Lowball Offer on House
 

I wasn't sure where to post this but you guys seem to be good at investing so hopefully you may have some insight. I am relocating and looking at a few houses. I already saw some places when I was at the new location for an on-site interview. Now I am going back down over the next few days to look some more and possibly make an offer.

I've taken the Danko and Stanley approach of looking for older homes in established neighborhoods. In the area of Texas I am going that means 1980s-built range. There is a 20-year old place with 4 bed, 3 bath. It is priced at $269,500. It was priced at $279,900 until about 2 weeks ago. The house has been on the market for over a year. My buyer's agent said he has seen the seller's disclosure and it did not reveal any problems, but the roof is the original (1987 built) and will need to be replaced. The house is exactly what I'd like and it is priced fairly compared to other places.

Regardless of how fairly it is priced, I would like to make a low offer because the seller may be inclined to come down on price since it has been on the market so long. Given the above facts, what would you offer?

I know there are plenty of other factors but I was trying to keep this as short as possible. I can elaborate if it would help you guys make a suggestion.

Re: Lowball Offer on House
 

$245,000.

Re: Lowball Offer on House
 

I'd go lower by about 10%. You really need to talk to the seller and the agent to see if you can gauge how motivated they are. This will help when making the purchase. Just because it has been on the market 1 year doesn't mean the seller is motivated. If he bought it originally 20 years ago, he may very well have paid it off.

Re: Lowball Offer on House
 

245k sounds about right.

Re: Lowball Offer on House
 

OT a bit -

I've seen Texas houses on the various house flipping shows on TV and the houses seem to be unbelievably cheap. On one I watched a lady got a 4BR 3BA place in Austin for $130. That seems like a great price unless it was in a crack neighborhood. Another show I saw this couple bought a ginormous log house with tons of land out in the country and I think the price was something like $230.

Anyway just wondering if Texas homes in general are relative bargains or if these two people just got extremely lucky.

Re: Lowball Offer on House
 

[ QUOTE ]
OT a bit -

I've seen Texas houses on the various house flipping shows on TV and the houses seem to be unbelievably cheap. On one I watched a lady got a 4BR 3BA place in Austin for $130. That seems like a great price unless it was in a crack neighborhood. Another show I saw this couple bought a ginormous log house with tons of land out in the country and I think the price was something like $230.

Anyway just wondering if Texas homes in general are relative bargains or if these two people just got extremely lucky.

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I think prices in Texas are lower than most places in the US. Alot depends on the city. For example, prices in Houston are almost crazy low. You can get a ton of house in the $200K range. I am going to Lake Jackson which is an hour south of Houston on the Gulf. Prices are slightly higher there, but still pretty good. Especially considering the other place I was possibly relocating was Jersey and I would have gotten a cardboard box and set of sheets in the $200K range there.

The thing that hurts you in Texas are the high property taxes. They don't have a state income tax, but they definitely make up for it in property taxes. I honestly think you may be getting the best of it to rent there, but I am tired of renting so I didn't do any calculations to see if that is in fact true. Case in point, annual taxes on the $269,500 home mentioned previously are ~$5000.

I believe Austin is one of the more expensive cities in Texas, so those two cases you cited seem like the buyers may have gotten somewhat lucky.

Re: Lowball Offer on House
 

why has it been on the market that long?

Re: Lowball Offer on House
 

I know housing in houston is "cheaper" but remember with Cost of living adjustments its all relative

Re: Lowball Offer on House
 

[ QUOTE ]
OT a bit -

I've seen Texas houses on the various house flipping shows on TV and the houses seem to be unbelievably cheap. On one I watched a lady got a 4BR 3BA place in Austin for $130. That seems like a great price unless it was in a crack neighborhood. Another show I saw this couple bought a ginormous log house with tons of land out in the country and I think the price was something like $230.

Anyway just wondering if Texas homes in general are relative bargains or if these two people just got extremely lucky.

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The home in Austin sounds ridiculously cheap and I'd imagine that it was either in horrible shape or in a bad part of town. Austin is most likely the highest priced real estate in the state if I had to guess. The other place sounds reasonable considering it was out in the country. FWIW, the town I live in in TX is roughly 60,000 population and upper end homes go anywhere from $100 to $130/ft.

Edit to add: I agree with others on the 245K offer.

Re: Lowball Offer on House
 

[ QUOTE ]
why has it been on the market that long?

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Thanks for the responses guys. Just to followup. I was down in Texas the past few days looking at places again. I saw the house in question again. The wife liked it but I hit a snag. We saw another house with a huge yard that she likes better. That place is overpriced and has huge operating costs. So I am in a holding pattern on the original house as I try to convince the wife it is a smarter decision.

Anyway, I found out why the original house has been on the market for so long. The owner has no real impetus to sell. His kids have grown up so he probably doesn't need a house that big now. But I found out he paid $218,000 for the house in 1997. He originally listed it a year ago at $284,500. His most recent price drop was to $269,500. I think the house is priced right now. But I will still offer $240ish if I can convince the wife to get onboard.

Re: Lowball Offer on House
 

Offer 235k and see if he gives you the "you're embarrassing me with your offer" routine. If he doesn't, then you could've saved some more. If he does, raise it a little bit and make it 239k so he'll feel good making it 243k to go. Then you make it 240k even.

Oh yeah, there's this great line about negotiating: "your offer is too high if you don't feel embarrassed by it."

Re: Lowball Offer on House
 

Just an update. Made an offer on the $269,500 house. Things actually going as I pessimistically expected. I offered $230,000. He countered at $265,000 (from the original $269,500). My thinking at this point is this: if I counter only $5000 higher, he is going to think I am just trying to slowly meet in the middle and not be willing to play ball. So I am thinking of countering at $237,500 or $240,000 to make him think I am going to come way up. Then I put the brakes on and re-counter in the $245,000 range. Then I top out around $250,000. BTW, he said he has an independent appraisal of the house that he provided with his $265,000 counter that says the house is worth $275,000. What do you guys think?

Re: Lowball Offer on House
 

[ QUOTE ]
Just an update. Made an offer on the $269,500 house. Things actually going as I pessimistically expected. I offered $230,000. He countered at $265,000 (from the original $269,500). My thinking at this point is this: if I counter only $5000 higher, he is going to think I am just trying to slowly meet in the middle and not be willing to play ball. So I am thinking of countering at $237,500 or $240,000 to make him think I am going to come way up. Then I put the brakes on and re-counter in the $245,000 range. Then I top out around $250,000. BTW, he said he has an independent appraisal of the house that he provided with his $265,000 counter that says the house is worth $275,000. What do you guys think?

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Ask him if the independent appraisal took into considerdation that the real estate market is crashing? Tell him you are willing to wait, when he is ready to deal for 230k he should give you a call.

Re: Lowball Offer on House
 

What are the market comparables?

Ask a neutral agent to provide you with market comparables.

Re: Lowball Offer on House
 

Most of the other comparables in the neighborhood don't compare well because the house I am looking at is on a street that is lower (across the board) than the rest of the neighborhood. I am trying to get into the neighborhood in case I get transferred and need to sell later. Anyway, I have 3 comparables from the same street:

Format will be (Soldprice, Sqft, Soldprice_per_sqft, Solddate)

$283,000, 2719, $104/ft^2, 02/04/2005
$240,000, 2628, $91/ft^2, 11/28/2005
$304,000, 3248, $94/ft^2, 01/13/2006

The house I am looking at is 2772ft^2, so that means if I take the average of the three prices per sq.ft. and multiply that by the 2772 of the house I am looking at that would give an expected price of ~$267,000. However, most people don't take comps beyond 2 years prior so the average of the two within the past two years would give a ~$92/ft^2 average which gives an expected price of ~$256,000.

I am not sure what the state of the housing market was in early 2005 compared to late 2005/early 2006, but that sale in February 2005 seems a bit high.

Anyway, I countered at $237,500 this evening. I will wait and see what I hear back tomorrow. Appreciate all your help guys.

Re: Lowball Offer on House
 

Well the seller came back and said "$265,000 is as low as I can go" which is pretty discouraging. Doesn't seem this guy is motivated at all. His agent said to mine "I think if your guy came back at $255,000 or $260,000 the seller might be tempted and move off his price." I read that as the selling agent trying not to lose me and trying to get me to make a big jump from $237,500. I think the seller's actual rock bottom is probably $260,000 so it will take some work to make it to $255,000. I can't believe the guy would list at $269,500 if $265,000 was really "as low as he can go." You guys ever been in a similar negotiating situation?

Re: Lowball Offer on House
 

It is really difficult to negotiated with unmotivated people.

It is even harder to "negotiate" when you are using a go between like a real estate agent.

Maybe you can get an appointment to see the seller directly.

Other than that, just to prove a point, I would just throw in another counteroffer at the SAME PRICE and walk on to the next house.

BTW, what price are you looking to buy a house at?

Re: Lowball Offer on House
 

First, I want to thank OP for a great post. I would like to see more such posts re: negotiating for a good price on cars, homes, etc.

I may go back and try to post some info on my car buying efforts in 2006 and 2007. Hopefully others will have some experiences they can share.

I think you are letting your emotions get in the way of your rational thinking.

The FACTS you present in your post directly conflict with the STATEMENTS you make.

You clearly state that there are appraisals and comparable sales that show the house is worth more than you bid. You characterize your own bid as a lowball offer. And yet you are surprised and disappointed that the seller is not stupid or desperate enough to have taken it.

You WANT a great home at a rock bottom price. But when you make a lowball offer, that is below market, by definition, very few rational sellers will accept.

Now we don't have any solid statistics. But if you are offering 230K for a home that is worth 250K, then a rational seller who is not desperate simply won't take it. He will wait a few months until he can get 250K from a rational buyer.

Lowball offers can work. But if they are 20-30% below market, then you may only have a 1% success ratio.

If you make 100 lowballs offers, then you might get one acceptance if that.

So if you are making lowball offers, then you have to accept the fact that you will very likely get rejected. And if you want too long, you may lose the house.

So you need to balance your desire to get THIS HOUSE, with your desire to get a GREAT DEAL on some house.

The chances of getting an incredible deal on any one house is exceedingly small even in a down market.

Also, you need to rethink what market value really means. The home is worth only what you are willing to pay and the buyer is willing to accept.

It's possible, as you yourself wrote, that the seller is in no rush to sell. He has plenty of cash, plenty of equity, and plenty of time. So why would he accept a lowball offer, unless he is desperate, or unless your offer is not a lowball offer, but a reasonable offer at the market rate.

If you really WANT this particular home, it looks like you will have to offer something closer to the asking price and closer to the market value, based on comps. Otherwise, give up and move on, or just wait and see if he comes down. But if you wait too long, you may lose the house to another buyer.

I think you overanalyze the negotiating game in your earlier posts. You offer what you think it's worth, or a little less. And he either takes it or not. It's pretty simple.

Given the info in your own posts, I cannot imagine why you would have expected the offer to be accepted.

Remember, he has already come down from his original asking price, so he may be reluctant to go down much more.

If the market is going down, and if you are patient, you very well may be able to force him to come down. But you will have to be patient and wait. Just say your offer is firm. Make no counter. And walk away. If no one else makes any offers, then he will have to start thinking about coming down.

But realize that when you try to get a great deal with a lowball offer, you will probably LOSE a very very high percentage of the homes you bid on. Period.

You will gain experience as you do more buying and selling of stocks or make more offers on homes.

You should be asking an experienced local realtor what is happening in the market. And how much homes are selling for below asking price, on average. This info should be available to a reasonably competent, reasonably experienced realtor.

Re: Lowball Offer on House
 

In theory a patient seller could live there for 20-30 years until he dies. So based on this fact that you yourself present, you should not expect him to take a lowball offer.

In his mind, he has already dropped the asking price 5%. And you want him to come down another 11%.

Yet you yourself say there is another house you like more that is OVERPRICED.

If there are 100 homes in the market in that price range, then only two data points are not enough for the reader to determine whether the home is fairly priced, under priced or over priced.

If the seller is over priced and irrational, and can afford to hold out forever, then he won't come down.

If he is over priced and irrational or emotional, but can only afford to hold out for 6 months or a year, then in 6 months or a year, he will sell it at the market price then.

So if you want this house, you have to either increase your bid, or wait patiently and risk losing it.

Getting a good price on a home or in any negotiation seems to be a game of chicken. Whoever is more desperate will break down or cave in or blink and pay the asking price or accept the offer.

The party who genuinely wants it less or can make a good show of wanting it less, generally wins.

Re: Lowball Offer on House
 

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BTW, what price are you looking to buy a house at?

[/ QUOTE ]Tien, I am looking in the mid-200s.

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The FACTS you present in your post directly conflict with the STATEMENTS you make.

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Your points are well taken squiffy. Appreciate your comments. I think I am going to try to wait it out a bit. Unfortunately, I do believe the house will sell around $260,000 during this season, so I can't wait forever. My plan is to tell my agent that I am going to think about it. I don't really feel like my agent is committed to the deal. For example, when I inquired about the date of the independent appraisal, I mentioned that housing prices have dropped during the past few months. My agent said that the appraisal was done in a downtime (Nov 2006) so that doesn't really matter. Then I mentioned the numbers on price per sq.ft. for the comparables I listed above. He replied with some comment about statistics only being numbers and houses are purchased by humans with emotions. I realize that is true, but I was like WTF. I am trying to give this guy some ammo for the negotiations and he isn't interested. I really would prefer to be negotiating the deal myself. Anyway, maybe if my agent thinks I am getting ready to walk it will inspire him to really sell the fact that we are a young couple and trying to get into the house at a reasonable price. Then I will come back next week and tell him to prepare an offer around $245,000. I will see if the seller is going to come off the price at all and determine my next play.

Re: Lowball Offer on House
 

A good agent should be able to provide you with some hard STATISTICS about selling and asking prices.

But as you mention, you have to be very careful about an agent's OPINION. Most agents have a simple economic incentive. They want to spend as little time working for you as possible and make as much money as possible.

If they are representing the seller, their incentive is to get him to lower his price a bit to make a deal, and if they are representing the buyer, their incentive is to get him to raise his offer a bit to make a deal. The agents don't make money unless there is a sale. So ironically, there are stats and studies showing that people that use agents generally sell for a lower price or make a higher offer, than they normally would have, without an agent.

It makes sense. The agent wants his 3% commission as soon as possible. And a change of 5K to 20K in price to make a deal happen, doesn't really affect his commission all that much.

It's unfortunate. But it's hard to find an agent who is not only knowledgeable, but truly has your best interests at heart. In theory they should. But in reality, they are selfish players, like everyone else on the market

An agent can be helpful in many respects. But you should definitely stick to your guns on pricing decisions.

If you want to make a lowball offer and are willing to wait, then do it and heck with the agent.

Though keep in mind that a lowball offer might alienate some sellers and might cost you some deals.

You have to be very careful not to let the agent call the pricing shots. Listen to their advice, but try to get them to provide some hard data to back up their OPINION, and then make your own decision about what price to offer and whether to stand firm.

If you can afford to be patient, be patient. Agents are in a rush to get the deal done at your expense. They need to eat and they need their commission. If the sell doesn't go through they don't eat. So they are happy to have you spend an extra 10K or 20K more, so the deal gets done sooner.

Re: Lowball Offer on House
 

Dont know if you thought of this but.... Get rid of your agent and his percent goes to the sellers agent who then uses it to pay closing cost so the seller can drop his price by about $7500.

Re: Lowball Offer on House
 

[ QUOTE ]
Dont know if you thought of this but.... Get rid of your agent and his percent goes to the sellers agent who then uses it to pay closing cost so the seller can drop his price by about $7500.

[/ QUOTE ]

I thought about going that route from the beginning. I have a friend that does home closings and he suggested I contact the selling agent directly and offer him 4.5% commission (compared to the 3% if I used a buying agent). Unfortunately, I am in another state and doing the deal via fax/email/phone. Your statement brings up an important question I have been meaning to ask though. Assuming I decided to make a future offer on my own, I would at least need an attorney to draw up the contract, correct? I spoke to an attorney and they said it would cost somewhere in the $500 range. That would be a cost that I would have to cover, correct? So to make that a winning proposition, I would have to be sure I got at least a $500 savings compared to my results with an agent?

Also, what are the ethical issues if I later dumped my agent, contacted the selling agent directly and tried to negotiate a deal on the house I have been discussing? I don't recall reading anything in the sales agreement I signed about being obligated to make any further offers on this particular home through the buyer's agent I am working with. And I did not sign any kind of contract other than the sales agreement which obligated me to work with this buyer's agent on future purchases.

Re: Lowball Offer on House
 

it seems as though the longer the house is on the market, the less apt they are to accept lowball offers. how much does the room cost to fix? accept his offer of 265 or w/e assuming he throws in the entire price of getting a new roof. easy game. when we got our house, we got them to give us an extra 15k to fix pool/ac stuff/some some small foundation issues.

Re: Lowball Offer on House
 

You could use an attorney. You could also google real estate contracts and find what you need. Legally, it you dont need an attorney. Just two people with a written and signed agreement will hold up in court. As far as saving $500, you already did if you dump your agent. Fax/e-mail/phone is just how its done. Why drive as far as across town if you don't have to.

If you have a problem with the ethics behind not using the agent you have tell them your not pleased with their effort. This way your giving them the option to shoot the ball, pass, or sit on the bench. Just be aware that any agent will want to get the deal done fast, easy, etc. They don't see you as a future asset as they would if you were a real estate investor.

I forgot about the roof issue. A definite must in your price negotiations.

Re: Lowball Offer on House
 

Update:

My agent called me a few minutes ago and asked if we had decided anything. I explained that the roof is point of contention (perhaps for buyer and seller). I said counter at $250,000 plus roof of my choosing up to $10,000. He said okay. He calls me back 5 minutes later with an insta-counter.

Seller: $259,500, no roof

I feel like I am getting outplayed after the flop. My original upper ceiling was $250,000 without roof. Now I am at that number. It seems weird to counter at a number lower than my previous offer (e.g. $245,000 without roof). Not sure what my play is here. I really would like to get the roof put on as part of the deal. But all along I was willing to stretch my upper ceiling without a roof to $255,000.

Re: Lowball Offer on House
 

You seem set on this particular house. If that's the case, your lowball bid didn't work. Just make your best offer and say it's firm.

If you aren't set on this house, move on. If he's motivated, he'll come back to you.

Re: Lowball Offer on House
 

id say offer 259 with roof, and if he says no make sure he knows he can go [censored] himself. this guy seems very unwilling to deal though, and that makes it tough. he seems to not really care if he gets the house sold, so you prob dont have a whole lot of leverage here.

Re: Lowball Offer on House
 

A lot of sellers want to sell as is. Few sellers want to take the time and effort to fix up their place.

It's especially risky for a seller to spend 10K on a new roof that you may or may not like or that you may or may not approve.

I really side with the seller on this one. Unless I were really desperate, if I were a seller, the last thing I would want to do is have a sale contingent on your liking the quality or price of the new roof.

If you want a new roof, you should put it on yourself. If you think the home is only worth x with an old roof. Just offer x, what you think it's worth with the old roof.

This isn't some fancy Texas hold em hand in the final round of the World Championships. You don't get style points for degree of difficulty. Bet for value.

I cannot imagine why you would want to make a new roof part of the negotiations. It's only going to complicate things.

Offer him what you think the home is worth, then walk away. If you get it. Then spend the 10K to put your own roof on.
I really disagree with how you are looking at this, particularly at the issue of the roof.

When negotiating for a huge purchase like this, you need to keep things simple.

A lot can go wrong if he hires a roofer and the roofer does a lousy job. All the risk is on him. Plus he cannot predict if you will be reasonable and approve the roof, or be unreasonable and reject it based on some idiotic objection.

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[ QUOTE ]
It's especially risky for a seller to spend 10K on a new roof that you may or may not like or that you may or may not approve.

I really side with the seller on this one. Unless I were really desperate, if I were a seller, the last thing I would want to do is have a sale contingent on your liking the quality or price of the new roof.

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the SELLER isnt getting the roof fixed. he is basically knocking off 10k of the price so that YOU can fix the roof to your liking, and if u dont like it, thats your problem as you already closed on the house. this is a completely standard thing that happens in a TON of real estate transactions. i wouldnt make a deal without something like this.

Re: Lowball Offer on House
 

So Seller has come down from 279,900 to 259,500 as is.

And you are really offering 240,000 as is (250,000 with seller to pay for 10K roof.)

So you are about 20K apart. What does your agent say about the home owner. Is seller getting any other offers, have there been any other showings?

If the 259,500 sale price offer is reasonable, then eventually he may sell it for more than 240K. But only time will tell.

Re: Lowball Offer on House
 

The key wording was "roof of my choosing, not to exceed $10K expense to seller". Basically that means I hire a roofing company get an estimate and have them do the job. If I get a $15K roof, seller is only obligated to pay $10K of it. I am not putting myself in danger of being dissatisfied with the roof because I am choosing it.

Selling agent said they are going to get an estimate on how much it will cost to replace. I am going to wait to hear back before I counter. If roof estimate isn't too high, I may counter at $255,000 and ask him to pay my closing costs. Because I have raised my price to $250,000 I feel like I need to keep it up around that level, so I am trying to find a way to still get a good deal and offer in the $250s.

Somebody mentioned that I seem to like this house. That is true. This is going to be my primary residence. But I still think I can get the best of it because I am willing to walk away and rent an apartment for 6 months if necessary.

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[ QUOTE ]
So Seller has come down from 279,900 to 259,500 as is.

And you are really offering 240,000 as is (250,000 with seller to pay for 10K roof.)

So you are about 20K apart. What does your agent say about the home owner. Is seller getting any other offers, have there been any other showings?

If the 259,500 sale price offer is reasonable, then eventually he may sell it for more than 240K. But only time will tell.

[/ QUOTE ]

Officially he came down from $269,500 to $259,500. He had just dropped the price from $279,900 to $269,500 about 3 weeks before I made my first offer.

And yes, you could look at my $250,000 plus $10K roof as $240,000.

Re: Lowball Offer on House
 

You seem really set on getting this house. If that's the case he's pretty much got you by the balls. I don't know your situation, or why you're so interested in this particular house, but I will say that getting this attached to a house you haven't purchased yet is a bad idea. You need to look at it more as if this guy doesn't want to take your offer, fine, let his house stay on the market another year. Sellers often get this idea in their head about what their house is "worth". The problem is that even though his house is "worth" that much in his mind, in reality if it was "worth" that much it would have sold. The market is obviously telling him (and you) that the house isn't worth what he is asking for.

I don't know about your specific location, but with so many houses on the market right now you shouldn't have trouble finding a reasonably priced house. Stay within the allotted amount you had in mind for purchasing a house. The extra 20K you spend today could end up being a good chunk of change on a 30 year mortgage.

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You seem really set on getting this house. If that's the case he's pretty much got you by the balls. I don't know your situation, or why you're so interested in this particular house, but I will say that getting this attached to a house you haven't purchased yet is a bad idea. You need to look at it more as if this guy doesn't want to take your offer, fine, let his house stay on the market another year. Sellers often get this idea in their head about what their house is "worth". The problem is that even though his house is "worth" that much in his mind, in reality if it was "worth" that much it would have sold. The market is obviously telling him (and you) that the house isn't worth what he is asking for.

I don't know about your specific location, but with so many houses on the market right now you shouldn't have trouble finding a reasonably priced house. Stay within the allotted amount you had in mind for purchasing a house. The extra 20K you spend today could end up being a good chunk of change on a 30 year mortgage.

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I think compared to someone that does real estate investment, yes, I am more committed because

1) this is going to be my primary residence
2) if I don't get this place I will have to get an apartment instead, which I'm not that excited about

I am still going to do my darnedest to get the best of it though.

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2) if I don't get this place I will have to get an apartment instead, which I'm not that excited about


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There aren't any other houses for sale in this area? That seems unlikely.

Worst comes to worst, sign a 6 month lease and start looking again in 5 month. Most expect the market to go down, not up in the meantime.

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[ QUOTE ]

2) if I don't get this place I will have to get an apartment instead, which I'm not that excited about


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There aren't any other houses for sale in this area? That seems unlikely.

Worst comes to worst, sign a 6 month lease and start looking again in 5 month. Most expect the market to go down, not up in the meantime.

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There are other houses but I move in about a month and have alot to do, so I won't try to find another home and make an offer. I am far from the new location right now. If I don't get this place I am going to do what you said.

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[ QUOTE ]
[ QUOTE ]
Dont know if you thought of this but.... Get rid of your agent and his percent goes to the sellers agent who then uses it to pay closing cost so the seller can drop his price by about $7500.

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I thought about going that route from the beginning. I have a friend that does home closings and he suggested I contact the selling agent directly and offer him 4.5% commission (compared to the 3% if I used a buying agent). Unfortunately, I am in another state and doing the deal via fax/email/phone. Your statement brings up an important question I have been meaning to ask though. Assuming I decided to make a future offer on my own, I would at least need an attorney to draw up the contract, correct? I spoke to an attorney and they said it would cost somewhere in the $500 range. That would be a cost that I would have to cover, correct? So to make that a winning proposition, I would have to be sure I got at least a $500 savings compared to my results with an agent?

Also, what are the ethical issues if I later dumped my agent, contacted the selling agent directly and tried to negotiate a deal on the house I have been discussing? I don't recall reading anything in the sales agreement I signed about being obligated to make any further offers on this particular home through the buyer's agent I am working with. And I did not sign any kind of contract other than the sales agreement which obligated me to work with this buyer's agent on future purchases.

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For someone who is trying to be smart and wise about the process, this statement shows that you don't understand a lot of the basics.

Your first step is to figure out if you have signed a "Buyer's Agency Agreement". I can't tell from your post.

If you don't have an agreement with your agent, then you could probably try to go directly to the seller's agent. But if I were the seller's agent, and someone made three offers through another agent then tried to cut them out of the deal, I wouldn't even talk to them any more. They just wouldn't be the type of person that I would feel comfortable dealing with.

Obviously this would be a decision that I let the seller make, but my advice would be to steer clear.

In negotiations like yours, I think it is best just to sit back at this point. If the house sells for more than you wanted to offer, then you don't feel bad. But every day that passes gives you more chance of getting a low price. Especially if you aren't raising your offer every other day.

If you like a house and the seller won't respond to several low offers, you have to be willing to

a) raise your price
b) walk away

It's not your agent's fault. It may take months, or even years to get a "steal" in any market. And usually first-time homebuyers or people new to town aren't the ones who get the deals. There are others who have more experience and have done more homework in that market.

Re: Lowball Offer on House
 

[ QUOTE ]

For someone who is trying to be smart and wise about the process, this statement shows that you don't understand a lot of the basics.

Your first step is to figure out if you have signed a "Buyer's Agency Agreement". I can't tell from your post.

If you don't have an agreement with your agent, then you could probably try to go directly to the seller's agent. But if I were the seller's agent, and someone made three offers through another agent then tried to cut them out of the deal, I wouldn't even talk to them any more. They just wouldn't be the type of person that I would feel comfortable dealing with.

Obviously this would be a decision that I let the seller make, but my advice would be to steer clear.

In negotiations like yours, I think it is best just to sit back at this point. If the house sells for more than you wanted to offer, then you don't feel bad. But every day that passes gives you more chance of getting a low price. Especially if you aren't raising your offer every other day.

If you like a house and the seller won't respond to several low offers, you have to be willing to

a) raise your price
b) walk away

It's not your agent's fault. It may take months, or even years to get a "steal" in any market. And usually first-time homebuyers or people new to town aren't the ones who get the deals. There are others who have more experience and have done more homework in that market.

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Sorry if I wasn't clear. The only thing I have signed is a contract to purchase the home. I just didn't know if that somehow bound me to use my buying agent in any further negotiations on this home. I didn't sign a separate contract to let this agent represent me in other home purchases. I agree though, the agent probably wouldn't be keen on dealing with someone that dumped his agent this far into negotiations, even if it meant the selling agent might get more commission.

Also, I got word yesterday that they cannot get the roof estimate until next week. That is fine with me, because I agree that the more time that goes into the deal, the better it is for my chances of getting a lower price. Thanks again for all the helpful suggestions.

Re: Lowball Offer on House
 

You have to be willing to walk away. If you fall in love with one particular house, you'll end up paying more than you want to.