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Hello everyone. I've been perusing the posts and have not seen a situation similar to mine. I'm looking for some feedback so here goes.
We've been passively looking to purchase a home in a neighboring town for several years. We finally found one that meets nearly all our criteria, so we entered a bid. However, the list price was astronomical. A good 8% over recently sold comps. So in order to create a bracket in which we were able to "meet in the middle" so to speak, we felt we had to bid quite low.
Fast forward and we are 10 counter offers into the process, and still with a 30K gap. The sellers agent keeps citing "comps" in different neighborhoods (which, in my mind, aren't comparable) and she quotes old comps that perhaps have higher sales prices than those that sold in the last 6-8 months. She also claims to have lines of prospective buyers at the door. Which is not likely as the house has been sitting on the market for 9 months.
We finally got disgusted with the whole cat and mouse nonsense and went back to her with our "best and final," which is on the high end of the recently sold comps, but still about 9% off her list. Now I am experiencing major anxiety waiting for her next move.
I guess I am just looking for feedback on this process, since this is my first time buying from a seller (our last home was new construction so there was not much negotiating taking place since the "seller" was the builder). Is she B.S.-ing us? I keep reading on these forums that sellers get annoyed at lowball offers, but we felt that was our only recourse with the unreasonable list price. As we know, list prices do not determine market value, sale prices do.
I'll also add that the "seller' is actually a relo company. I don't know how that affects the situation.
I have had a lot of experience with offers. It is not that uncommon when a "team" (bank, corporate relo group, etc.) is involved in the process everything is delayed. I even put a 48 hour limit on most of my offers and the deadline sometimes is ignored. Its frustrating. At this point you can only hang in there and wait.
A new tactic I am trying is -- if my best offer is not accepted, & I'm totally unwilling to increase the offer and I don't believe there is real competition for the property -- is to make a last overture pending offer. I write the seller a letter explaining my reasoning for the price I delivered, explain it is final, and write that if they want to circle back in 3-6 weeks the offer stands while they continue to market the property. I tried this and it worked. I think I will do this again in the future as the situation fits.
Fast forward and we are 10 counter offers into the process, and still with a 30K gap. The sellers agent keeps citing "comps" in different neighborhoods (which, in my mind, aren't comparable) and she quotes old comps that perhaps have higher sales prices than those that sold in the last 6-8 months.
Comps from homes in comparable neighborhoods are good comps, especially when there are an insufficient number of near term comps in the same neighborhood.
She also claims to have lines of prospective buyers at the door. Which is not likely as the house has been sitting on the market for 9 months.
Yeah, sure.
We finally got disgusted with the whole cat and mouse nonsense and went back to her with our "best and final," which is on the high end of the recently sold comps, but still about 9% off her list. Now I am experiencing major anxiety waiting for her next move.
I guess I am just looking for feedback on this process, since this is my first time buying from a seller (our last home was new construction so there was not much negotiating taking place since the "seller" was the builder). Is she B.S.-ing us? I keep reading on these forums that sellers get annoyed at lowball offers, but we felt that was our only recourse with the unreasonable list price. As we know, list prices do not determine market value, sale prices do.
I'll also add that the "seller' is actually a relo company. I don't know how that affects the situation.
Thanks for any comments or feedback.
It's very unusual, in my area, for a relo company to engage in the cat and mouse game. It's all about the bottom line for them, as it should be. Delays are common becasue often times, the relo company has to obtain approval from the sponsoring employer.
We gave a significant lowball on a house we thought was significantly overpriced and still on the market after a year. They didn't take it. They ended up renting the house out.
The obviously overpriced ones are a conundrum. There's one in our area now that's been on 9+ months and as of a couple days ago, one of the listings now says "BRING ALL OFFERS!!" But it's easily 25% overpriced. The fact that they aren't dropping the price makes me think they're not serious about negotiating downward.
And....if there's a big enough gap between list and sold price, I'm wondering whether the tax assessor will call it a "fair" market value.
If this guy was within 15%, we'd consider making an offer. As it stands, we'll wait.
To clarify, the comps she cited did not bother me b/c they were in another neighborhood - it was that this other neighborhood was too different to be considered "comparable," i.e., much larger homes with more property. So yes, to no one's surpise they showed higher selling points! Again, I'm not an agent, so I dont know what consitutes a true "comp" but these weren't comparable.
We do have our own agent. He's been advising us on counters through the process and agreed with our decision to offer a best and final. He thinks our offer is in fair market range and that her list price is artificially high. He's also called her out on her wacky comps.
What we do know is that the relo company paid the original seller (the family who relo-ed) a price on par with the current list. Why they paid them so far above market, I cannot say - bad market analysis, part of their relo package? Who knows? But is it possible the relo company has set a floor for themselves since they overpaid for the house to begin with? I would think they'd want the thing off their hands since it has extremely high carrying costs. And even if their perception is that our offer is "low" it is certainly not unreasonable.
Last time I bought a corp relo (in 2001) the relo company didn't actually buy the house but facilitated the move and the employee's corporation bought the house. I made my under market bid for the house about 4 weeks before the end of their fiscal year and set a close date for 2 weeks out (I was preapproved) so they'd have the house off their books in time for their annual report. If its a public company, it might be worth you finding out who they are. I got a great deal on that place......
Just be comfortable with walking away if they can't meet your price. Don't force it. And at this point, there's nothing you can really do, it's up to them and how motivated they are. If they want to end this 9 month fiasco, then they'll probably be more willing to budge. If not, then keep looking. Don't make any decisions that you are not 100% about.
Comparables in other neighborhoods are not necessarily invalid, even if they do have some extra features your neighborhood does not have. You just have to adjust the prices to compensate for the value of these features.
Your best negotiating tool is to say, Thanks but no thanks and be able to walk away.
Say goodby and then check back from time to time with an offer that you do not negotiate up from. If the market does not change or they do not find a sucker, they will see reason and accept before long.
We finally found one that meets nearly all our criteria, so we entered a bid. However, the list price was astronomical. A good 8% over recently sold comps.
We finally got disgusted with the whole cat and mouse nonsense and went back to her with our "best and final," which is on the high end of the recently sold comps, but still about 9% off her list.
1. These two paragraphs contradict each other.
2. Are these comps the same comps that the sellers are using? Or different comps? I think I know the answer but still very confusing.
3. From what I see, your final offer is close to your comps. I wouldn't go higher. The seller is bluffing.
Here's another tactic that worked. My buyers made their final offer. The seller did not accept it. About 5 days passed, and guess what. The seller's agent called and said he was writing up a new offer to us. We worked it out, and buyer paid slightly higher than his other offer, but not as high as the seller's final. I believe the seller's agent did this as a way to show his seller that she was in control.
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