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Offer not even countered - kind of bummed
DH and I put in an offer yesterday only to hear back today that the sellers have no intention of budging from the asking price. Our offer was only 7% below, which we thought it was a reasonable place to start. While we could afford asking, the price point is pretty high considering that there is no real walkway to the front door (the only usable entrance for guests) and the kitchen isn't updated at all. It's probably a good $20k or so of work.
Anyway we both agreed that as much as we like the place, our best bet at this point is to keep looking. It just stinks because given the time of year, we may not see much in the way of new listings until the spring and we were hoping to start a family soon.
Sorry, just needed to vent a little. I'm sure the perfect house is out there somewhere.
Re: Offer not even countered - kind of bummed
Ditto this. They are obviously unrealistic if they think they are going to get a full priced offer now adays. They probably are underwater and can't afford to go lower, if that is the case they should have left themselves some wiggle room for negotiations!
Thanks, we definitely plan on keeping it on our radar. DH's parents had the offer on their first home flat out rejected and the sellers came back a few months later, asking if they were still interested. While we're not going to pin our hopes on that, we're not ruling the place out entirely either.
What have recent comps sold for --- that would be a better indication of what the pricing should be.
A functiona,l but slightly outdated kitchen is OK in most neighborhoods.
this!! The right house will come along whether this one down the road or an even better one. Keep your hopes up
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If looking solely on square footage, comps say it's overpriced by $20/25k. But it's a small town and homes this size aren't the norm, so the comps can easily be thrown off by a single home that sells particularly high or low.
The comps are mixed in terms of updated kitchens/baths but the other issue is a total lack of a proper walkway to the front door. All they have now is a few stones in the grass and it's uphill - we get tons of snow come winter and that's the only entrance for guests. It's just really shoddy and doesn't compare with the comps, which all have nicely finished walkways.
We've talked about submitting a higher offer in another week or two just to let them know we're still interested if they're willing to be a bit flexible - does that seem like a good idea?
We had the same situation. Then a week later the sellers came back to us and we ended up going under contract on our terms.
This may not happen, but walking away when you feel you aren't getting the best deal is the right thing to do.
Are they represented by a realtor?
They're doing one of three things:
1) Trying to play hardball.
2) Underwater and genuinely have it listed at the lowest they can afford to go
3) Just being dumb or stubborn and believe they should get what they're asking for.
I personally think it's probably #1. Generally when negotiating, the parties ultimately end up somewhere in the middle. So the starting point for the buyer and seller are really important. In this case, if they started negotiating with you now, maybe you'd meet around 3.5% below asking price. But let's say they refuse to budge from asking price and you come back with a higher offer only 4% off asking price. At that point, they counter and you end up meeting in the middle of that at 2%. Their tactics worked to their advantage big time. I bet that's what they're doing. The logical tactic for you to use then is to walk away. If that's what they're doing, and the market isn't so hot in your area, I'd predict that they'll contact you within a week or two to make a counter. Have you informed them that since they're unwilling to negotiate even a little that you'll be walking away?
If their reason is #2, they're dumb. Unless the market is pretty strong (desirable area with limited supply), they're not going to get asking price...unless they find an equally naive buyer. If that's their floor, they needed to price the house higher to start.
Same reason for #3. You price a house with wiggle room to go down. You can be as stubborn as you want, but your house is only worth what someone will pay for it.
If you haven't heard anything in a couple weeks, and you really want the house, it can't hurt to submit a slightly higher offer and see if they'll counter there. But, I wouldn't pay asking price for a house in this market.
Thanks for the advice. They aren't underwater (we did a TON of research before putting in the offer) so we think they're just trying to play hardball. They just bought the place a couple years ago for about 6% below asking, so they had to assume offers would come in below asking. We're actually leaving town for a week and whether we ever hear from them again, it'll be nice to take a short break from this whole experience!!
Sorry but this is one of the things that annoys me the most. You have no idea what their mortgage balance is on the house. They could have refinanced at the height of the market and cashed out some equity. So now they might be underwater with current home values. If they bought for $100k and then cashed out and refinanced for $150 but home values now are only $125, they are still underwater even though they are priced higher than their purchase price.
I'm not sure how long ago "a couple years ago" is but if it was 06- beginning of 08 then they bought at one of the heights of the market and could want more than it's really worth NOW. Also, interest rates have continued to drop over the last 5+ years so odds are good that they've refinanced and could have cashed out.
Good luck with the home buying process. I'd give it a few weeks and keep looking. If you keep coming back to this house and it's still for sale, then put in a slightly higher offer.
It's a little strange that they didn't counter - 7% below asking isn't too bad of a 1st offer. Did you include a pre-approval? What kind of financing are you using? Did you ask them to pay closing costs too? Did you include comparable sales prices and show why you feel your offer is reasonable?
As a seller, I would've countered probably no matter what, but I'd definetly want to see an pre-approval, and honestly, if I had a choice (which in this market, I really don't), I'd much rather work/negotiate with a Conventional Loan than FHA or VA. I would give a better price to a Conventional buyer with no closing costs than a FHA with closing costs.
Though, if these people didnt' counter at all, they sound like pretty unreasonable people in this market and you probably don't want to work with them.
Are you united with the CCOKCs?
If you are an experienced buyer and did not sign a contract with your buyers agent, I would work directly with the listing realtor. You will get closer to the mindset of the seller and who knows, they may cut their commission to make this happen. I have had great success with this. However, if you need handholding, you are better off with a dedicated buyer's agent.
Last, if this is the perfect house for you, it may mean paying a little more than you want. Typically the buyers end up paying alittle more than they want, and the sellers take a little less....that is how deals happen. Your offer may of been too low for them to negotiate. Go in with a stronger offer.....an offer that you are comfortable with in comparison with your alternatives. Make it high enough so that if someone else buys the house you don't regret it because you wouldn't of paid that.
It's so hard to find the perfect home, so if this is it.....it may be worth splurging for.
Does your state have a mortgage contingency clause? If so, that would be your safety net......the bank won't give you a loan if the purchase price is too high (assuming a standard down payment), and the deal will fall apart or the seller will concede.
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