Annoyance to seller: Sorry your condo is only worth X amount of dollars

short+sassy

I just wanted to vent a little bit!  Over the weekend, I put in two offers for real estate investment properties.

One of them was a 2 bd. condo listed at $41K.  Except when my agent ran the comps...and there were a lot of comps available so I feel pretty solid with her analysis...the comps came back at $32K.  So I offered $32K.  The listing agent contacted mine and was like, "Hey look, I know my client's bottom line is $38K, or they lose money."   I told my agent, I'd be willing to bump my offer up to $34K...even though I'd be overpaying...because it would still cash flow nicely.  But the seller is out of their minds if they think anyone is going to pay 19% more than their condo is worth.

Nope.  They won't sell for less than $38K.  And that's why their property has been languishing on the MLS for three months, even though it is a hot seller's market right now. 

Look, I get it.  It sucks to have to sell at a loss.  But facts are facts.  The only thing I can think of is, if they need to bring money to the closing table, they don't have it.  So they are hoping for some fairy godmother buyer to buy way over market AND have the funds to pay more if a bank's appraisal comes back short.  Unfortunately, in the meantime, they are wasting a lot of money paying the HOA, mortgage, insurance, and taxes on a condo no one is living in.

I'm still waiting to hear back on my second offer.  I offered their asking, but there was already an offer in.  I REALLY want this second one.  It would be an extra good monthly cash flow, for the price paid.

short+sassy

Update:  Never mind, just got the word the seller went with the other offer for the second one.  Meh!  Back to the drawing board.

jtmh2012

short+sassy said:

Look, I get it.  It sucks to have to sell at a loss.  But facts are facts.  The only thing I can think of is, if they need to bring money to the closing table, they don't have it.  So they are hoping for some fairy godmother buyer to buy way over market AND have the funds to pay more if a bank's appraisal comes back short.  Unfortunately, in the meantime, they are wasting a lot of money paying the HOA, mortgage, insurance, and taxes on a condo no one is living in.

The house we ended up buying was shown empty.  They'd moved out of the house back in 2008 and were between renters.  Basically told their agent, sell it, rent it, whichever happens first.

The only good thing is it just appraised for more than we paid two years ago....

short+sassy

jtmh2012 said:

short+sassy said:

Look, I get it.  It sucks to have to sell at a loss.  But facts are facts.  The only thing I can think of is, if they need to bring money to the closing table, they don't have it.  So they are hoping for some fairy godmother buyer to buy way over market AND have the funds to pay more if a bank's appraisal comes back short.  Unfortunately, in the meantime, they are wasting a lot of money paying the HOA, mortgage, insurance, and taxes on a condo no one is living in.

The house we ended up buying was shown empty.  They'd moved out of the house back in 2008 and were between renters.  Basically told their agent, sell it, rent it, whichever happens first.

The only good thing is it just appraised for more than we paid two years ago....

Sweet!  I mostly look for cash flow with my investment properties, but if appreciation happens also, that is just an added bonus.  With that said, condos usually appreciate more slowly than houses.  That condo isn't going to be worth $38K anytime soon.

I'm just bummed because I made a more than fair offer and it was still turned down.  And then I lost out on the second one because they took the other offer.

Oh well!  Onward and upward.

kmurphy2131

a little late to this conversation but we were in a similar (but weirder in my opinion) situation last month.  A really nice house came on the market.  The house was updated, and had a good location town wise and commute wise, but was on a main road (a quiet section but still) and had a utility easement & conservation land restrictions so there was no buildable land on the lot for even a shed.  In other words, the house just couldnt sell for what it would sell for on a cul-desac without easements.  There is a crazy sellers market here, so they did open houses wed, sat, sun, and collected offers Monday.  We offered less than asking price but agreed to their contingency that they had to find somewhere to live before closing.  On Tuesday they asked all four offers to do best and highest, which in my mind is crazy because I think if you know you are in a multiple offer situation you do that from the start.  We know that there were 4 offers on the house: we were 15K under asking w the contingency they wanted, one offer was less than ours, one was above ours (not sure if it had the contingency), and one was for asking price but wouldn't accept the contingency. In the end they rejected all four offers!!!!  They wanted asking price & their contingency.  

The asking price was significantly over market value (probably about 10K or so, it's hard to account for the main road & easement in the comps), and the longer you let a house sit the less likely you are to actually get asking price.  So why would you pass up an asking price offer?

short+sassy

kmurphy2131 said:

a little late to this conversation but we were in a similar (but weirder in my opinion) situation last month.  A really nice house came on the market.  The house was updated, and had a good location town wise and commute wise, but was on a main road (a quiet section but still) and had a utility easement & conservation land restrictions so there was no buildable land on the lot for even a shed.  In other words, the house just couldnt sell for what it would sell for on a cul-desac without easements.  There is a crazy sellers market here, so they did open houses wed, sat, sun, and collected offers Monday.  We offered less than asking price but agreed to their contingency that they had to find somewhere to live before closing.  On Tuesday they asked all four offers to do best and highest, which in my mind is crazy because I think if you know you are in a multiple offer situation you do that from the start.  We know that there were 4 offers on the house: we were 15K under asking w the contingency they wanted, one offer was less than ours, one was above ours (not sure if it had the contingency), and one was for asking price but wouldn't accept the contingency. In the end they rejected all four offers!!!!  They wanted asking price & their contingency.  

The asking price was significantly over market value (probably about 10K or so, it's hard to account for the main road & easement in the comps), and the longer you let a house sit the less likely you are to actually get asking price.  So why would you pass up an asking price offer?

Exactly!  The market is what the market is.  That seems crazy to not at least work with one of the offers.  Generally speaking, I would think if a seller is turning down four different offers...who all know they are competing...there is something askew with what the seller wants and they are just making an uphill battle for themselves. 

jtmh2012

I guess when you don't have to sell and you can afford to wait it out.

short+sassy

jtmh2012 said:

I guess when you don't have to sell and you can afford to wait it out.

And I think that is often what happens.  Seller's will put their place up for sale but, if they aren't in a hurry, are more just waiting for the perfect deal to come around.

However, according to my agent, a negative of doing that is buyer agents will quickly stop wanting to take their buyers to that house.  And even the seller's agent will start to get irritated.