Offer on overpriced home? (negotiate, asking price, transaction, financing)
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*In our case the seller came down 21% with the last one and it took around 3 days to reach that agreement and 2 rounds of negotiationing.* it was also worth noting the house was sitting longer than others but everyone was afraid to make a offer and offend them. We went and intial feeling was disbelief by sellers but eventually we had several people tell us they walked the house but did not put in a offer out of fear of rejection and would certainly have purchased at our closing price. We also worked on another house before our final one and it eventually it closed 19% below asking and 1% above our offer (4 months later).
The strategy you outlined is pretty solid. It seems it did include negotiation as opposed to "agreed beforehand to accept the results of appraisal" and as such the appraisal was really more a way to get the seller to see the folly of being over 20% above comps. I am glad that both agents helped get a result that all parties felt was fair.
Yes. Appraisals are just a opinion and can vary in quality by a wide degree. Plus every seller has their own things than can add or subtract value in their own head (in our case it was walking distance to all our local schools and we have little kids).
Why are you scared to make a offer? In general don't trust the realtors. How are they supposed to evaluate your offer if your basically just gossiping with their agent (who if she is not good may not have been talked to the clients)? What's holding you back from making a offer?
It only takes a few hours to write a offer and at worst you might offend them (and they would not have taken your offeranyways.
.) Right now you sound like a lookie lou but not a actual buyer. More like a dreamer.
Quote:
Originally Posted by maddog49
Chet we are also in ththe Chicago suburbs in a relatively good but not extremely expensive area. We did not let a appraiser pick our final price (very difficult in our area as it was almost 100% custom built and every house is different by a fairly large margin ie 1800 square foot ranch next to a 3600 square foot ranch or 4200 square foot 2 story with a wide degreen of finishes). However as we still had a mortgage we had to still get a appraisal in the end. Either way OP needs to put in a offer and see where it goes. She's wasting her time with the realtor and it sounds like she does not actually have the ability to purchase (or cant convince her husband to put in an offer). Since she's never talked to the actual sellers it's almost all idle conjecture at this point and will eventually hurt her negotiating position when her realtor says she's been hanging out for months trying to buy a house.
*In our case the seller came down 21% with the last one and it took around 3 days to reach that agreement and 2 rounds of negotiationing.* it was also worth noting the house was sitting longer than others but everyone was afraid to make a offer and offend them. We went and intial feeling was disbelief by sellers but eventually we had several people tell us they walked the house but did not put in a offer out of fear of rejection and would certainly have purchased at our closing price. We also worked on another house before our final one and it eventually it closed 19% below asking and 1% above our offer (4 months later).
Quote:
Originally Posted by maddog49
Yes. Appraisals are just a opinion and can vary in quality by a wide degree. Plus every seller has their own things than can add or subtract value in their own head (in our case it was walking distance to all our local schools and we have little kids).
I am not scared to make an offer. My husband has agreed to make an offer. I was waiting for a while until the sellers had time to recognize that as much as they want to sell for $x, their home is not worth even close to that. I think the fact that they are doing an open house shows they are starting to recognize their current strategy is not working. Also, the market is very slow here right now, so I have some reservations about putting our house on the market at this time of year. Which is why I am having the realtor come over to discuss it. Also, before I make an offer, I have to get a letter from my financial advisor that I have the means to purchase. I was also trying to decide whether to in at my top price and say no negotiating, which is what my financial advisor suggested that I do.
*In our case the seller came down 21% with the last one and it took around 3 days to reach that agreement and 2 rounds of negotiationing.* it was also worth noting the house was sitting longer than others but everyone was afraid to make a offer and offend them. We went and intial feeling was disbelief by sellers but eventually we had several people tell us they walked the house but did not put in a offer out of fear of rejection and would certainly have purchased at our closing price. We also worked on another house before our final one and it eventually it closed 19% below asking and 1% above our offer (4 months later).
THIS is what I am thinking, too. They may well reject my offer but at least if it does sell for what I think is worth, I will have tried.
Are you going to be a "no need to finance this" buyer???
Quote:
Originally Posted by Grlzrl
I am not scared to make an offer. My husband has agreed to make an offer. I was waiting for a while until the sellers had time to recognize that as much as they want to sell for $x, their home is not worth even close to that. I think the fact that they are doing an open house shows they are starting to recognize their current strategy is not working. Also, the market is very slow here right now, so I have some reservations about putting our house on the market at this time of year. Which is why I am having the realtor come over to discuss it. Also, before I make an offer, I have to get a letter from my financial advisor that I have the means to purchase. I was also trying to decide whether to in at my top price and say no negotiating, which is what my financial advisor suggested that I do.
If you have sufficient assets to make this purchase without any financing contingencies that dramatically shifts the potential strategies that you may want to consider. While some folks will say "it does not really matter if you claim to be a cash buyer because at closing the seller stills get paid in full from the lender" that does not going into the psychology of the deal. A seller who has had deals fall apart on "financing contingency" can trick them self into believing that a deal that did not appraise out meant the seller did not have the cash to meet their unrealistic asking price; that's rather different than the buyer not being comfortable offering above appraised value! Of course you have to be careful that the seller does not perceive a "no financing contingency" offer as coming from someone with "bottomless pit of cash", as might have been the case during the heights of the tear down craze, that era is gone in most of the Chicago suburban market!
If this is not a situation where you have assets on hand to do the deal without financing the letter should come a trusted lender / mortgage broker who has done your pre-qualifications.
I personally do not like letters from even well know "financial advisory" firms, they never seem as "real" to sellers as those from a traditional bank. It has nothing to do with the actual competence / reliability of financial advisory firms, its a perception that the buyer is "not mainstream". Now in reality there are certainly a whole lot crazy rich people banking with Chase, BofA, Citi, Wells Fargo, Harris/ BMO, but they sound a lot more normal to most sellers than somebody that has an advisor at Morgan Stanley, Goldman Sachs, Merrill Lynch, Edward Jones, Raymond James, etc ... If you can get the letter from somebody in the former group you sound a lot less "crazy rich" to buyers even if the "wealth" you have under advisory is barely enough to get your kids through school and keep you from living living like a bag lady in retirement. If your financial advisor is at a firm with a name that is not broadly known you risk a clueless listing agent saying "sounds scammy to me"... Work with a normal sounding bank if at all possible; I've personally moved investment account(s) into regular banks with ease, they are happy to help folks who ask.
Second -- your wealth advisor CLEARLY has no conception of how to make an offer to any seller if they truly suggest making your literal TOP OFFER first. I don't mean you offer half of what you think is fair, or even 95%, but pretty every experienced agent will advice to literally leave SOMETHING for the not real clued in seller and their likely bump-on-a-log listing agent to hem & haw over. Maybe that means going in $10k under your top, maybe $20k, maybe $5k, but make it SOMETHING so that if they counter you can at least go up without going bust. It always goes a long way to making listing agent and seller feel like they got at least SOME CONCESSION...
If you have a home to sell you also must have done the math on how big a discount you may need to accept from peak prices to do the deal, that does complicate your financials, but if must make your offer contingent upon the sale of your home that will not make seller eager to really agree to even your "no financing contingency" offer as the ticking clock for fall sales will quickly come to a standstill as the "holiday freeze" sets in -- very very few home are sold in the Chicago suburban market after Thanksgiving...
Met with realtor. She says I want to be the second offer, not the first, because they will have a bad feeling about the first person who offers low. She said she knows there are two others circling this property but agree it's overpriced. But we are going to get our house ready to list and put it on the private listing place right after making our offer to show we are serious. Obviously we don't want to list our house if we don't have a contract in place.
You will be in a extremely difficult position if you want to offer significantly less than their list and have to try and sell your own home in a buyer's market. Still though stranger things have happened so let us know how it works out.
You will be in a extremely difficult position if you want to offer significantly less than their list and have to try and sell your own home in a buyer's market. Still though stranger things have happened so let us know how it works out.
My new realtor says I will have a much better shot at that in the winter months and if I have my listing up and ready to pull the trigger immediately.
I might be able to do it without a contingency but I have to talk with my financial advisor again about it.
Ok, so they held the open house today. My new realtor went by but didn't get a chance to talk to the seller's agent. About 8 groups showed up, which my agent says is good. She says likely it was 2 serious buyers, 1 who wanted to see it but because of the price did not make an appointment and the rest looky loos. By the time I got there, my agent had left and some guy was talking the realtors ear off so I had to wait til he left. She came and introduced herself to me and I thought maybe she forgot who I was so I told her and she said she knew. I left my shoes in the front foyer and after about 5 minutes, picked them up and she saw me and said 'Leaving already'? I told her I was going out in the backyard. After the guy left, she asked me if I was still interested and I said 'Yes, at the right price'. She said something like "Who know what it will sell for'. She's a tough nut. Anyway, my agent is going to call her and feel her out and see if she has had offers. The agent also said the owners were 'out of town' so I am thinking they might have moved to their new house now. She then told me this was the first open house (which I well knew).
And I also asked if they would be interested in selling the furniture since I know they bought a new house and she said yes they would. Yeah on that because I want a lot of it. She has some gorgeous antiques. I really want to make an offer but I want to see what my realtor can worm out of her about existing offers.
Another interesting thing my agent said...she said it's a specific taste that not all buyers would like which is great for me because it's MY taste. She said younger buyers want all grey and newer finishes. I love it as is and don't feel like I would need to go much to it at all.
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Are you going to be a "no need to finance this" buyer???
