Aggressive Offer Rejected
My husband and I need advice on a house. We made an aggressive offer of $550k on a single family semi-detached house asking for $659k in Madison (really Sheepshead Bay), Brooklyn. I included a note to the seller explaining how we reached our number. The comps in the neighborhood are around $590k to $630k (much…
My husband and I need advice on a house. We made an aggressive offer of $550k on a single family semi-detached house asking for $659k in Madison (really Sheepshead Bay), Brooklyn. I included a note to the seller explaining how we reached our number. The comps in the neighborhood are around $590k to $630k (much larger lot), house next door and nearly identical sold for $600k in 2006 and construction costs to update the house (i.e. kitchen, 2 1/2 bathrooms, etc.) is at least $50k. The seller said that the price difference was too big.
The seller has lowered her asking price a few times in the last several months. She started in the 700k’s (way over priced). We thought that she was motivated to sell but now, we are not sure.
What should we do? Should we make another offer of maybe $585k? That is the max because we won’t have enough money left to renovate.
Any advice would be much appreciated. Thank you.
People are right saying if the sellers would actually take $565-585K they’d have countered at that. They’re just not ready to sell for that range. You have to wait it out until a time the seller may be more ready to negotiate in another month or two. We did that on our house and sure enough the sellers lowered the price. If it’s really true this house is priced too high then there shouldn’t be any worry the house would sell to somebody else while you’re waiting and watching.
I belive the purpose of a short sale is to prevent the seller from getting their credit hurt and the bank gets to write off the difference which is why they get the final say in everything. Whether or not that is totally accurate, I am not proposing any one method over another other than what works for you. My main point is to find out as much information as you can and today much of it is available. Once you are armed with how much they paid, when they bought it, what they owe, plus or minus improvements, add in the last 6 months of like sales in the area, your perspective of what the property is worth changes even if you have the cash to pay the full asking price.
I don’t get why the seller thinks they should be able to get more for the house than a similar house sold for in 2006. Absent other offers.
ou812, wouldn’t a short sale hurt the seller’s credit and prevent them from getting another mortgage in the future?
I don’t believe it to be a stretch at all, let alone “quite a stretch”, I believe it to be a high probability.
And I wouldn’t call those “assessing current value” sellers.
SIB,
Sounds like you did alright with your offer. I agree with those who said you should stick. You valued the house at 550K and that is what it is worth to you. When the seller finds someone who shares the same value as they do, the transaction will happen. That’s how a market economy works. You even did a little work for them, in explaining your bid. The fact they didn’t counter signals they are unsure of their selling point, or they are not familiar with rules of negotiation. First rule: sellers ask too high, and buyers bid too low.
As for the post who called your bid an insult, I think you can disregard that. They clearly didn’t pay attention to your reasoning.
dittoburg: all my realtor friends think it is definitely a buyer’s market. From my own stand point, looking for an apartent in Manhattan for a year, it seems this is the case. That said, would you mind explaining why its a stretch to imply a seller in this market is motivated?
Thanks in advance.
Find out what is motivating the seller does help.
If a remaining mortgage, plus commission (5%), plus transfer tax (whatever it is) adds up close to their ask, you have no shot and need to walk unless they are willing to pay cash out of pocket just to sell. I never bothered with these.
If they are completely underwater and owe more than it’s worth, propose a short sale. Takes longer, but they could walk away without getting hurt and you get what you want. Only probelm there is time and bank has say in everything.
If they have a big equity position and are trying to maximize profit you could stand firm assuming no one else bids higher. It’s a risk you take.
Some of these answers can be had on property shark, like how much they paid for it, when they bought it, and even what was mortgaged. Not sure what the Brokers are and are not allowed to say, but a little background information doesn’t hurt.
Bottom line, if you want it, do some research. Alot is available and much is free. Start with Propertyshark.com. Then NYC.GOV. Use the DOF and DOB links. ACRIS is a nice thing, but also check on violations too. Realtor.com has a link where you can get comps and narrow them down to SQF, Type, area, etc. If it doesn’t work for you, walk away. Don’t let emotion get in the way. Don’t trust the sellers, the brokers, the agents, there not there to do you any favors. Once you do your homework, it’s interesting how your perspective changes. Been there, done that, pissed off a few people, got what I wanted.
dittoburg:
or the sellers are baselining to assess current value. they could be willing to sell at the $659k.
its quite a stretch to imply that anyone selling now is hurting.
Thank you everyone for your feedback. We are trying to buy our first home so we are still learning.
Our offer was low and it didn’t help that the asking price was $60k above comps. I keep hearing about over inflated housing prices and the beginning of a housing price correction, but I don’t know if and when it would apply in this case. We will probably look for less expensive houses in other neighborhoods in the meantime.
“they will win this stare-down”
Really? Why on earth would they be selling now unless they had too. If they’re selling now they’ve probably got a reason to sell.
Stick to your $550.