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Make a low offer or wait to see if the price drops?
So H and I have found a house we are interested in, but the price is way above the comps for the area (I'm talking like $50k+ above). Seller is relocating for work, so there is motivation there. The house went on the market at the end of January.
Our realtor pointed out that so many people are lowballing these days that some agents are recommending initally overpricing in order to get more at the end of negotiating as opposed to pricing at a fair price and holding to that price. Then if they don't get any bites, they drop the price gradually. I have no idea if that is the case here though, obviously.
So my question is: make an offer that is crazy below asking based on the comps or wait until they drop the price? The market is basically dead here-houses aren't selling for an average of 6-9 months according to my realtor, and I can see this is true based on the listings. My main concern is that I don't want to overpay for the house, but it can be hard to objective when you really like a place. Any thoughts?
*This is not legal advice*
Re: Make a low offer or wait to see if the price drops?
Do you know if it's a corporate relocation listing (the buyer is being assisted by a company like Cartus)? Your agent can probably figure that out through the MLS. If it is, I would go ahead and put in what you think it a reasonable offer now. Typically those sellers will receive some sort of financial assistance (closing costs, bonus if they sell their house on their own without it going into corporate inventory, etc).
DH and I recently encountered a similar situation and we bid what we thought was fair (98% of asking + 3% back for closing). It turned out that the sellers were lunatics (according to their own listing agent) who were corporate relocation, but thought that their house was worth $150K more than it was listed for. They had received a similar offer a few weeks prior but refused to negotiate.
If you're in a slow market, I would go ahead and make an offer slightly under what you're comfortable paying for the house. Set a max and stay firm. If they're reasonable and their listing agent is good I think you have a good shot.
I agree with this.
This is what we did recently. The place was grossly overpriced and we were planning to wait until they dropped the asking price to make a move, but our agent talked us into submitting a low (but entirely fair) offer. We even included a list of comps to explain our price. What followed was a week of our agents going back and forth and us eventually just walking away. The sellers weren't realistic or motivated, so there was nothing to do but walk.
Hopefully due to the relocation, the sellers in your case will be far more flexible. I'd be a bit concerned that they listed so high over the comps though - where we're looking, we see very reasonable asking prices on homes on the market due to relocation. Most sellers are more interested in getting as much traffic as possible, it doesn't make sense to potentially narrowing down the pool of buyers who'll bother to look. Best of luck!
Thanks for your input. I did think of the relocation aspect, since I know my dad's company did that when he moved. They were willing to take a lower offer since the company was making up the difference.
The crazy asking price just worried me-are the sellers even willing to be reasonable? Only way to find out is to make an offer I guess. Our realtor is preparing a comp report and we are going to meet to go over it. It really doesn't hurt to put in an offer that we think is reasonable based on those comps. At least we have a reason why the offer is so low and we aren't just trying to lowball the seller. I will just have to be firm if they won't come down. I am a little attached to the house though. But I know H will be less attached on this, so I will make sure he stands strong even if my resolve weakens.