Made an Offer on a House
Community – I just made an offer on a house. The list price was 625 and we offered 530. They countered with 600. We countered again with 550. The realtor said the home owner is firm on 600. What do you guys suggest we do? We really love the house but convinced ourselves not to…
Community – I just made an offer on a house. The list price was 625 and we offered 530. They countered with 600. We countered again with 550. The realtor said the home owner is firm on 600. What do you guys suggest we do? We really love the house but convinced ourselves not to go above 550.
On a side note: can someone recommend a lawyer or home inspector? Its a 2 family brick house.
price is not everything- is there anything else that would make your offer more attractive? for example, that you can move/close on their schedule; that you will agree not to nickel and dime them about every little thing once the inspection is done so that they feel that the 550K is firm, etc.
recall you saying you got yourself into a pretty sweet situation on your current pad. that said, dont rush or change the offer if you dont feel strong need to go above your 550k cap.
If you you find another house you’d like as much as this one for $550, or if you can’t afford more than that, then don’t go higher. If you’re putting down 20% and borrowing at 5%, it’s another 10k down and another couple hundred bucks a month. If you buy for 600k and sell in a 2 years for less than 600k, you might regret it, but if you’re there for 5 to 10 years you’ll likely have a decent gain, and paying 50k more won’t seem like a huge deal.
Though the seller didn’t counter your last offer, you could always raise your offer to something like 580k and move on if they don’t accept it.
And always take what the realtor says with a grain of salt. They’re not on your side – just trying to get a deal done at the highest possible price.
regarding the psychology of the seller, if this is a recent listing, they may be reluctant to go lower so early in the game. That said, most rational sellers in normal, rational markets usually price to accept 10% off of their asking price. $600k is only 4% off of the $625k ask and your $550k offer is within the 10% range.
it’s a very good Q as to why $550k is your top price.
if you don’t have more money than that, then don’t pay more, no matter what you feel. Houses cost money to own and there is always another house. Sometimes you have to compromise but being broke because you paid more than you can afford to for a house is not worth it in my view.
Then again your offer does sound like maybe a low ball, assuming the house was priced somewhat fairly. $50k off a $650k house sounds reasonable for the seller. If you can afford $600k, and the house is worth it, pay it and move on.
All sound advice. The most important issue is what can you afford. Do not stretch yourself thin here especially if there may be a likelihood that the furnace or the roof goes on this house. Yes comps are an issue regarding a mortgage. Make sure you put a mortgage contingency in the contract if you are not doing an all cash deal.
My lawyer is excellent…
David Fainkich
718-840-5860
I think Crown and Brokelin are giving sound advice, especialy the part about sentiment. Buying a house is a very emotional process, and even though we say we won’t, most of us end up getting sucked into the whole process of imagining what life is going to be like in our new home. Where we’re going to put the couch, what color of curtains, grandma’s table would fit perfectly here, will the trampoline fit into the bedroom, and the next thing you know, you’re emotionally attached. That’s where bad decisions come into play.
Why did you set the original price of 550 and were you being realistic? If you really think that the house is only worth that, or you know you absolutely can’t swing more,then your answer should be obvious. If on the other hand, you were just looking for a bargain, 600 is pretty cheap for housing in most of NY, especially a brick two family (New York is obviously insanely high compared to most of the country, but it is what it is) and you might end up kicking yourself over the one that got away.
You don’t need either yet…you haven’t an accepted offer.
It all depends on why you don’t want to go over 550.
If you are one of those people who just makes lowball offers because you think you should get a big discount off whatever the ask is, you may never get lucky.
Ir you think that is all it is worth given the comps, you have to decide whether to come up more. If you are getting a mortgage, the bank’s appraisal may not go as high as you are willing to. In which case, they may then come down more, or maybe not. If they do, good. If they don’t, and you have a contingency in the contract for that, you can then decide to walk, or come up with more cash, if you can.
If you can only afford 550 for any house, then you need to figure out whether you can stretch, and if it is worth it to you.
Hmm, I scratched my head when asked “What do you guys suggest we do?”
What do YOU want to do?
Do YOU like the house? What do YOU think the house is really worth – both in terms of comps (incl. possible upgrades) and YOUR own sentiment? WHICH IS VERY IMPORTANT.
Once you have decided: You can either, accept their price or put in another counter-offer and be prepared to walk away.