I made an offer on a property where I want to move. This property had been on the market since last April. At the time it was $49,000 for half an acre (two lots) and two cabins. The seller told the person who offered to buy it that they were mistaken about the asking price and raised the price to $65,000. The buyer backed out. The current listing was posted last December. I’ve heard that people are moving away from the area and that there are a lot of motivated sellers. Also, many people in the area are loth to buy a house on an Indian Reservation. (Don’t ask me why. I don’t know.) So I thought my offer of $60,000 was reasonable – especially since the main cabin (the other is basically a shack) needs roof and roof-joist repairs (maybe $8,000). My offer was contingent on my seeing the property and a favourable inspection. (Incidentally, a friend of mine is a homeowner and he actually went out to the property to check it out. He said he wouldn’t go over $60,000. This was before he knew the condition of the roof. Also, the 2-BR house is barely bigger than my 1-BR apartment.)
I got word from the realtor today that the offer was declined. They counter-offered with the full price. He also said that they want to raise the price.
Even at full price, this place is probably about 1/3 to 1/8 what I would pay for a similar place down here. But it irks me that they would not haggle and that they want to raise the price. Call me paranoid, but I’ve heard about the anti-Californian attitudes of many people in the Pacific Northwest. I have a feeling the sellers said, “He’s from L.A.? He must be rich. Let’s raise the price.”
Needless to say, I told the realtor I’m not interested at that price and to let the deal die.
My realtor said that if the property is still on the market at the end of the month (when I go up there), we could try my offer again. But I feel like dropping my offer to $58,000 (if I don’t find something – even at a higher price – that I like better).
Would it be a breach of etiquette for me to do that? Or is it okay to offer whatever I feel like offering? I don’t think it’s very nice that the seller wants to raise the price again, so why shouldn’t I lower my offer? Is “hardball” okay when buying real estate?
It sounds to me as if the owners don’t really want to sell the property, since they are following the same pattern with you as they did with the previous potential buyer. I’m not sure you should take it personally. I think it’s perfectly okay to offer whatever you feel like offering, especially if you don’t feel the property is worth the asking price. If they don’t like your offer, they can say “no.”
Ah, real estate bargaining! It may sound harsh, but when coming to an agreement on a price, you really can’t think in terms of etiquette. It is equally dangerous to offer vindictively (as in, well, if he or she is enough of a jerk to raise the price, then I’m going to shoot them a lowball offer, in spite). It may feel good, but it won’t get you the half acre and two cabins.
There is some value that the property is worth to you. You can offer less than that, leaving room to negotiate, or exactly that and leave it. The ball you should keep your eye on is that number. Forget about what the seller says and don’t worry about etiquette or playing hardball. If the seller is reasonable and the offer is good, it will be accepted. If the seller is a greedy so and so, it won’t be and you won’t get it without paying more than it’s worth. Good luck!
This whole thing sounds iffy to me. From what (VERY) little I know about home selling, the buyer sets a price, and then considers offers - period. They’re certainly free to reject any offer for any reason, but I don’t think they can counter you higher than their asking price. You mention that you are working with a real estate agent - are the sellers? If so, they may be contractually obligated to their asking price.
However, if they’re selling on their own, perhaps they’re just testing the market. Their last offer was $11, 000 less than yours - wonder how high they can set that asking price and still get bids in the ballpark, you know what I mean?
Unless you are looking for the buyer to do something like carry back financing or fix something post sale (or whatever) just offer what you think the property is worth. Some sellers will haggle and some won’t. There is no book of rules for RE price negotiation. Offer what it’s worth to you as an intelligent consumer. Full price offers are very common if a property is a deal or there is competition for the property.
The main danger is that if you offer a real lowball price relative to the asking price the seller may be insulted and want nothing to do with you even if you raise the price.
I’d offer the 58K, and if they counter-offer, then go back at them with the original 60K. If they don’t accept, fine, move on, unless you’re willing to go higher. Etiquette? This is a business deal, so playing hardball is part of the etiquette.
As for the other cabin, I would tear it down and put up a “pole building” as a garage/studio. If I make it 30’ x 50’ there’s room for the cars, an office, and (with the cars temporarily outside) a studio. If I make it two storeys, then I can have high ceilings for my lights. I could have a small office and a WC at one end, and a studio apartment on top. Once that is done, I could live in the apartment while I tore down the better building to put up a larger house. So basically I’m looking at the serviced lots. You can see why I don’t want to spend too much.
No, my agent is not their agent. They countered with the asking price, so I don’t think there’s any contract being broken.
Since they’ve been trying to sell it for a year, I suspect there isn’t all that much competition from buyers. If I don’t get this place, there are others.
The story I heard was that an ex-wife wants to sell the property which she got in the divorce. After getting the first offer, her father told her that she would still owe him $10,000 and “Where are you going to get it?” (I don’t know what that debt is for.) Now, after having been re-listed for a couple of months, the father is advising his daughter to raise the price. I don’t know if they’re “testing the waters”, but I think an easier way would be to look at the multitude of other houses for sale in the area.
FWIW, I can’t think of a situation where a seller would ever want to have a contract to sell at a certain price and no higher. The best thing that can happen to a vendor is a bidding war, and they can even get way more than the original asking price. It usually only happens in a hot market, but it can happen anytime.
It happened to friends of ours who had a dilapidated farmhouse, with an equally ramshackle barn on the 2 acre property. Both buyers wanted it for what were essentially emotional reasons, and they got 30 grand more than the asking price.
Once an offer is accepted, the seller is obligated to sell it for that price. My friend made an offer on his house and the seller accepted. After the contract was signed, they got a higher offer; but by then it was too late, and they had to accept my friend’s offer.
Yes, and the buyer is likewise obligated to buy the house at that price.
I guess I misunderstood the above. I thought LifeonWry was saying that the vendor could not raise the price before the purchase and sale agreement was executed.
No, what I meant was, if they ask $60K, and you offer $50K, they can’t turn around and say “How 'bout $70K?” I do know that if you say $50K, and another potential buyer says $60K, then you come back with $65K, the other bidder can indeed go OVER the seller’s asking price, but I think there are even rules for that. As I said, I know very little about this, but it seems to me there was some talk about “first bid rights” or somesuch.
Anyhow, listen to astro over me when it comes to this topic. I’m full of “I think”, but astro probably KNOWS.
MD real estate law may be different than CA’s, but normally listing a property in MD to sell at a specific price does not obligate the seller to accept that price even if a buyer offering full price is delivered. The seller can (and some do) change their minds about the price, terms etc. of a deal even if a full price offer is received, and more than one deal has tanked because of this. Depending on how the listing is written there may be a commission due from the seller if the agent delivers a “ready, willing and able” buyer willing to pay full price but this is rarely enforced for a variety of practical reasons.
Until a written contract has been ratified the seller is under few restrictions as to the price he can demand regardless of what he may have listed it for .