Is it a slap in the face to receive such a low ball offer?!
Our house is listed for 285,000. We're BELOW fair market value. Comps on our exact house in the last 60 days are: 290, 291 and 283. We listed it low to sell it fast.
There is also another home (exact floor plan) and we have WAY more upgrades, and they're listed at 290. (they were 322 before we listed our house on the market!) The median home listing in our neighborhood is $327,000. Ranges from $265,000 to $400,000.
So, today we get an offer for $255,000. Plus closing costs, and a $3,000 realtor bonus.
This makes me want to punch them! Is it rude, or are they playing a game.
Our realtor is coming over tonight to discuss this, and obviously come up with a counter offer... but really!!!??This message has been edited. Last edited by: alikatgrrl,
D not be insulted. This is a business deal. They will not get a steal if they don't ask. Just say no. Counter with whatever your realtor suggests.
Take a deep breath. Remember that when you put your home on the market it becomes it becomes a house, a commodity.
As metwo said. I would probably counter back with your original full list price. It lets them know you won't play their game, and they will move on to the next try.
Very common to get low balls when a home first hits the market. Some investors, flippers, and just plain bargain hunters try to make money or get a home from desperate sellers whom will take the first offer they get.
You can choose not to counter at all or counter back with your full price. Both approaches tell the buyers that you're not interested in their game playing and that they'd better get serious if, indeed, they are serious buyers.
Thanks everyone. I know I really shouldn't take it so personal. We countered back at 275,000. We gave them 24 hours to reply, so we should hear back by 7pm tonight. Fingers crossed...
Wow -- you were generous to drop your price so much considering that you're already under the comps and your buyers would be getting a far better house than the comps.
I don't know your market or your personal situation, so maybe you're anxious to sell or have to sell and that's why you came back with $275k. If you're in a position to ride this out a bit longer, adding "best and final" to your counter would a good idea so they don't continue trying to chip away at the price.
Also, remember that they can still come back to negotiate after the inspection to try to go even lower...
Hoping that on top of dropping your price so dramatically you are not giving them closing costs also I hate that.
Remember that any of us may give suggestions that do not apply to you because we have not seen your house and do not know the market in your area.
Have you heard back yet?
They replied to our counter offer, "Thank you for counter offering. The house is absolutely beautiful. $255 was the top of our budget, so we thought we could try. Good luck"
So... there goes that.
Only have 4 weeks left to sell.
Well that explains the low offer, it was their budget, nothing more. Hope this breaks the ice...any you get several more decent offers in the next few weeks.
I spent a very few minutes reviewing the listings for that zipcode. If that offer were say, 255K w/o the closing cost reductions, based on my very limited add'l information, I might call it a reasonable, opening offer.
We have a saying around here, in one of the hottest R/E markets in the U.S.: "First Offer, Best Offer". If you want to dump this home asap instead of waiting it out for a few thousand **$ more, max, and possibly losing your other (dream?) home during that period, you might consider calling those folks and saying that you found another home but must close immediately. (You need a new story so you're not negotiating against yourself and/or your own interests.)
Perhaps give them a last/final offer at $255 or $260K (or whatever your realtor, a local area expert, recommends after reviewing the comps), no deductions, as-is, i.e. no inspection adjustments and close in 30 days.
??? What do you think?
Best to you -
A $3,000 Realtor bonus? For what, giving away your house? Wow, that took some nerve by that agent to even suggest submitting that request with such a low ball offer. I think the $275, counter was overly generous. It leaves you nowhere to go in the negotiation.
Also, what does their agent think offering taking them to a house so far over their budget? That is also unethical. An agent would be doing their buyer a disservice by showing them homes they cannot purchase. Yes, with their permission I do show my buyers properties a little over their budget but it is on homes that are priced a little high and we know we can get a little break on the price.
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I realize that if you need to dump a house real fast you will have to do everything possible and loose all kinds of money in the process.
Hopefully that people use a little more knowledge and perhaps never put themselves in those positions unless there are no options.
Now, having said all of that. I am getting tired with the issue of giving closing costs to anyone that want's to bye a house, I don't mind negotiating the overall price of the house but the expectation that I should provide closing costs is getting really abusive by any buyer.
Question on ethics. If they insist on seeing it doesn't the agent have to take them even if it is way over budget?
Yes, the agent must take them if they ask, but the agent should not be the one presenting the property to them as an option.
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It's the same situation with the offer. If the buyers want to submit a low ball, the realtor is obligated to present it.
Yep. The agent is obligated to present all offers, as the decision is for the seller to accept or decline.
A sellers agent can give opinions and suggestions for possible counters, if asked.
Yes, the agent is required to submit the offer. What I don't understand is where they got the idea to include a bonus to the buyer's agent.
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That is strange, Charming. It's almost like they have a realtor who isn't going to be paid through the regular commission structure or something.
Unless the selling agent % is super low for the local market. Instead of 3% if that is common in the area they are only offering 1.5% or 2%. But, I never discuss what my commission is going to be from the sale to my buyers unless their is a bonus involved. They are few and far between these days so it has not been an issue.
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This is obviously not a statistical sample, but --
Excluding both new builds and the OP's home, the 5 single-family-homes currently listed on realtor.com in the OP's zip code at offering prices between $280,000 and $285,000 are listed at an average of $99/sq. foot.
The OP's property is currently listed at $135/sq. foot. Without any adjustments for realtor bonuses or other closing costs, a net offer of $255K equals approximately $121/sq. foot.
The other homes appear to be the same type of zero lot line homes (or slightly larger) in the OP's development.
ETA: If you're checking them out, the 1 listing at $285K even (1,922s.f.) is also a new build so it was excluded from my calculations.This message has been edited. Last edited by: SurfNow,
To OP - don't act desperate. Remove Realtor bonus from listing. Have a Realtor meeting to discuss "TRUE" COMPS!! Don't be afraid of lowballs...
many of my closings started with lowballs...you just need to learn how to play "ball"!!
Your Realtor now knows your "willing sales price"--be very careful...and review those sold comps asap...or a upfront appraisal may save you thousands!!!
My advice is to stay at current price until
proof of value.This message has been edited. Last edited by: real estate lady,
My suggestion is sit down with your agent and have a clear discussion as to what is going on in your area. How many homes have sold and closed in the last 3 months, 6 months? How many homes have gone "pending" since yours went on the market? Forget the agent bonus...mark down your price by that amount. What is your competition? Is there something going on in your neighborhood that has effected the sales of homes? good or bad?
Decide what you are willing to do to move into the next home.
Thank you all for your replies. I'll try to answer all of your questions:
In my area, zip code isn't a way you can look at comps. It's nearly 40 miles wide miles, with hundreds of neighborhoods. It's also not 'square'... it's the oddest shape (like a odd shaped U). You can google it, if you would like to see more. Comps in our 'area' are that of only about 7 miles, so those are the comps that we are comparing to.
My neighborhood is a pretty isolated area. Typically people who shop my 'area' are really only interested in this neighborhood alone. Because it is a little further away, it's a specific taste and will definitely take a specific buyer. It is smack dab in the middle of the desert, and mostly mountain side (I know, to anyone outside of AZ sounds like the most awful place to live- I agree!!). It's very quiet and very far from the city. It's a master plan community with pools, walking trails, bike trails, lots of parks, etc. The community itself is about 3 square miles.
As far as value, we are well under priced. In fact, one house that is the same floor plan as mine went under contract last sunday at full asking price ($289K). That house has a smaller yard, and none of the features our house had. The reason the couple bought that house and not mine was simply for the ONLY reason that they wouldn't have to keep up with grass maintenance. (we still don't understand- for $5,000 they could have re-done the landscaping... - but we're not bitter... glad to get some solid sales in the neighborhood, and glad to get some competition off the books)
In my neighborhood $147/sq foot is average pricing. We are priced at $134/sq foot.
We are also well under all sold comps in the last 60 days in 7 square miles.
We definitely have a bottom line price and have discussed with the realtor those prices. We are willing to be VERY negotiable, but we're not getting much traffic or any offers in to do so. Still to this day, thats our only offer. Yes, our realtor did agree that our $275,000 counter offer was way too overly generous and suggested we didn't go that low. A few realtors in the area with homes pending thanked us for not doing so, because we would have pulled comps down. We're not being greedy... just want to get it sold!
Luckily all realtors in the area have been kind enough to let us know what prices they're taking on their homes that are under contract or pending so we don't have any surprises on prices when they close.
Realtor bonus is gone from listing, it has been since that offer came in. Agreed, that was a dumb idea. We though it would draw more attention to our house, and it didn't.
We have added "buyer will consider paying up to $5,000 in closing costs". Meaning, if it's a really low offer obviously we wouldn't. If it's a decent offer, we would. All would be negotiable in the contract.
We definitely know how to play ball, we just had some people who flat out couldn't afford our house. Their realtor informed us that they insisted on seeing our house because they loved the photos. She warned against, but they wanted to try. Makes sense, worth the shot. They tried to up their qualification with their lender, but couldn't. The max they could qualify for was $255,000. The said they would have paid top dollar, but simply couldn't afford it.
There have been 6 homes go pending since ours went on the market (31 days ago). 5 of them at higher price points. Average time on the market in this neighborhood is currently 30 days.
The only new builds in a 10 mile radius from our home start at $378,000. Luckily for us, these new builds are literally 1/4 mile away (and start at 2100 sq feet).
Thanks for all your help. We're considering a significant price drop at the end of the weekend to get some traffic in if this weekend is slow again. We only have a little over 3 weeks to get it sold. That is the max the new home builder is allowing. (we were given a 60 day contingency)
I don't recall ever doing a zip code search for comps.
Can you post a link to your listing?
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I assure you~~~ appraisers do not use a zip code search for sold comps when appraising, and search the community for sold comps. Can they go outside of the community to get comps, yes.
Here are a few thoughts ---Why insert "consider closing costs?" What you are doing is offering up buyer assistance even if they have their own closing costs. Oh h*ll yes they'll take it. If a buyer needs it,believe me, they will ask ask for it in the offer.
Why not be patient a couple weeks and let that comp that just sold close( to become a sold CMP)...for your benefit... for more bucks.
Stop giving your money away!
Wait for that $289,000 to close-your agent can monitor that--..you are at 275 and considering reducing?? Oh, brother.This message has been edited. Last edited by: real estate lady,
REL, we're at 285
It was the offer for 255, when we countered for 275.
We are going to be patient for a few more weeks. Thanks for the advice.
Yea, the whole closing costs thing irritates me, but my agent is sure that will help. We shall see. (she said that every listing that has closed in the last 60 days has had to pay CC)
YES I KNOW...JUST MAKING A POINT,
SO IMPORTANT....If you countered at 275..you are at 275..in your MIND and your realtors' thought process.. Just be careful with your numbers, and your pocktbook. SOLD COMPS ARE KEY.This message has been edited. Last edited by: real estate lady,
WRT the question of closing costs within the listing, I agree with REL. IMHO, it's a price reduction and negotiating against yourself. The buyer will start at that point and request further concessions from there.
Also agree about the home pending at 289K. It's not a comp until close. Sounds like they've provided concessions to the buyer so it isn't full-price.
The 289K house is the home on W 70th, very close to you, correct, alikatgrrl? According to the listing, this home has a 16% larger lot and appears to be a corner lot. With all due respect to you and your home, I would expect that home to sell faster and at a higher price.
You have a zero lot line home. What buyers will pay for, IMHO, is space away from their neighbors. Nobody wants to criticize your home. It's not unusual for buyers to select one item that's different about your home (e.g. your lawn) and use that to explain why they passed on your home.
WRT the beautiful improvements in your home, it appears that the other homes also have various types of improvements so these may cancel each other out. In addition, your improvements appear to be very taste specific, giving your home a Nantucket feel. I am not sure how your style sells in AZ. (Have you discussed this with your realtor?) In addition, you probably understand that no buyer will compensate you $ for $ on your upgrades.
WRT the lawn, if AZ has the same water issues to other areas, it can be a liability. In addition, each time you suggest a buyer can complete a project themselves, e.g. $5K for the lawn and/or completing that 4th bedroom, you're adding expense and hassle to a potential buyers' life. Unfortunately, it's another reason buyers may select a competing home, IMHO.
I took a few minutes the other day and located/reviewed the comps you cited above. (AYK, the 289K is not a comp, however.) IIRC, in general, the biggest difference may be that homes on the other side of your street/neighborhood have open space behind them. One of those homes had incredible mountain views. Even if they're the same model with a similar lot size, that open space and the absence of rear neighbors makes them feel larger than your home, IMHO. I believe an appraiser would call that a "locational difference" and give those homes a positive value adjustment.
Realtor.com shows you at 279.9 today. It appears you're matching your neighbors, a new listing across the street. Although their home's slightly smaller, they were a former model so they have many upgrades plus open space.
I apologize if I'm not telling you what you'd like to hear. I looked at a number of the listings in your area, all within 2 minutes driving distance of your home and believed the others would sell first.
You mentioned earlier that the 289K listing rode the market down from 322K, IIRC, over the past year or so. (I believe they started at 325K, actually.) Unfortunately, the current market trend lines that I saw for your area point downwards.
I believe that because AZ suffered such huge price declines during the crash, when the market recovered a little over a year ago, many homes flooded the market. Although I don't know the specific inventory totals for your area, I'm guessing there's a fair number of homes that were held off the market during the crash. Now that these homes are (probably) on the market, all other economic conditions being equal, the increased inventory can easily create a buyer's market, IMHO.
In addition, it appears that builders may not have been able to obtain financing for a few years, so they've also returned to the market, creating even more competition. I noticed a few short sales and foreclosures in your area, too.
I may be totally wrong but these were my general impressions when I looked at your area for only a few minutes. You previously indicated that neither you nor your neighbors were getting showings. That's another indication that the homes may be overpriced.
As always, the pricing decision belongs to the seller. If you need that particularly price, it may take a little longer to sell your home, relative to the competition.
OTOH, the perfect buyer who craves Nantucket style may walk in tomorrow and pay full price. You never know. (To market RE successfully, we typically attempt to appeal to as many buyers as possible instead of trying to find the specific buyer who prefers a certain style.)
In any event, I hope you are enjoying your new home very soon! Best of luck -This message has been edited. Last edited by: SurfNow,
Surfnow you have given a very clear explanation. One other thing is if six homes have gone pending in the neighborhood since listing, they had a value to buyers that the original poster is lacking.
Meanwhile, the easiest way to sell a home is reduction after reduction, without determining true value. Risky business for the seller.
Equity can be left on the closing table..in realtor bonuses, price reductions, lack of negotiation, paying buyer closing costs,
and lack of marketing, i.e.open houses, advertising etc.
A listing Realtors' job and duty is to get the highest and best possible price. Power of negotiation is a must have asset for a Realtor to be successful with their sellers.
Just because" a house" in the neighborhood sells for less doesn't mean a seller has to their reduce their home.This message has been edited. Last edited by: real estate lady,
Personally I have never recommended bonuses to agents and there are times when the seller's have lost "equity" due to poor representation. But, overpricing can also cause a listing to become first stale and secondly to develop the perception that there is "something" wrong with the property to have not sold. Both are a disservice to the seller.
All anyone on here can do is speak generalities and from a quick look at realtor.com, zillow, etc. In my experience poor traffic is usually an indication of overpricing, buyers market, or something in the area that causes buyers to look elsewhere.
One house doesn't make a trend either up or down.
Agree with both of you guys, REL and lakelark.
I believe I mentioned it above but just to reiterate, I did look at each of the 4-5 comps mentioned by alikatgrrl plus the trend charts for that area.
alikatgrrl, I hope you understand that we all want to help you. It's extremely difficult to essentially divorce yourself from your home and see it as a commodity - an item of inventory.
I didn't notice the 6 pendings. Can you provide those street addresses, alikatgrrl? They're not comps until close but if your market is trending downwards, they may assist you with your pricing decision.
If you price it realistically, alikatgrrl, hopefully you can avoid becoming another stale listing and also get into your new home!
Based on your actions, reductions, bonus, offering to pay closing costs...I am wondering if you are in a buyers
market. However if six sales are pending in your neighboring, may be a sellers market. Do you know, if not, just ask your agent. even bad staging can keep a house from selling. Many buyers can get deterred with stuff!This message has been edited. Last edited by: real estate lady,
Agree, REL. I'm confused about the six pendings. The OP stated on her other, current thread "38 left to sell" that neither she nor anyone else in the neighborhood was getting any traffic whatsoever.
Tough to generate offers without showings! Can you fill us in alikatgrrl?
Here's a good example of her possible mindset in my opinion and I hope OP really thinks about this..............
I once showed a home and the seller was home. He kept off to thte side, and we were able to tour the home without interuption. As we toured we saw him in the backyard, so we were free to converse. The buyer said to me -"I love it and I want to make a full price offer-I don't want to lose it".
We were existing the door and the seller says :" if you buy it today, I'll take off $5000.00". We wrote the contract less $5,000.This message has been edited. Last edited by: real estate lady,
Have seen those same situations, myself, REL - and it's one of my biggest pet peeves - negotiating against yourself.
You were extremely reasonable by writing the contract with only a 5K deduction, IMHO. Your buyer definitely didn't want to lose the home. Many people would have accepted the 5K deduction from the contract price as a starting point for the negotiations and then asked for additional concessions of another 5K or so, e.g. closing costs, carpet allowance - you name it!
P.S. alikatgrrl, I noticed 1 pending at N. 69th (?). They were priced at $279K (IIRC) without any rear open space but did have a gorgeous, fully-landscaped salt-water plunge/splash pool. In some areas, pools can be liabilities but in AZ, it's probably another positive value adjustment.
I haven't seen any mention of a community pool for your neighborhood. If you have one through an hoa, that might reduce (but probably not eliminate) the positive adjustment for that property, IMHO.
Anyway, I'm hoping you scored at least a few showings, alikatgrrl, over the weekend and return with some great news!
This is all just my 2 cents, as usual -This message has been edited. Last edited by: SurfNow,
I see OP has not posted since 5/16. I truly hope she realizes that we are trying to be helpful.
I don't see where she posted her MLS number/city and state.
That really would be helpful.
Truly important for a Realtor to have price set ripe for negotiation.
Otherwise may not have the power, thus leaving seller equity on the table.This message has been edited. Last edited by: real estate lady,
You don't have to get pissed because of this. If you don't find the price fair, simply say "No" and look for a better deal.
All the best!
I reported the previous poster for advertising on this and a slug of other threads. If we all do it perhaps someone at Scripps will take note. At least this post will bump all of them down the thread.
Same here, REL. I couldn't give her the answer she wanted, unfortunately. It's so hard to see your property through buyers' or other third parties' eyes. Didn't want her to punch that poor buyer, lol!
She posted her MLS number and then deleted it. I have it but won't disclose it w/o her permission.
I punched in her realtor's name and noticed that bio information was missing from her broker's website. It's probably not a big deal but made me wonder if she's a part-timer or not very active.
Let us know how it's going alikatgrrl. Showings??This message has been edited. Last edited by: SurfNow,
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