maybe my friends on here who helped me with all your advice on selling my place can now help me flesh out a few things on buying a new place. here is the situation: we like a home that is being offered at $875,000. the owners are retirees with another home in Pa. that they will be moving to when they sell this house. they know that i have interest in the home as i contacted them by letter about 3... [more]
maybe my friends on here who helped me with all your advice on selling my place can now help me flesh out a few things on buying a new place.
here is the situation:
we like a home that is being offered at $875,000. the owners are retirees with another home in Pa. that they will be moving to when they sell this house. they know that i have interest in the home as i contacted them by letter about 3 months ago. they were so flattered by the letter that the woman called me directly and we spoke for about 20 minutes. at the time i told them (in the letter) that i would be listing my place the 2nd week of january and i was asking to start negotiating with them on price and get a 90-day contingency to sell my apartment. they had been on the market for about 4 months. she was surprised that i thought i would sell my place so fast but i told her that i "just had a good feeling about it." she said she was going to discuss things with her husband and they would get back to me. i did not hear from them. when i did check with their broker on january 6th to see if there was any activity his response was "The activity has increased. We had a lot of showings between 12/26/08 and today. Have Strong interest however they all need to sell their homes first. Call your agent and submit an offer."
i went into contract last friday and now i am conflicted as to whether i should:
a. make an offer 25-30% below asking
b. ask the owners if they will rent to us for a year with right of first refusal on other purchase offers
c. see if we can rent-to-own with a 1 year lease and try to renegotiate the price if things tank more in a year
***i first saw this place before thanksgiving and it had already been listed for about 4 months. i had contact with their broker a a few times at a showing and via email. i am not sure if he has an indefinite listing with them or a 6 month exclusive but if his exclusive ends what are the legal ramifications, if any, of me going directly to the seller at that point?
thanks in advance for all responses. if there are more details i can supply let me know.
[less]
Response by notadmin
almost 17 years ago
Posts: 3835
Member since: Jul 2008
why do you like this house so much? with the inventory available i'm afraid that showing extra interest doesn't benefit you when negotiating a price IMHO. i'll look around for other homes and if these sellers come back tell them what you are willing to offer at that time. that amount doesn't need to match your previous enthusiasm of your letter as it's a different time and they took too much to answer bla bla bla, hence, lower you bid significantly.
Ignored comment.
Unhide
Response by sniper
almost 17 years ago
Posts: 1069
Member since: Dec 2008
i have seen 40+ homes in the last 6 months - not a ton but a fair amount to get a feeling for what is going on out there. this is the only one that i walked in and felt "this is home. the couch goes right there, this one will be the office, those are the kids' rooms and look - i can see them right now learning to ride bikes in the cul de sac, etc. etc." no other home has come close to feeling that way for me. i understand that from a negotiation standpoint it might not seem like a great tactic but i am only gonna give them what i can give them and they are only gonna take what they are gonna take. this is a different market than a few years ago when i bid on my apartment and probably got juiced for an extra $15K because the seller said there was another offer that probably didn't exist. i never planned on offering them asking price 6 months ago. in fact i considered offering the 25-30% below ask but then...only now it doesn't seem as crazy as it did then. it seems the norm. they now i am interested, i am coming back to them after doing what i said i would do (sell my place) but that doesn't mean they will be able to hold me any fire.
i did not understand what this line meant:
"i'll look around for other homes and if these sellers come back tell them what you are willing to offer at that time."
Ignored comment.
Unhide
Response by sniper
almost 17 years ago
Posts: 1069
Member since: Dec 2008
admin - i think you meant "i'd" not "i'll."
not sure if i made it clear but i NEVER made an offer to the homeowners. i just wanted to begin negotiating with them therefore i don't have to come back with a lower price because there never was a price.
Ignored comment.
Unhide
Response by columbiacounty
almost 17 years ago
Posts: 12708
Member since: Jan 2009
whatever you do, i would recommend that closing on your apartment should be a contingency in any contract to buy a home. the sellers certainly won't like it but it is far better for them than a contingency on selling (i.e. finding a buyer).
Ignored comment.
Unhide
Response by sniper
almost 17 years ago
Posts: 1069
Member since: Dec 2008
good avice
Ignored comment.
Unhide
Response by newbuyer99
almost 17 years ago
Posts: 1231
Member since: Jul 2008
I like option (b) for both financial and non-financial reasons. It gives you a "trial run" for the suburbs, and specifically, this house in this town.
Ignored comment.
Unhide
Response by sniper
almost 17 years ago
Posts: 1069
Member since: Dec 2008
newbuyer - i like option B as well. seems like the safest option, the only drawbacks being trying to time the market and other prospective buyers coming to the house at some point.
the owner is not renting the house and i don't know if it is even an option for them. any suggestion on the best way to pose this option? i have contacted my agent about it but have not heard back from them yet. also, i have no problem contacting the owner myself, by mail.
Ignored comment.
Unhide
Response by waverly
almost 17 years ago
Posts: 1638
Member since: Jul 2008
I don't see any harm in throwing out a bid 20-25% off the asking price if you think it is worth it from the comps. You seem committed to moving to the burbs, have sold your apartment (crossing fingers for you) and like the house/neighborhood. See what they say. You don't have to take their counter, but what they tell you will show you a lot about the hand they are holding. If they think they can get close to ask they won't counter. If they are tired of having their home on the market for 6+ months and don't see a deal happening soon, they will play ball. You can always come back to the rent/buy option down the road. Float something to see what they are holding.
Also, the contingency point by columbiacounty was a good idea.
Ignored comment.
Unhide
Response by sniper
almost 17 years ago
Posts: 1069
Member since: Dec 2008
thanks for the advice
Ignored comment.
Unhide
Response by hdavis
almost 17 years ago
Posts: 7
Member since: Oct 2007
Hi Sniper: I'm a Realtor with 12 years in the biz. Please allow me to offer my advice.
A. Ask their broker if they have offers on the table. If they say yes, then ask them if an offer of 20% out is reasonable. They should tell you if they already have that figure. If they don't say, ask.
B. Although we are in a declining market, there is no set formula on how much off ask to bid. Some sellers have gotten a lot more realistic and they may already be 20% off the market of 5 months ago. If they have been on the market and haven't reduced, then get aggressive. Over 20%...depends. Try to find out how long they've owned it.
C. You may, since you don't seem to trust the seller's agent, consider having a broker represent you. (we are not all liars but I won't go there). You can, however, ask your broker for a NYS disclosure form (google that because all buyers and sellers should know what they are), and if you don't feel he's on the level you can file a complaint with the DOS with dire consequences to the agent.
D. All brokers have written into the exclusive agreements that they will present a list of prospective buyers, who have seen the property through them, to the seller at the end of the exclusive. If any of those buyers purchase the property within (usually) 6 months, then the owner owes the agent the commission.
E. Make damn sure you can get the loan before you sign a contract and by NO means sign a no financial contingency contract.
F. Active listings are a better indicator right now of market value. Make a list of your most important criteria, (schools, garden, fireplace, transportation) and crunch the numbers on what's out there. If you like this property a lot then there is a reason for that. If it's something other properties don't offer, and you underbid and loose the deal, that is not a win situation. Eventually the market will come back up and if you sell the property for more than you paid for it...that is a win situation.
Got it? Good luck!
Ignored comment.
Unhide
Response by sniper
almost 17 years ago
Posts: 1069
Member since: Dec 2008
thanks for the advice. it is appreciated. just to go point by point:
A. I know that they had an offer about 5 months ago of 765K and turned it down. the buyer bought something else as far my broker knows (the offer came from a client of her office)
B. This seller listed at 910K and reduced to 889K - 2%. not much of a reduction. maybe just for the mental "under 900K" thing. they have not had any reductions since i first saw it back in october. i have seen it listed as "on the market 210 days" so about 7 months. they have owned it for over 20 years, i believe.
C. I have a broker that is working on my behalf. i trust the agents on both sides. my goal is the best deal for me and the seller, though. this is in NJ so a NYS disclosure won't help.
D. I thought so.
E. Will do. No money, no house.
F. For this town in the 650K-900K range there are literally only roughly 10-12 houses that I keep seeing on the market over the last 6 months. I don't want to "underbid" but as they say in Vegas i want to bet "with my head, not above it" as well.
why do you like this house so much? with the inventory available i'm afraid that showing extra interest doesn't benefit you when negotiating a price IMHO. i'll look around for other homes and if these sellers come back tell them what you are willing to offer at that time. that amount doesn't need to match your previous enthusiasm of your letter as it's a different time and they took too much to answer bla bla bla, hence, lower you bid significantly.
i have seen 40+ homes in the last 6 months - not a ton but a fair amount to get a feeling for what is going on out there. this is the only one that i walked in and felt "this is home. the couch goes right there, this one will be the office, those are the kids' rooms and look - i can see them right now learning to ride bikes in the cul de sac, etc. etc." no other home has come close to feeling that way for me. i understand that from a negotiation standpoint it might not seem like a great tactic but i am only gonna give them what i can give them and they are only gonna take what they are gonna take. this is a different market than a few years ago when i bid on my apartment and probably got juiced for an extra $15K because the seller said there was another offer that probably didn't exist. i never planned on offering them asking price 6 months ago. in fact i considered offering the 25-30% below ask but then...only now it doesn't seem as crazy as it did then. it seems the norm. they now i am interested, i am coming back to them after doing what i said i would do (sell my place) but that doesn't mean they will be able to hold me any fire.
i did not understand what this line meant:
"i'll look around for other homes and if these sellers come back tell them what you are willing to offer at that time."
admin - i think you meant "i'd" not "i'll."
not sure if i made it clear but i NEVER made an offer to the homeowners. i just wanted to begin negotiating with them therefore i don't have to come back with a lower price because there never was a price.
whatever you do, i would recommend that closing on your apartment should be a contingency in any contract to buy a home. the sellers certainly won't like it but it is far better for them than a contingency on selling (i.e. finding a buyer).
good avice
I like option (b) for both financial and non-financial reasons. It gives you a "trial run" for the suburbs, and specifically, this house in this town.
newbuyer - i like option B as well. seems like the safest option, the only drawbacks being trying to time the market and other prospective buyers coming to the house at some point.
the owner is not renting the house and i don't know if it is even an option for them. any suggestion on the best way to pose this option? i have contacted my agent about it but have not heard back from them yet. also, i have no problem contacting the owner myself, by mail.
I don't see any harm in throwing out a bid 20-25% off the asking price if you think it is worth it from the comps. You seem committed to moving to the burbs, have sold your apartment (crossing fingers for you) and like the house/neighborhood. See what they say. You don't have to take their counter, but what they tell you will show you a lot about the hand they are holding. If they think they can get close to ask they won't counter. If they are tired of having their home on the market for 6+ months and don't see a deal happening soon, they will play ball. You can always come back to the rent/buy option down the road. Float something to see what they are holding.
Also, the contingency point by columbiacounty was a good idea.
thanks for the advice
Hi Sniper: I'm a Realtor with 12 years in the biz. Please allow me to offer my advice.
A. Ask their broker if they have offers on the table. If they say yes, then ask them if an offer of 20% out is reasonable. They should tell you if they already have that figure. If they don't say, ask.
B. Although we are in a declining market, there is no set formula on how much off ask to bid. Some sellers have gotten a lot more realistic and they may already be 20% off the market of 5 months ago. If they have been on the market and haven't reduced, then get aggressive. Over 20%...depends. Try to find out how long they've owned it.
C. You may, since you don't seem to trust the seller's agent, consider having a broker represent you. (we are not all liars but I won't go there). You can, however, ask your broker for a NYS disclosure form (google that because all buyers and sellers should know what they are), and if you don't feel he's on the level you can file a complaint with the DOS with dire consequences to the agent.
D. All brokers have written into the exclusive agreements that they will present a list of prospective buyers, who have seen the property through them, to the seller at the end of the exclusive. If any of those buyers purchase the property within (usually) 6 months, then the owner owes the agent the commission.
E. Make damn sure you can get the loan before you sign a contract and by NO means sign a no financial contingency contract.
F. Active listings are a better indicator right now of market value. Make a list of your most important criteria, (schools, garden, fireplace, transportation) and crunch the numbers on what's out there. If you like this property a lot then there is a reason for that. If it's something other properties don't offer, and you underbid and loose the deal, that is not a win situation. Eventually the market will come back up and if you sell the property for more than you paid for it...that is a win situation.
Got it? Good luck!
thanks for the advice. it is appreciated. just to go point by point:
A. I know that they had an offer about 5 months ago of 765K and turned it down. the buyer bought something else as far my broker knows (the offer came from a client of her office)
B. This seller listed at 910K and reduced to 889K - 2%. not much of a reduction. maybe just for the mental "under 900K" thing. they have not had any reductions since i first saw it back in october. i have seen it listed as "on the market 210 days" so about 7 months. they have owned it for over 20 years, i believe.
C. I have a broker that is working on my behalf. i trust the agents on both sides. my goal is the best deal for me and the seller, though. this is in NJ so a NYS disclosure won't help.
D. I thought so.
E. Will do. No money, no house.
F. For this town in the 650K-900K range there are literally only roughly 10-12 houses that I keep seeing on the market over the last 6 months. I don't want to "underbid" but as they say in Vegas i want to bet "with my head, not above it" as well.