I saw a home that I liked quite a bit at an open house on Friday. The list price was X. Yesterday night, I made a bid of X - $6000, typical for home negotiations; my target price was X - $4,000, so I expected that there would be the usual counter-offers that would eventually reach that point.
No such luck. The owner countered with X + $11000. WTF? The owner went UP from their list price. The house has been on the market for about 40 days, and my offer is the first; there are no other offers pending.
The negotiation strategy on the part of the owner put a bad taste in my mouth, so my real estate agent and I withdrew the offer; I’m looking at another house now. I’m wondering, though, with no other bids, in a housing market that isn’t hot, why would a home owner make a counteroffer with a price that is HIGHER than the original list price?
My brother and I are selling my recently deceased mother’s house. We have it listed for $65K. A neighbor offered $35K. I said to my brother, let’s counter with $75K, imagining the conversation to go along the lines of:
*Neighbor: Now you’re countering with $10K more than you listed?
Us: Yep.
Neighbor: That’s insulting.
Us: So’s offering $30K less than we listed.*
I knew it would be in bad taste, but the neighbors are assholes anyway. I never thought anyone would actually attempt to do it, though.
He would have been better off not responding to your offer. That would have been rude on his part, but not nearly as rude as countering with $11K more than he originally asked.
Just curious, is the seller using a realtor? Did he pick the price out of thin air? Do you know if the asking price is fair or are you just knocking it down $6K as a strategy?
When I bought the house I currently live in we offered %75 of the asking price. That may seem rude to people but I was not holding a gun to their heads. They counter offered and after a bit we got it for, about, %10 less than asking.
Go for broke, if it hurts their feelings if you bid “too low” fuck 'em, this is business, not a second grade art class.
I’m not sure what X is, but an offer of X - $6K looks like a very reasonable good faith offer (unless X is less than about $40K). A counter offer above X is crazy, unless the seller has more than one potential buyer actively bidding for the property. If you seriously want to buy, I’d suggest replicating the owner’s technique: offer something like X - $10K. If the owner really wants to sell, he’ll get serious, and make a sensible counter-offer; if he doesn’t, you can walk away.
The house - decent, but not thrilling. Rough around the edges, and needed some carpet replaced - the appliances the owner was leaving behind would need to be replaced anyway.
Asking price - $120,000.
Next-door neighbor bought her house - identical layout to this one - 2 years previously for $85,000. Assessor’s office said the house was assessed at $89,000.
Allright, I think, I’ll start at $85K, but I’ll go as high as 95 or 100K. Obviously, they’ve inflated the price of the house so they have room to negotiate.
Their response to my first offer : ‘No.’ Not a counter-offer, or anything. Just no.
So I decide I should lead the way, show them that I’m willing to negotiate - I move up to $87,500.
They come back with ‘No. We have an appraisal that says it’s worth at least $20,000 more than that.’
Not really a counter-offer - but I sent back a list of my reasons for pricing the house as I did. Their answer : ‘We don’t care about those things.’
Pfft. I got my contract deposit fee back and said ‘Screw’em.’ The housing market up here moves very fast, and their place is still on the market several weeks later, I’m to understand.
X-$6k is extremely reasonable. Maybe get talked up to X-$3k, and everyone’s happy. If someone offers us $59k, they have themselves a house AFAWC. We won’t even dicker around.
My ideal price for a house is about X-$10K, and I feel comfortable going to about X-$4K; more than that, and my mortgage payments would be higher than a limit I set for myself personally. (Sure, I’m pre-qualified for X+$40K, but I don’t want to be house poor.) The house listed for X. I offered X-$6K. They countered with X+$11K.
The property is in an older East Side suburb of Cleveland, where prices for single family houses generally range from $130K to $180K. We’re not talking about a $50K home in a depressed rural area, nor $500K houses in a place were the housing bubble has expanded to laughable proportions.
I’ve owned two houses in the past. My strategy for sales price was to set a personal ideal selling price, and list for 5% above it, knowing that most sellers expect to pay about 5% under list.
I didn’t want to post too much financial info, but since everybody else in the thread is throwing around hard numbers, I’ll admit that X is $158K. I offered $152K, expecting to buy for $154K or $155K. The owner counter-offered with $169K.
Not all people selling their homes need to sell them. Some are in a position to list their homes asking for X. If they can’t get X then they don’t sell and stay where they are. Some might feel the market is hot and someone out there will pay an overinflated value for the house.
Sellers aren’t obligated to lower their asking price. The do it out of necessity because they have to sell quickly (bought another house, moving out of the area, can’t afford the house).
You never know about FSBO. The woman at the end of my block had her house for sale for 20 years. If anyone excepted her ridiculous price she would move, otherwise she was willing to stay with the sign on her yard. In your case it seems weird because according to you their price is pretty close to being reasonable. You are best to just say “screw you guys I’m going home” and find another house.
LOL…I would agree. I am a Title Closer (Escrow Officer) by trade, and have closed many transactions. Some go smoothly…some get ugly.
If the seller is being that much of an A-hole before you even have a contract, imagine how much fun things will get when you have to negotiate for repairs, terms of the contract, etc.
I’d have to want that house pretty damn bad to put myself through that
Guys. There is no ‘reasonable’ or ‘unreasonable’ approach to negotiations.
The buyer has a goal.
The seller has a goal.
Neither side knows what the other’s goal is.
So neither can actively judge the other’s ‘reasonableness’.
Go into it knowing what you are willing to pay as a maximum. Don’t convince yourself that you MUST have this product (the house, in this case). If you can’t get it then just walk away. There will be another one along shortly.
About the only justification I can think of for their strategy is if other comparable homes have been selling for > listing price, and they realized they screwed up. What are the comps? Your offer was really close to the listing price, better than they could expect.
My guess is that the seller is going FSBO because they want every penny and more out of it. I agree you should walk, since they’re likely to be pains. I’m betting that you’ll see it listed with a realtor in a few months.
That would be my guess - the seller is a jerk who thought your offer was insulting and came back with a higher price just to be an a-hole. It’s a good thing you found out now, rather than later. The people we sold our house to 4 years ago weren’t too bad in regards to negotiating a price with us, but once we accepted the offer they tried to nickel and dime us to death with all kinds of other trivial things. I came this close >>|<< to telling them to stuff it.
People will do strange things … when we bought our current house there was another on the block that was for sale. Now, four years later the bank owns it because the former owner refused to lower the sale price and it frankly isn’t worth what he wanted for it, even now. He then lost his job and couldn’t keep up the mortgage payments. So instead of taking, say, $10,000 less from an interested buyer, he lost the whole thing.
Couldn’t be any worse than what happened a few weeks ago when my parents were negotiating an offer with a young couple on their house. Their asking price is $580,000 for three acres of beautifully landscaped forest in an affluent community, on the side of a creek with a dock, swimming pool, and private drive. The house is not too shabby, and all in all, it’s the general consensus of everyone involved with the sale that they could get more than the listed price.
The interested couple made a starting offer of $240k. :rolleyes:
