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September 24, 2007
Making an Offer
First-time buyer here. I'm interested in a property that I believe is extremely overpriced by at least $800K. Without getting too much into it, it's basically a shell, but it's being sold at a move-in condition price, taking into account comparables recently listed on the same street. Is it better to make an offer at substantially less, say $600K less, with an "explanation" for my offer (and risk offending seller and maybe eliminating myself from future offers), or should I wait it out and see if the price decreases?
Comments
you need more details here. where is this home? the repairs needed are cosmetic and choice or necessity? how big is it? what was the original ask? maybe with this info some of us can help you with a realistic response and $.
Posted by: guest at September 24, 2007 9:08 AM
Do not worry about offending the seller, and you should have the confidence to tell the broker why you think the property is overvalued. I always do, and most of the time the brokers tell me they agree and the seller would probably accept an offer int he region of XYZ.
In all likelyhood they are not getting any offers in the current market, and your very low ball offer will help them come down to reality (waiting for the property to stay in the market for a while also helps, and you may want to ask the broker if any offers have been made and what has happened to them: the less offers, in the current market, the more chances for negotiation - down).
What I don't understand is this: if you think the property is overvalued by 800k, why would you offer 200k over? In my opinion, if you think it's worth 800k below, you should start bidding 1 million below, and then (as they lower their price) you increase yours slowly, trying to meet them at the price that you think it's appropiate.
You should know - low ball offers are very common, and lots of sellers are really hoping to get a stupid person pay asking but will actually be willing to negotiate if that brings them what they want (sell the property).
Posted by: guest at September 24, 2007 9:49 AM
OP here. Thanks 9:49.
9:08, I don't want to provide too much detail on the property itself because I'm sure the seller, and definitely the broker, reads this blog. Anyway, as I said, it's essentially a shell--very much demo'd on the inside. Only a few walls (maybe 2) remain and there are no floors anywhere. There are very few details remaining, which you'd have to pay tons of money to have restored. But no floors, walls--all demo'd. So you have to build the house from scratch on the inside. What I can't fathom is how this house is listed for the SAME price as another house on this exact block, which I've seen and is in pristine, move-in condition, with tons of nice details. Also, shady ownership history, open violations, lack of permits, illegal C of O. The only thing this house has going for it is location and facade--because, I repeat, there is no house on the inside. You have to build it. I am totally baffled by the price they're asking for this property.
Anyway, I guess I'll try to sort out the property history and legal issues first while I watch the listing. Thanks again.
Posted by: guest at September 24, 2007 2:06 PM
Be respectful and bid what you feel is appropriate. Explain to the broker your process wrt/comps . . . which sounds like you've done some homework. And if seller gets offended, don't worry about it. If their asking price is way over that of comps they're probably not as in tune with the market as you. You might actually be doing the broker a favor.
You're offering what you think is a fair price. What moe can you do? Good luck!
Posted by: Johnny at September 24, 2007 3:38 PM
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