Lowball Offer on House

[squiffy]

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.

[w_gibbs]

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.

[w_gibbs]

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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.

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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.

[Durs522]

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.

[w_gibbs]

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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.

[scott1]

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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.

[w_gibbs]

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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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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.

[Sully]

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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.

[w_gibbs]

[ 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.

[DrewDevil]

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.