What would you do -- House Offer -- UPDATED -- Accepted.

[LisaKinVA]

So we got an offer on our house.  One we can't accept.  We can counter, but I doubt they will like it.

 

They've asked us to delay closing for 3 months (cough).  So, there are carrying costs there.

Then, they've asked us to further reduce the price of the house by $10k, and pay closing costs, and a bunch of little (reasonable) things I wouldn't hesitate to agree to.

 

Roughly, $30,000 in concessions.  Which will (after everything) bring us to break-even on the house (by break-even, I mean meet concessions, pay off the mortgage, and pay the 6% Realtor fees).  We would walk away with nothing.  We also have a potential renter in the wings.  But, since we have an offer on the table, we need to respond with more than H to the L no.

 

Option #1:

 

Counter at $465,000 (covering our carrying costs for holding the house), and not pay closing costs, but agree to the little things. Contingent on pre-approved loan package.

 

Option #2

 

Counter at $479,000, and agree to pay their closing costs, cover our carrying costs and agree to the little things.  Contingent on pre-approved loan package.

 

Since I don't know the status of their actual pre-approval package for the loan (there are no contingencies on the offer other than an inspection), I don't know if that puts us out of their price range or not.  

 

What do you think?  (Oh, we also have a potential new tenant at $2300/month)

Edited August 1, 2016 by LisaK in VA is in IT

[JustEm]

I don't think I'd even counter. For me, it would be the holding it for 3 months that just wouldn't be an option for me. Anything could happen in those 3 months causing them to back out and you'd be back at square one. I might counter if it's been on the market for a long time and I didn't have any potential tenant.

 

But if you feel countering is a better idea I'd go for option 2.

[Carol in Cal.]

No way would I agree to the three months.

That's three months of being off the market, putting you right at the beginning of the holiday season, the very worst time to sell.  So if they walk then, it will set you back at least 2-3 months longer.  

[MooCow]

I'd walk away. Too much can go wrong.

[prairiewindmomma]

1. Do you really only have $54K in equity in the home going into things? Meeting concessions only means making concessions if the house is truly valued at what your asking price is. I assume that you had already realized that you were going to be paying the 6% in realty fees and paying off the mortgage.  We had a rough time last summer where our only offer on the house started off $25K below asking price.  We ended up selling $15K below initial asking price just because the season for selling was coming to an end, we didn't want to rent, and carrying our mortgage + rent from our new location would be at least $15K.  So, I realize that just walking away with no equity would be extremely painful, but if you only have x amount of equity to begin with....I'd look very carefully at your comparables as you make decisions about what to do.

 

2. I'd probably go with #1 because my realty fees would be comparably lower.

 

I'm glad you have a potential renter in the wings.  

 

When you look at statistical data from your realtor, is there a clear selling season in your area? In our previous area, the highest prices came in early March when new professors were coming to the university.  The highest volume came in late April. If you hadn't sold by July 1st, you pretty much knew it wouldn't sell until the following year.  

 

If you have that kind of clear data, I'd tailor your new lease to give yourself the best opportunity to sell next year.

[TranquilMind]

So we got an offer on our house.  One we can't accept.  We can counter, but I doubt they will like it.

 

They've asked us to delay closing for 3 months (cough).  So, there are carrying costs there.

Then, they've asked us to further reduce the price of the house by $10k, and pay closing costs, and a bunch of little (reasonable) things I wouldn't hesitate to agree to.

 

Roughly, $30,000 in concessions.  Which will (after everything) bring us to break-even on the house (by break-even, I mean meet concessions, pay off the mortgage, and pay the 6% Realtor fees).  We would walk away with nothing.  We also have a potential renter in the wings.  But, since we have an offer on the table, we need to respond with more than H to the L no.

 

Option #1:

 

Counter at $465,000 (covering our carrying costs for holding the house), and not pay closing costs, but agree to the little things. Contingent on pre-approved loan package.

 

Option #2

 

Counter at $479,000, and agree to pay their closing costs, cover our carrying costs and agree to the little things.  Contingent on pre-approved loan package.

 

Since I don't know the status of their actual pre-approval package for the loan (there are no contingencies on the offer other than an inspection), I don't know if that puts us out of their price range or not.  

 

What do you think?  (Oh, we also have a potential new tenant at $2300/month)

WHY do they need to delay closing for 3 months and need you to pay closing costs?  Sounds like they are stretching financially to me, so I would counter firmly and just plan to move on.   I would offer the little things you already think are fine on the counter and that's it.   You need to be looking at this pre-approval letter and checking it and them out.  

 

You don't want to rent if you will be long distance.  Rentals are management intensive. 

Edited July 29, 2016 by TranquilMind

[gingersmom]

I had a 3 month closing. The buyer gave a very large non-refundable deposit. I would do everything possible to make the offer work and sell.

[LisaKinVA]

We've been renting for the past 2 1/2 years, we have a minimum of 2-4 years left here.  

 

It's "high PCS season now"  -- there's a bump in both rental and sales activity due to military moves (as we are commuting distance to The Pentagon, Quantico, Dalghren, etc.  The potential for a 2-3 year lease is big.  The person making the offer is not military.  They do have a house they have to sell, they are trying to change school districts for high school (we have one of the best high schools in the county, and in the state).  We are already priced at the lower end of the comps.  We are not going lower.  

 

At this point, we are pretty much in the "keep renting it out" frame of mind.  

 

 

[Guest]

Counter with the higher offer or not at all.

[prairiewindmomma]

Then I'd absolutely turn those offers down. Best of luck in getting a long-term lease from a good tenant (or a decent purchase offer!)

[Happy]

​If you counter with the higher end, will your house appraise for that value? THAT could be a big deal.

 

A three month close would be tough to handle. I'd see if they could close in 30-45 days. That way YOU can move on.

 

Or just say no and see if they clean up their offer. They are asking for the moon and the stars from the sound of it.

[StephanieZ]

Well, the best case would typically be a 45 day closing, so that means they are "only" asking an extra 45 days, right?

 

I'd counter, covering their closing costs, with the higher earnest money. 

 

And, I'd make sure that all inspection windows, etc, are SHORT (say 10 business days) so their "outs" go away quickly. 

 

If you've had it on the market for a while, then you are aware that other buyers aren't busting down the door to make offers.

 

Selling season is coming to a close. 

 

Renting is NOT risk free. This house is a huge investment, and you could lose much of it if you end up with non-paying or damage-causing renters . . . I would only rent a home out that wasn't a big part of my net worth, except in extreme circumstances in which that's the only option you have.  

 

We once had to rent out our primary residence for a year before selling it, because we had to move (only option) and our home was slated for highway construction/eminent domain taking which made it un-saleable. A year later, the highway department had shelved their plans and we were able to sell. The day we closed on that house was the biggest relief I've EVER felt. Carrying it was so stressful. We are now landlords on other properties, but only ones that we can "afford to lose" and carrying those mortgages is painless for us if there is a vacancy, etc. I'd never want to have a rental in which I was truly dependent on the rental income to cover my costs. One year was enough; never again!!

 

So, in essence, I'd make the best of the deal and I'd try to make it work. Unless you can stay in the house and aren't already committed to a move. In that case, fine, wait.

 

 

[LisaKinVA]

Then I'd absolutely turn those offers down. Best of luck in getting a long-term lease from a good tenant (or a decent purchase offer!)

 

Thanks... our management company has gotten us two tenants who didn't absolutely destroy the house ;)  Hopefully, they can get us one more!  It would be nice not to have to worry about the house -- but I don't need to just walk away from it, either.  Besides there is a small chance (now) that we could go back to the area.  <3 my house!

[Seasider]

​If you counter with the higher end, will your house appraise for that value? THAT could be a big deal.

 

A three month close would be tough to handle. I'd see if they could close in 30-45 days. That way YOU can move on.

 

Or just say no and see if they clean up their offer. They are asking for the moon and the stars from the sound of it.

Agreed. Three months to close would be a deal breaker for me. Also, keep closing costs separate. Not only may the higher price not pass an appraisal, it will increase what you pay to the re agents in commission.

 

I would not counter. But perhaps in a friendly way let the news pass through your agent that you would be willing to take a look at a different, more reasonable offer. Let them do the weighing out and gap closing, then tweak as necessary.

[Seasider]

Renting is NOT risk free. This house is a huge investment, and you could lose much of it if you end up with non-paying or damage-causing renters . . . .

OT, which poster was it that had an awful rental mess going on, because her dh gave out the keys before collecting any money? Was there ever an update to that story?

[Pawz4me]

When we bought our house (closed on St. Patty's Day) lenders were all saying allow sixty days for closing at that time. And that was before the real buying season kicked in. Thirteen days later we accepted an offer on our current house and the closing on that didn't occur until June 10th (over two months). The buyers were organized, it just took that long to get all the paper work done. So asking for a closing three months out doesn't seem outrageous to me at all. It's not likely it would get done a whole lot quicker than that anyway. I'd counter with #2 and see what happens. 

[LisaKinVA]

Based on comps in the area, our house would easily comp for about $60k more than we are asking.  We priced aggressively to try to move the house quickly (which didn't happen -- nothing was selling in our area...seriously, 5 houses in the entire county sold in 3 months, and all of them were in the northern part of the county).  

[Happy]

Based on comps in the area, our house would easily comp for about $60k more than we are asking.  We priced aggressively to try to move the house quickly (which didn't happen -- nothing was selling in our area...seriously, 5 houses in the entire county sold in 3 months, and all of them were in the northern part of the county).  

Based on that activity, I'd work on a counter that works for you and them.

 

GOOD luck with it!

[lynn]

I would not counter. We had a weird offer on our house. We just did not bother with them.

[JFSinIL]

Counter with the high offer, make sure their Realtor knows you can continue to rent and do not have to sell right this minute (you are not desperate). Either they are able to offer more money or not. Sounds like they may be trying to take advantage of you a bit if they know you live abroad and may need to sell a house..

[QueenCat]

I'd counter and require a nonrefundable deposit if they want to close more than 45-60 days out.

[Paige]

What does your realtor suggest? Are you in an area where it's typical for sellers to pay most of closing? It really varies. We've done both depending on where we were. Since houses aren't moving quickly in your area, I wouldn't just ignore them. I'd offer whatever closing cost share is typical for your area, close in 3 months, and no lowering of your price, or, if you're paying closing costs out of your cash out, I might even raise the cost to offset your losses for the 3 months. 

 

They may not be able to budge on the 3 month closing if they are coming for a job transfer. 

[Pawz4me]

FYI -- When we sold our previous house the buyers made what we thought was a low ball offer and asked us to pay closing costs. Overall it was a rather outrageously low offer. On our realtor's advice we countered with full asking price but agreed to pay their closing costs. They accepted within a couple of hours of getting our counter offer. You just never know what a buyer has in mind or can really do, and I don't think I'd ever just say "no" to an offer w/o making a counter. What's to lose by throwing something out and seeing what they say?

[slackermom]

Well, I think it is a good thing that they are not putting either a sale or mortgage contingency in the offer. They are presumably asking for 3 months so they can do a purchase without multiple strings attached.

 

I would want a deposit that would cover your carrying costs, plus maybe a bit more, that they would give up if they pull out of the deal for anything other than inspections. 

 

We have been involved in lots of real estate transactions that took longer than normal. And more often than not, the other side asks for multiple extensions because the time frame in the offer was not sufficient, for various reasons. 

 

We once did a deal that had the buyers increase the price by a few thousand each time they extended. They were waiting on permits, etc. but time is money!

 

Also, check the language with your broker agreement to be sure you will not be stuck paying the realtor fee if the deal fails to close, and you end up renting the house instead. In some places, under certain circumstances, the realtor could be entitled to collect a fee even without a closing, if they got you a qualified offer during the listing period.

 

typo edited

Edited July 29, 2016 by slackermom

[madteaparty]

So we got an offer on our house. One we can't accept. We can counter, but I doubt they will like it.

 

They've asked us to delay closing for 3 months (cough). So, there are carrying costs there.

Then, they've asked us to further reduce the price of the house by $10k, and pay closing costs, and a bunch of little (reasonable) things I wouldn't hesitate to agree to.

 

Roughly, $30,000 in concessions. Which will (after everything) bring us to break-even on the house (by break-even, I mean meet concessions, pay off the mortgage, and pay the 6% Realtor fees). We would walk away with nothing. We also have a potential renter in the wings. But, since we have an offer on the table, we need to respond with more than H to the L no.

 

Option #1:

 

Counter at $465,000 (covering our carrying costs for holding the house), and not pay closing costs, but agree to the little things. Contingent on pre-approved loan package.

 

Option #2

 

Counter at $479,000, and agree to pay their closing costs, cover our carrying costs and agree to the little things. Contingent on pre-approved loan package.

 

Since I don't know the status of their actual pre-approval package for the loan (there are no contingencies on the offer other than an inspection), I don't know if that puts us out of their price range or not.

 

What do you think? (Oh, we also have a potential new tenant at $2300/month)

Unless I was desperate to sell, and ready to walk away with nothing, I would not even engage. That is a very expensive 3 month option they're tying you up with!

(I have a house for sale now and prepared to carry a while. even though I'm closing on my new house).

[LisaKinVA]

Our Realtor forwarded us the basics of the offer, because she wanted to give us time to talk/think about it.  We spoke with her and told her that we absolutely couldn't sell the house if we couldn't net at least $30k.  We asked her to have a "soft chat" with the other Realtor to explain that we didn't have to sell and wouldn't if we couldn't net enough off the price, that we had priced it aggressively to sell quickly, and have already dropped the price to the absolute lowest level we could without large concessions.  Other than the longer time to close, there really isn't anything about this offer I don't consider normal, or wouldn't have asked for myself.  The fact that we do have potential Renters in the wings.  We know that they do have a house they either need to rent or sell -- but apparently that is not needed for them to qualify for their loan (we haven't seen the prequal letter yet).  Closing assistance is more important to them than price.

 

AFTER we get more information on their loan, we'll go back with a high counter (adding the money to the house price to cover the additional closing costs, meeting the small requests they have, inspections, power washing -- which actually was done in June -- that kind of thing).

 

Our listing expires tomorrow.  Currently, we are already expected to pay 6% Realtor fees, which are split between both the listing and selling agent.  I believe the extra 3% are for other fees related to closing.  If we do not sell the house, we do not have to pay anything to the Realtor (true if the listing expires or not).  

[gardenmom5]

one risk of having a longer close time -is those entities that have to do the paperwork can end up putting it off until the end, adn then "oh, we need more information" (most of it was information that already had).  that's what happened to dd. (30 day close). ONE entity (?title company?) sat on their patootie and she had to get two extensions to accommodate them.  her real estate agent and mortgage broker both repeatedly phoned that entity, trying to light a fire under them - they just sat.  they didn't care, as  far as they were concerned, they had time and waited until the last minute.  

everyone else was done with paperwork a full week early.

 

so, no way would I agree to a 90 day closing. 

Edited July 30, 2016 by gardenmom5

[DawnM]

How long has it been on the market?  If it isn't moving, this may be the best offer you will get.

 

I personally would rather sell than rent, but you may be different.

I would also not want it on the market another 6 months, potentially losing more while you pay mortgage and then still get a lower offer than you want.

 

But the one thing I would NOT agree to is the 3 month closing.  45 days max, preferably 30.

[LisaKinVA]

How long has it been on the market?  If it isn't moving, this may be the best offer you will get.

 

I personally would rather sell than rent, but you may be different.

I would also not want it on the market another 6 months, potentially losing more while you pay mortgage and then still get a lower offer than you want.

 

But the one thing I would NOT agree to is the 3 month closing.  45 days max, preferably 30.

 

It's been on the market 4 months.  We decided to do the option for rent again 7 days ago.  We had a time-line involved with the decision to sell. There are lots of "little things" that I haven't included (such as if we wait to sell until we return, our closing costs are paid, because we move to Norfolk). We won't know for 2 years if we are coming back in 2018 or in 2020 or beyond.

 

We are better off selling IF we can get a good price -- good enough that we could essentially pay off our debt, and begin to set aside money to save for our return.  If we can't pay off debt, we are better off waiting, until we can get the closing assistance as part of our move, or allowing the market to improve (hopefully).  

[LisaKinVA]

Well, it's been a weekend.  Our "high counter" which included the payment of their closing costs (essentially enabling them to roll their closing costs into their loan, but not increasing our margin) was accepted.  The contract has been ratified.  Inspection is Tuesday, with a closing date on or before 9/14.

 

I can't help but be a bit sad, relieved, and even nervous.  I'm sad to sell the home we put so much of ourselves into building.  I'm relieved to not have to worry about the house for the next 2-6 years we are here, and that the people who are buying it love the colors and features we put into the house.  I'm nervous about these next 45 days -- and just making it to the table -- as well as a bit concerned about what this means for our situation when we move back stateside.

 

On the positive front, selling the house has given us a huge leap forward as we try to get out of debt.  If this was a 4-lap mile race, we've moved 3/4 of the way around the track.  We have a huge medical bill that is due in 60 days (Navy Hospital is changing how they are doing things and we either pay in full, or get slapped with a 30% administrative fee).  The credit cards will mostly be wiped out -- and what is left is manageable, leaving us some room to pay for school, swimming, travel, and some to save.  We'll be more comfortable -- but as anyone who has lived paycheck to paycheck for an extended period of time understands, we will still have a long way to go.  Some other things may be happening in the next 6 months which will push us further along (a potential job change, which will keep us here a bit longer as well as increase dh's pay to what it would have been had we remained stateside -- technically not a raise, but it would feel like one!) 

 

So, all in all, done with the house stress and moving forward to the next chapter...whatever that may be.

[Happy]

Yay!!!  Here's a to a smooth inspection period. To many of my clients, that's the roughest part of the whole deal. It's similar to airplane turbulence....keep your seat belt buckled and keep moving toward the goal.

 

I hope all this frees you up to travel as much as possible while you are in Italy!

Edited August 1, 2016 by Happy

[mommyoffive]

Congrats!  I hope everything goes smoothly.

 

Keep kicking butt on paying off debt!   

[BooksandBoys]

Well, it's been a weekend. Our "high counter" which included the payment of their closing costs (essentially enabling them to roll their closing costs into their loan, but not increasing our margin) was accepted. The contract has been ratified. Inspection is Tuesday, with a closing date on or before 9/14.

 

I can't help but be a bit sad, relieved, and even nervous. I'm sad to sell the home we put so much of ourselves into building. I'm relieved to not have to worry about the house for the next 2-6 years we are here, and that the people who are buying it love the colors and features we put into the house. I'm nervous about these next 45 days -- and just making it to the table -- as well as a bit concerned about what this means for our situation when we move back stateside.

 

On the positive front, selling the house has given us a huge leap forward as we try to get out of debt. If this was a 4-lap mile race, we've moved 3/4 of the way around the track. We have a huge medical bill that is due in 60 days (Navy Hospital is changing how they are doing things and we either pay in full, or get slapped with a 30% administrative fee). The credit cards will mostly be wiped out -- and what is left is manageable, leaving us some room to pay for school, swimming, travel, and some to save. We'll be more comfortable -- but as anyone who has lived paycheck to paycheck for an extended period of time understands, we will still have a long way to go. Some other things may be happening in the next 6 months which will push us further along (a potential job change, which will keep us here a bit longer as well as increase dh's pay to what it would have been had we remained stateside -- technically not a raise, but it would feel like one!)

 

So, all in all, done with the house stress and moving forward to the next chapter...whatever that may be.

That's spectacular!

[Guest]

I'm glad they decided to be reasonable and this is a step forward for you. I can imagine it is quite bittersweet but debt repayment is worth it, IMO. We are in a similar position in renting our current house out and buying a new one in the next few months and despite the drama it's worth it!

Edited August 1, 2016 by Arctic Mama

[LisaKinVA]

Now...if my husband could STOP delivering me more "news he told me"  Umm, I'm pretty sure I'd remember the health care bill and now an AUDIT!  (Yeah, I have a feeling he's done our taxes wrong for 2014 and 2015).  Hopefully, the damage won't be too bad -- but it's the IRS.   :glare: