Making an offer on a house (advice needed)...

[timmynausea]

I know many of you are homeowners, and I was hoping maybe somebody could give me some feedback on our situation.

Here's the background - This house has been on the market for about 9 months now with an asking price of $200k. The seller had a job transfer and relocated months ago, and her realtor repeatedly referred to her as " really motivated," which is partially in reference to her offering 2% toward closing costs plus another $1000 for anyone that went to this open house. Doing the math on that, the asking price can essentially be considered $195k.

We had contacted her realtor with some questions, and he seemed thrilled that someone was interested in the place, and went out of his way to get back to us multiple times. Eventually he called and tried to coax into coming that day to sign an offer because there was "another buyer interested."

So a few days ago we offered $175k, and the seller had until 6 pm Monday night to accept that offer. They didn't contact us or return our agent's calls. We finally got a hold of them this afternoon when they told us that they'll "save us the back and forth" and that "$195k is the seller's bottom line" - in other words, they won't budge an inch.

I am pretty pissed. My instinct is that this is pretty much some kind of aggressive negotiating tactic. Any advice on what we should do?

[KevinNU7]

Tell them your offer jsut dropped to $170k and they can call if they want it at that price.

[Eaglesfan27]

You have to decide if you want the house enough to pay 195k. Otherwise, keep looking.

[SnDvls]

move on to the next house if you aren't willing to pay the $195 and the buyer is firm at it.

[gottimd]

Thats a hell of a low ball, but I guess in todays market it can be done. I would maybe go up a few thousand on your 175K (like to 180 tops) and if they aren't willing to sell, tell them to "Suck it!" and move on.

I am not sure about your area though so I could be completely wrong.

On a side note, if that was $200K here, I would just crap my pants. Can't find anything decent for less than $350K here, and thats for a 2 BR condo.

[Gary Gorski]

I would say unless you are absolutely in love with the house and willing to pay 195k for it then tell them thanks anyways.

When we bought our house we got the same lines from their realtor and it was a similar situation. The house was on the market for over a year, someone had already backed out on a sale months earlier, the couple had moved...all that. When we made our first offer the realtor was very rude and said they probably wouldn't even think about it but he'll put it in anyways. Long story short - we made our final offer and he called back and said there was no way they would budge from the 10k off the price they countered our initial offer with. I told him that was fine but we weren't interested at that price...six hours later I got a phone call telling us the seller "reluctantly accepted" our offer.

Offer what you're willing to pay for it and if they want to play games tell them to play them with someone else. If they need to sell the house, they will. If you don't get that house it's not like there aren't thousands more you can pick from.

[albionmoonlight]

Originally Posted by timmynausea

I know many of you are homeowners, and I was hoping maybe somebody could give me some feedback on our situation.

Here's the background - This house has been on the market for about 9 months now with an asking price of $200k. The seller had a job transfer and relocated months ago, and her realtor repeatedly referred to her as " really motivated," which is partially in reference to her offering 2% toward closing costs plus another $1000 for anyone that went to this open house. Doing the math on that, the asking price can essentially be considered $195k.

We had contacted her realtor with some questions, and he seemed thrilled that someone was interested in the place, and went out of his way to get back to us multiple times. Eventually he called and tried to coax into coming that day to sign an offer because there was "another buyer interested."

So a few days ago we offered $175k, and the seller had until 6 pm Monday night to accept that offer. They didn't contact us or return our agent's calls. We finally got a hold of them this afternoon when they told us that they'll "save us the back and forth" and that "$195k is the seller's bottom line" - in other words, they won't budge an inch.

I am pretty pissed. My instinct is that this is pretty much some kind of aggressive negotiating tactic. Any advice on what we should do?

If you aren't willing to go to $195k, I'd tell them "thanks, but that's above what we are willing to pay." I would take them at their word and not make a counter-offer. Maybe they get back to you, maybe they don't, but at least you aren't playing their game.

[stevew]

All of the other advice is nice, but the real question is, "how much does your wife like the house?"

If the answer is "a lot," then you might have to go up a bit, otherwise, keep looking.

[Eaglesfan27]

Originally Posted by stevew

All of the other advice is nice, but the real question is, "how much does your wife like the house?"

If the answer is "a lot," then you might have to go up a bit, otherwise, keep looking.

So very true. My wife fell in love with our new house which is why we offered more than I thought we would..

[Toddzilla]

When I bought my current house, the sellers were "highly motivated" as well (nasty divorce, husband dying of cancer, lots of stuff). We took their offer provided they took care of all closing costs.

At the closing, we found out our mortgage company made a huge mistake on the down payment, partly due to their incompetence, and partly due to a mistake by the seller's realator. A $26,000 mistake.

So, we were asked to either pony up the $26K right there as part of the downpayment, or we could add it to the total mortgage amount and the mortgage company would cut a check to the seller. I was pissed and told the mortage lawyer to "fucking fix it." He offered to cut the check for $26K to the seller and only add $13K to the mortgage amount. I told them to forget it, I wasn't going to buy the house (bluffing of course), and got up to leave.

The seller offered to just eat the $26K and sell the house.

The moral of the story? If the seller says they're motivated, and they're acting motivated, then they are probably more desperate then they let on. Stick it to them and don't get hosed.

[Arctus]

Originally Posted by timmynausea

I know many of you are homeowners, and I was hoping maybe somebody could give me some feedback on our situation.

Here's the background - This house has been on the market for about 9 months now with an asking price of $200k. The seller had a job transfer and relocated months ago, and her realtor repeatedly referred to her as " really motivated," which is partially in reference to her offering 2% toward closing costs plus another $1000 for anyone that went to this open house. Doing the math on that, the asking price can essentially be considered $195k.

We had contacted her realtor with some questions, and he seemed thrilled that someone was interested in the place, and went out of his way to get back to us multiple times. Eventually he called and tried to coax into coming that day to sign an offer because there was "another buyer interested."

So a few days ago we offered $175k, and the seller had until 6 pm Monday night to accept that offer. They didn't contact us or return our agent's calls. We finally got a hold of them this afternoon when they told us that they'll "save us the back and forth" and that "$195k is the seller's bottom line" - in other words, they won't budge an inch.

I am pretty pissed. My instinct is that this is pretty much some kind of aggressive negotiating tactic. Any advice on what we should do?

Take it or leave it for $195K.

I can't see what your pissed about really. The seller listed at $195K and you made a lower offer. The seller has merely told you that they don't want to negotiate on the asking price.

[BrianD]

Negotiations done right are always like a game of chicken. You offer your price of $175k and declare that you won't go higher, they offer their price of $195 and declare they won't go lower, and you walk away from the table. If nobody really cares if this particular deal goes through, it won't. If someone was bluffing, they will cave and meet the other offer. If you really want this house, you are probably going to have to match their offer. I'm not sure how the market is in your area, but in my area if a house was priced at market value, nothing less than 97% or 98% of asking price would do it.

[Mustang]

That is a pretty low offer. I don't know why you could even remotely be pissed. It is their house.. they can tell you to pound sand even as much as you can. If you were thinking that around $188K was fair so, you started at $175K in hopes of getting up to that price.. well, that is one thing but, if you went in thinking that $175K was tops and they should be glad to get that well, you should just walk away now and let them decide.

I'd be wondering more why the house has been on the market for 9 months. That long in your area? Short? Above the price of other houses in that area?
Alot of variables to consider to decide if 195K is fair or not.

[stevew]

Well, if they aren't in the house, perhaps you could negotiate some sort of expidited closing, something that would be beneficial to you.

[st.cronin]

When I bought my house, they weren't willing to negotiate on price at all, but I was able to negotiate quite a bit of other stuff in - closing costs, hardwood floors, new windows. It became a very complicated deal, with me actually basically writing a short term 7k loan to the seller to make everything work. It's possible that your seller, like mine, has some financial situation that makes a lower price impossible.


Maybe look into some alternative ways to haggle, other than price.

[timmynausea]

Originally Posted by Mustang

That is a pretty low offer. I don't know why you could even remotely be pissed. It is their house.. they can tell you to pound sand even as much as you can. If you were thinking that around $188K was fair so, you started at $175K in hopes of getting up to that price.. well, that is one thing but, if you went in thinking that $175K was tops and they should be glad to get that well, you should just walk away now and let them decide.

I'd be wondering more why the house has been on the market for 9 months. That long in your area? Short? Above the price of other houses in that area?
Alot of variables to consider to decide if 195K is fair or not.

I guess there is more info I could give. The midwest (Michigan, in particular) is still recovering from losing hundreds of thousands of manufacturing jobs in the past few years. It is not just a buyer's market - it's a buyer's paradise. Many of the houses have been on the market for 9 months or more. There are twice as many houses on the market in west Michigan than there were last year at this time. I was just reading in the newspaper about a house in a higher price range that has been for sale for close to a year and has had literally two people look at it in that time.

$175k was a bit of a lowball offer, and we were planning to negotiate from there. The idea that they won't budge an inch is ridiculous to me. I guess they can keep making mortgage payments for another 9 months.

[timmynausea]

Dola to add: I appreciate everyone weighing in and giving me stuff to think about. Thanks.

[Mustang]

Originally Posted by timmynausea

$175k was a bit of a lowball offer, and we were planning to negotiate from there. The idea that they won't budge an inch is ridiculous to me. I guess they can keep making mortgage payments for another 9 months.

If it is a stagnant market then $175K might not have been that attrocious. I'm sure their tactic is to say they won't budge so, just tell them you aren't budging either and that maybe, in 9 months, you both might be willing to budge so.. call you back then.

But, like everyone said.. if the wife likes it..

Its like a game of rock-scissors-paper-fire where fire beats all.

[stevew]

The difference in monthly payments between the 2 figures looks to be roughly 150 dollars a month on a 30 year note. 20k is 20k(54k in extra payments over 30), but it's at least something to consider. Depending on the location(schools, taxes, driving to work distance etc) paying a bit more might be worth it in the long run. At least something to think about anyways.

[Chas in Cinti]

ok... I deal real estate quite a bit; and have several friends that do it for a living. Their advice? If you're not at least a *bit* embarrassed by your offer, you're not lowballing enough. So stick to your guns, see if they come back... Else, there's going to be plenty of opportunities as it's just the beginning of the season.

Regards,
Chas

[Arctus]

Originally Posted by timmynausea

$175k was a bit of a lowball offer, and we were planning to negotiate from there. The idea that they won't budge an inch is ridiculous to me. I guess they can keep making mortgage payments for another 9 months.

Coming back the way they did gave them all the leverage in the discussion. Your only real options now is to pass or pony up $195K. Unless they were in danger in losing the house, its pretty much the only response they could give, especially if they considered your offer as a "lowball offer". Countering your counter would have left them too much of a window in further negotiations.

[timmynausea]

Originally Posted by Arctus

Coming back the way they did gave them all the leverage in the discussion. Your only real options now is to pass or pony up $195K. Unless they were in danger in losing the house, its pretty much the only response they could give, especially if they considered your offer as a "lowball offer". Countering your counter would have left them too much of a window in further negotiations.

In a sense it gave them leverage, but I think the incredibly weak market along with the fact that it's not only been on the market for 9 months, but the seller has been out of the house for 9 months gives us a ton of leverage. They sent us so many signs of weakness throughout the process only to try to play it all strong at the end, so we're basically going to try to call their bluff.

We're not going to reply to them whatsoever. We're going to make them call us, and we'll see what happens from there.

[Samdari]

Originally Posted by timmynausea

we're basically going to try to call their bluff.

We're not going to reply to them whatsoever. We're going to make them call us, and we'll see what happens from there.

This is exactly what I'd do - not even call.

But, don't be surprised or disappointed if what happens from there is nothing.

[QuikSand]

Everything in the story makes complete sense, except for this:

Originally Posted by timmynausea

The seller had a job transfer and relocated months ago, and her realtor repeatedly referred to her as " really motivated," which is partially in reference to her offering 2% toward closing costs plus another $1000 for anyone that went to this open house.

Give that entree, I like your bid, and I like your current strategy. They are jerking you around by luring in your bid with a "we're weak" signal, and then trying to play hardball. Be fully prepared to walk away, you will probably have to.

[flere-imsaho]

Originally Posted by Gary Gorski

Offer what you're willing to pay for it and if they want to play games tell them to play them with someone else. If they need to sell the house, they will. If you don't get that house it's not like there aren't thousands more you can pick from.

This would be my advice as well. Bolded the extra-important bit.

[Balldog]

When I was selling my house a couple years ago a couple made an offer that wasn't acceptable to me, I stood firm at my selling price because I didn't want them to feel they were in control. They came back with another offer that was quite a bit higher, then I countered, they countered and I sold the house.

I agree with Gary, offer what you are willing to pay. They might just not want to come down too low, too soon. I wouldn't be surprised if they were looking for the $185k range.

[bbor]

Stick to your guns....wait for them to make a offer back to you and then move from there.If they don't make a move downwards walk away.

Has the house been reduced during the 9 months it's been for sale?If not it may show that the seller is in fact NOT motivated to sell.

The house i recently bought was listed at 279 000 for 30 days...then dropped to the "rock bottom" 269 900......i offered 267 000 and the offer was accepted within 15 minutes.

[Crim]

My wife is smarter than I am, and basicly she said some sort of composite of what EF27 and QS said when I asked her. So, as in most matters, do what those two guys say...

[Solecismic]

My thoughts are a bit different.

Where you live is a very important decision. If you don't care that much, save the money and live in a cheap apartment.

Around the time you get to the point where you make an offer, yes, it's a good idea to start as low as you did. Especially if they're showing weakness.

Now, at some point after you make the offer, you'll realize whether you really want the house. If you just don't want it that much, it's not right for you and you should walk away and find another house.

If you do want it, life is too short, and a difference of $10-$15k over the life of a mortgage is not a tremendous amount of money. Basically, another $10k will cost you about $50 a month more to borrow.

Yes, that adds up. If the house is right for you, $50 extra a month is a huge bargain.

In a case like this, it never pays to be rude to the other agent or the seller. If you're rude to the seller, they won't want to budge. If you're rude to the agent, they will advise the seller not to budge. Your own agent might well conclude you're not serious about buying if you're rude to people.

If you're polite, and you really want the house, you probaby can get a bit off of the price. Just say "we're still looking, but if your seller changes his mind, we're listening." Or accept the $195k and say you're going to be very aggressive about the inspection.

There's just no sense getting irritated about selling tactics. Sellers do that. It doesn't change whether you'll be happy in the house one bit.

[timmynausea]

Our agent wanted to call and let them know where we stand (which is "not interested at that price") to be cordial, so she did that, and she said she'll let us know if they get back to her with anything new. I suppose it is preferable to be avoid being rude.

I'm interested to see what they'll do from here. We're looking at other places and preparing for the worst, but I think they'll give a little. Up until this point we've probably appeared too eager and young.

[timmynausea]

Already got a call. They're countering with $193k. We're mulling over our next move.

[stevew]

Originally Posted by timmynausea

Already got a call. They're countering with $193k. We're mulling over our next move.

Well, that's a good sign anyways.

[Barkeep49]

Considering where you're at I think they have a lot more lowering to do.