top they could afford and they were just hoping it would happen. But seriously, don't look at houses you can't afford!

The other side of me is relieved the house isn't under contract. Selfish, selfish me. We're living with them right now for a month or two between houses (ours is rented out- we're probably moving out of state. Didn't know it'd rent so quick). At least I have a place to roost for a little bit longer. I do want them to sell though- it will be such a relief to them!

 

[April20]

I's interesting you bring up Property Virgins, April, because I watch that show often and have noticed the same thing. I also notice that the offers on that show are never really too much lower than the asking price (usually they are wihin 5%).

In my opinion, the comps don't lie. You mentioned other condos that are listed for the same price--are those the listings or the comps?

When we put in our offers I always looked at comps in a variety of ways--% sold under original list price, % sold under final listed price, % sold under assessed price, etc. so even though the comps don't lie, they can always be manipulated...

Keep us updated, I'm interested in how this pans out and am keeping my fingers crossed for your parents.

I don't think there are any true "comps" right now in the neighborhood. It's really small- 50 units maybe? There are several for sale, but the only one that has actually sold was bank owned, is half the size and I don't think is a true comp. It's right next door. Maybe they were basing it on that? I don't know.......

 

[iheartscience]

I agree that it's a business transaction and shouldn't be emotional, but the $10 figure is really just rude. I bought my house for $100k less than what it was originally listed for (after walking away from it once for several months), so I am all about negotiating based on comps. That said, I do think people should be mindful of offending the owner, because most people ARE emotional about their home, and if you really want the place, you should be respectful of that.

Haven-that's hilarious about the Crate and Barrel table and chairs! Hey-it was a win for everyone!

 

[Imdanny]

This is a business transaction, why all the emotional responses? If you don't like the offer, decline it. If you want to counter, counter.

Exactly.

 

[Phoenix]

I agree that it is a biz transaction and you can always counter-offer on the overall sales- purchase price. But that $10 seems rude to me; I would be offended.

 

[monarch64]

I definitely think it's a bizarre offer, and it would make me pause and consider whether it was serious.

That being said, I never understand why people say realtors or buyers should be embarrassed to make certain offers, or why sellers get offended by offers. This is a business transaction, why all the emotional responses? If you don't like the offer, decline it. If you want to counter, counter.

When we bought our house two summers ago our realtor said "I can't put in THIS offer, they'll be offended!" We said "That's ridiculous. Give it a try." Sure enough she did, and we bought our house for more than 10% under the list price, and nobody seemed to be offended at all--they sold it to us, didn't they?

Agree with first and second paragraphs, and am impressed you pulled it off (third paragraph), Haven!

We are actively looking to buy our first home but we've never even THOUGHT to try and make any crazy offers such as the OP's parents' buyer did. I don't WANT your personally chosen items. I want our own things! Our approach would MAYBE be more towards this: "knock off another $5k because we'll immediately want to re-paint your red/white/blue theme, replace the blue flooring/carpet/countertops throughout that match your Americana theme, and re-do the fenced backyard because the fence is full of severely crooked posts. Either neutralize your home yourself, or lower your asking price because not everyone loves the fact that you red-white-and-blue'd it for 2000 square feet. "

 

[partgypsy]

Here's a question. We are not really in the market, but I keep looking anyways . Figuring what I could get for our house if it sold, and what I feel comfortable, our top limit is 240K. I saw a house for sale for 282, now reduced to 280. Would it be insulting to offer them 240K? How low can you go before it is an offensive offer?

 

[Haven]

Here's a question. We are not really in the market, but I keep looking anyways . Figuring what I could get for our house if it sold, and what I feel comfortable, our top limit is 240K. I saw a house for sale for 282, now reduced to 280. Would it be insulting to offer them 240K? How low can you go before it is an offensive offer?

I am NOT a professional in this area, but our initial offer for our house was 15% under the asking price, and we ended up paying a bit more than 10% under the asking price. We went back and forth many, many times, and as I said earlier when we came to a standstill with only $2,000 separating both of our final offers we FINALLY made the deal go through when we said we'd pay the extra 2K if they left their dining room table set.

ANYWAY, I guess what I'm saying is *I* would have no problem putting in an offer for 240K on a house listed at 280K. What's the worst that can happen? They say no. Okay, so they say no. We put offers on at least three other homes before we ended up making a deal on what has become our home. The offers were always lower than what our realtor wanted us to offer, yet the sellers always countered, and one seller even came back months after we walked away from the negotiations to see if our last offer was still on the table. You just never know until you try.

Of course, I ask for a discount EVERYWHERE, so maybe I'm not the right person to listen to on this one. I have no qualms about offering less than asking price no matter where we are.

 

[NewEnglandLady]

I'm in the same camp as Haven, in fact we even had similar experiences buying (walked through 60+ homes, didn't get emotionally involved, put multiple offers on homes before finally getting "ours", offered 15%+ below asking, etc.). $240K is ~14% below asking, which I think is reasonable. If they're interested, they'll counter--if it's too low, they can just say "no" and you can consider putting in a second offer if you want. I certainly don't think 14% below is "offensive" territory.

We put in 3 offers this spring/summer. The first was 20% below asking, we got a "no", which we expected, but they asked us to re-submit a month later. They didn't need to sell their house (and it has since come off the market), so I just think they thought their house was worth more than it was--it was overpriced. Offer #2 was 15% below asking (20% below original asking before price drop) and they accepted the offer at 12% below. We backed out due to issues with the land. Offer #3 (the house we bought) was also 15% below asking, we got it for about 10% below asking. It was priced fairly as the couple was divorcing and needed to sell--I was excited about the final price and the house appraised for $100K over what we paid, which was great.

What helped us was a.) our realor was up front about the fact that we were interested in submitting a low offer and they asked us to submit anyway. I didn't want them to think "oh goody!" when they heard an offer was coming in--I wanted to set expectations. b.) I pulled data and analyzed it 6 ways to Sunday, then submitted the analysis that best supported our offer, that way they knew our offer was based on SOMETHING.

Unless you really REALLY fall in love with something, I couldn't justify offering within 5% of any house, even a competitively-priced house.

 

[partgypsy]

Thanks for the feedback. I haven't even seen the interior yet other than photos (hopefully will this weekend). We actually like our house and neighborhood alot, so we are also ok staying put. It's just that our current home doesn't have a couple things we would like (bigger backyard, place to park the car) that we can't renovate into existence. I actually hope we don't like it too much, because we would be in a better position if we first fully funded the emergency fund and got caught up on all the repairs needed to do to our house, before looking at houses. It's such a crazy market it's hard to know what fair market value is, both for houses we are looking at and our own home.

 

[April20]

I just got back into town last night and asked DH what the details were around these people's offer and why they walked, if my inlaws knew.

Here's what I think was interesting- the buyers only came up $1300 over their inital offer and said that was final. My inlaws realtor met live with the buyers agent. The agent was explaining what they'd based their offer on. The units that had sold most recently where the smallest floor plans and were middle units. There were a few other factors as well. Those comps put the price where my inlaws were willing to end up as it wasn't that much off what they felt was their rock bottom and it would be done with. They and their realtor didn't feel they weren't true comps, but oh well. The realtor even explained to the buyer's agent that she didn't feel she was looking at comps appropriately- the units she was comparing probably have half the square footage. At any rate, the buyer's agent thought that due to the market the sellers should be able to get it for $10K UNDER comps, which is where the got their number and why they walked when my inlaws wouldn't come down.

It makes me wonder what they buyer's agent would have recommended for a selling price if she was the listing agent. Apparently, she works exclusively with buyers and I wonder if that effects how she looks at comps- I would imagine you're always looking for a way to justify the lowest price possible if you only represent buyers.

 

[charbie]

I was once given this advice when purchasing an item that has a negotiable price (car, house, garage sale) "if you don't feel a bit guilty or embarrassed by your offer, it isn't low enough." Obviously this varies for people, but I felt it was sage advice.
However, I still hold firm that the $10 offer wasn't right. I would prefer the buyers agent to ask our agent first what items were possible for sale before including a sum like that in the offer.
My house is currently for sale and we put the price about 5k more than we are willing to part with it. But I feel like when you are talking about a home that only started at $140k anyways, there seems to be a tighter figure of how much the price can reasonably drop and still be considered fair market value.
And we know given the current intrest rates and drop in value of the homes where we are looking means we are going to make money on the back end of the sale.

 

[Steel]

I know this is too late as your family have already counter offered but I would have gone back to them to politely ask why they felt the house was worth less than the asking and to ask them to correct their offer as there is a typo in relation to the amount proposed for the collateral (furnishing & fittings) contract, surely they cannot mean to offer $10! ( ) .

Our system is a little different but we had the opportunity to sell without a realtor / estate agent. I placed the ads, showed the house and did face to face negotiations. The final purchasers offered about 6k under the asking (which was priced at about 30k under the lowest estate agent valuation - all estimates I have forgotten the exact amounts) and once they offered I thanked them both and went over again what items were to be included - light fittings, garden shed etc and asked them why they offered under the asking price? They looked startled and said they just had, no reason. So I told them that while I was waiting for asking price I would advise them if any higher offers came in. I started to aggressively publicise the house and within a week they were back with 2k over the asking- straight out but wanted all the furniture and washer dryer etc. I gave them everything except the washer & dryer. Looking back I should have bitten their hands off at the 6k under and thrown the washer dryer at them running out the house with my bundles of cash. But this was 2006 and who knew what was to come? Who knew it would get so low?

I am so aware that I had one buyer - just one. Nobody else offered me a penny for that house. If your family have a mortgage on the property remember that every month they still own it they pay % interest in the mortgage payment. So if they hold on to it for another 6 months of negotiations and pay $1000 a month in interest then they could just knock 6k off the asking today and sell.

My point is, it still could get worse. Yes they have been rude but they probably didn't think about it being rude - it is a business transaction after all. I feel guilty that the house I sold is worth so much less now but am I going to go back to them and give them 100k to ease my guilt - hell no. Business is business.

If you family can sell for that amount then the rest is gravy. Having a buyer is 100% the issue, if these guys walk away your family keep the house. Do they want that?

 

[Haven]

My point is, it still could get worse. Yes they have been rude but they probably didn't think about it being rude - it is a business transaction after all. I feel guilty that the house I sold is worth so much less now but am I going to go back to them and give them 100k to ease my guilt - hell no. Business is business.

If you family can sell for that amount then the rest is gravy. Having a buyer is 100% the issue, if these guys walk away your family keep the house. Do they want that?

THIS is really the key, I believe. Rude or not, ridiculously low or not, a house is really only worth what people are willing to pay for it when you're trying to sell it.

Now, it sounds like April's in-laws don't have to sell, so they're in a tougher spot, really, because they'll have to figure out for themselves at what point it is worth selling the house.

We're in the same situation with DH's condo in the city--we don't have to sell it, but we don't really care to own it anymore. We can continue to rent it out until May, but after that the association won't allow us to rent it out anymore. Can we afford to pay the assessment and small mortgage on that condo for an indefinite amount of time? Yes. Do I realize that we're lucky that we can do that? Yes. But that still means I don't really WANT to keep the condo. The problem is that DH has owned it for ten years, now, and it is worth LESS than what he paid ten years ago. AND, he put 20K into the condo for special assessments, AND he redid the kitchen. So, if we sell anytime soon DH loses all that money that he put into it. But if we keep it? Then we put more money into it that we could be putting into our own investments. Sometimes I feel it would be easier if we HAD to sell, because then we'd accept the best offer that came alone. It's this having to decide whether to sell or not that's driving us mad. I bet April's in-laws are facing the same conundrum.

 

[April20]

My inlaws are fine with keeping their house for now. They did have plans for when it sold, but those plans fell thru. If the house sells, they're not even sure where they'd go. They'd rather live in the house they can afford than give it away..... It's not a bad position to be in really. Personally, I think they should pull it off the market for a year or so and relist when the market has recovered a bit. But that's just what I would do.