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Meet Me in the Middle - Buying a House
Hlubocky
Registered User regular
Registered User regular
My wife and I are bidding on a townhouse and I think we are at an impasse with the sellers on price. I'm wondering if anyone has any tricks to get things resolved.
The difference between our max price and their final offer is $20,000 (or about 3.5% of our desired price). I know they are thinking about it because they have been trying to sell since April and had a deal go bad just a month ago where the buyer failed to get financing after they accepted the offer. I'm told the price they agreed on with the previous buyer was where they are at now, $20,000 short of our max. Their realtor told ours that we are attractive buyers because we are putting at least 25% down and we are currently renting, so our closing date is as soon as possible.
Has anyone had an experience like this and were they able to overcome it? We really like the place, and could maybe come up with another $5000 or so, but I certainly don't want to drain our savings even more just to make the deal.
I'm told sometimes at an impasse the realtors will put in some of their commission to make it happen. We could also put in more and have them cover closing costs, which I guess is tax deductible for them, though that seems like just pushing the money from one pile to another and not really saving anyone anything.
I'm guessing at the places we are looking at there aren't a lot of people buying because we have seen a lot of properties that have been on the market for 200+ days, which I guess could work out in our favor. Maybe a month from now we can save up a little more and bump up our offer. Is there any other strategy I'm missing?
Thanks!
The difference between our max price and their final offer is $20,000 (or about 3.5% of our desired price). I know they are thinking about it because they have been trying to sell since April and had a deal go bad just a month ago where the buyer failed to get financing after they accepted the offer. I'm told the price they agreed on with the previous buyer was where they are at now, $20,000 short of our max. Their realtor told ours that we are attractive buyers because we are putting at least 25% down and we are currently renting, so our closing date is as soon as possible.
Has anyone had an experience like this and were they able to overcome it? We really like the place, and could maybe come up with another $5000 or so, but I certainly don't want to drain our savings even more just to make the deal.
I'm told sometimes at an impasse the realtors will put in some of their commission to make it happen. We could also put in more and have them cover closing costs, which I guess is tax deductible for them, though that seems like just pushing the money from one pile to another and not really saving anyone anything.
I'm guessing at the places we are looking at there aren't a lot of people buying because we have seen a lot of properties that have been on the market for 200+ days, which I guess could work out in our favor. Maybe a month from now we can save up a little more and bump up our offer. Is there any other strategy I'm missing?
Thanks!
Hlubocky on
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Essentially, you have to put your best offer forward and, if it's not good enough, walk away. Make it 100% clear that it is your final offer. You can even say you have another property you're going to go after. That's all you can do however.
You are definitely right about walking away... we know what we need to do, but it is so frustrating to spend a few months looking at places every week and finally find one you like only to be at a stalemate with the sellers on price.
It puts the ball in their court, explains in a non-mean way that this is your final offer, and it gives them a time limit.
It was very frustrating, and it ended up taking us almost 6 more months to find our house. Which included losing out on 4 more in the process. But in the end, we found the house we wanted and got the price we wanted. I am excited to finally be in our house, and more excited to be done with the process.
Later we found out the owner was already underwater at his original offer and refused to sell the house at a loss. So, 6 months later... it is still listed with no sales.
The moral to the story is that people are unpredictable, and make irrational decisions. If your seller won't play ball, then walk away. You can always come back later and try again after they have had a chance to stew for a while.
Walk away. See what they do. If they don't do anything, don't look back.
I didn't tell my realtor that we would really go up another 5k because I figured it has been on the market so long, what is another week or two to let them think about it. Also, we don't qualify for the new homeowners credit, so that really isn't an issue. I guess they wouldn't have to know that, though. I guess if each realtor was to earn $20,000 on the sale, and each party (us, the sellers, and the two realtors) put in $5,000, that would still leave them with 3/4 of their commission. Has anyone had any experience where the realtor gave up commission to make the sale?
We have pretty much looked at the majority of the 3 bedroom condo duplex/townhouses in the Lakeview neighborhood in Chicago (in our price range), so anything we look at going forward will probably be a new listing or a price reduction from something that didn't fit our initial criteria. I just told our agent to relay that we are holding for the time being, but he can keep the offer open. I think the closer it gets to winter the fewer people will be looking to move, so our position couldn't really get worse.
Not sure what a large purchase is in your case, but they are asking $580,000 at the moment (I assume you are talking about million dollar deals). The realtors know each other, but neither the buyer or seller are friends with their respective agents.
You do sound like great prospects with the 25% down and being renters. Sometimes it is just shuffling the money around, but depending on taxes, it can make a difference for one part or the other. Is there anything else you can throw in like 30% down? If not, it may just be not meant to be.
The amount of the loan is fixed to the jumbo mortgage limit, so any additional would have to be added to the down payment.
Just walk away...
we also talk about other random shit and clown upon each other
Yeah, I think I am just going to leave things be for now. No point in getting worked up if they literally cannot afford to lower the price anymore. I know the building is only 3 years old, meaning they bought it when the price was pretty high (I think they paid 650k), so that is a distinct possibility.
This brings up an important point, do the comps show that the price you are offering as reasonable? If you're offering 20k less than what other houses nearby have sold for, then they are not going to take the offer.
But if the comps show they are offering more than nearby houses, then you should be able to bring them down.
The wife and I bought a house back in Feb, and we got the sellers down about 25k from their original asking price. But they were motivated, as the house had been empty for 6 months and they'd moved several states away.
So it also depends on how motivated the seller is. They've had at least one other offer, so are probably hoping they'll get one after you. If their finanical situation allows them to hold out for a little longer, you're basically out of luck.
We're currently going through the same process for my daughter, in a falling market, and we've just said walk away, wait and see, don't overstretch financially. That's just too stressful. They're finding it hard, cos they really want this house, its lovely, but if its meant to be their house, its meant to be.
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Your realtor should be able to figure the last price paid for the house. Heck, some counties have this information online for anyone to look up, especially if the house has been sold lately.
To be honest, who cares if they bought high and now have to sell low. If I were you I'd hardball them for a lower price or I'd walk away. It sounds like they're desperate and they'll bite rather than lose another buyer.