38carrots Posted January 31, 2017 Share Posted January 31, 2017 Have you done this? What percentage? Was it what your realtor recommended? How can you trust your realtor? The property that we like has been for sale for 6 years. For the first 4 years with a massive amount of land, and the price reduced every 6 months or so. For the last 2 years the land size was reduced as well, and the price went down again, most recently 8 months ago. The price went down by $60,000 in those two years. In the last two years, according to the records, it seems that there was only 1 offer and it didn't go through (not sure of the reason yet, but implied that it was the buyer's financing). There was also one offer that didn't go through in the previous 4 years. We were told by well meaning friends to offer 20% below the asking price (which would be $50,000 below). Our realtor says that because our offer will be conditional on us selling our house first, we should start at 10% below the asking price. He feels that $50,000 below is insulting for our area. It does sound really bad to offer $50K less than they are asking, considering that only recently they were asking much more. The house is not maintained well and is probably quite unattractive to most people who like spotless and pretty. They still live there. It is messy, dirty (country-dirty) and not fully finished. I know she wants to sell it, and I heard she would sell for $30,000 below the asking price. But on the other hand she doens't have to sell it now--it is her family land and the house was built by her parents, and I'm pretty sure it is all paid off. She does have a place to go. She looked tired of selling, but friendly (we had to talk to her about the rest of the property and she took us for a nice walk.) WWYD? 1 Quote Link to comment Share on other sites More sharing options...
gingersmom Posted January 31, 2017 Share Posted January 31, 2017 I would sell your house first, then make an offer. 7 Quote Link to comment Share on other sites More sharing options...
chiguirre Posted January 31, 2017 Share Posted January 31, 2017 We made 3 offers, each 10% under asking price on 3 acceptable houses. One person got offended and didn't answer. One counteroffered. One accepted. The house we bought was empty for more than a year because the previous owners were transferred so they started well above market imho, then they lowered the price every few months, then they sold to the relocation company, then the relocation company beiged the house (new neutral carpets and paint), then they lowered the price again. You get the idea. It became "that" house, so we got it cheap. We were afraid it might have issues, but it came with a home warranty that we didn't need to use and it's served us well for 13 years. Our real estate agent wasn't from the town we bought in so he didn't care about making lowball offers. He wasn't going to burn any bridges since he almost never works in our town. It can't hurt to make the offer and see what the owner says. I doubt she'll be offended after 4 years on the market. 3 Quote Link to comment Share on other sites More sharing options...
Melissa B Posted January 31, 2017 Share Posted January 31, 2017 Fire my realtor. It sounds like he is more concerned about his commission percentage. It's his job to represent you, including justifying the lower offer to the seller. It doesn't sound that difficult to do in this case. The price hasn't been dropped in eight months and they aren't getting offers. Reason enough to start with a low offer. They can always counter higher. 15 Quote Link to comment Share on other sites More sharing options...
Lanny Posted January 31, 2017 Share Posted January 31, 2017 The Seller is not motivated. I would not hesitate to offer 20% less than the asking price for that property. Although the price has been reduced, so has the amount of land. You must compare Apples to Apples, and with less land, there is much less value in the property. If you do buy this property, should you want/need to sell it, you might have an incredibly difficult time doing that. Are you paying "Your Realtor"? If you do not have a "Buyers Agent", that you are paying, who is working on YOUR behalf, "your" Realtor is really working for the Seller. I might consider offering 20% less than the current asking price. I would get my financing approved, BEFORE making an offer, so that I could submit that I was pre approved for a loan, when submitting the offer. I would not make an offer that is contingent on me selling my house. Who knows how long that might take. 4 Quote Link to comment Share on other sites More sharing options...
Storygirl Posted January 31, 2017 Share Posted January 31, 2017 I don't think that going by a percentage of the asking price is the answer. Somehow you have to try to figure out what the real value of the property is. Hopefully your realtor can provide some comps for the area. Look at other houses that have sold that are similar condition and see what the price was per square foot. It is possible to offend the seller with a low offer. We did that once. We based our offer on the market in the neighborhood; they believed the market had changed and the house was worth more. We didn't buy it. They sold it at a price higher than we wanted to pay. One of the things that we really try to consider is how much we would be able to sell it for when it came time for us to sell it. You do not want overpay because you are excited to have this house, only to discover in a few years that you can't sell it to anyone else without taking a loss. So I agree with selling your home first. Find out the comps. Make any offer contingent upon both an inspection and an appraisal. 8 Quote Link to comment Share on other sites More sharing options...
Carol in Cal. Posted January 31, 2017 Share Posted January 31, 2017 It sounds like the market in your area is not moving too fast. If you sell your house, you might end up without a home. But if you don't, you're a less attractive buyer. My inclination would be to put your home on the market and then put a low offer on the other place. I would base the low offer on comparables in the area, and if I wanted some of the land that used to be part of the deal I would add that back in. Then that becomes a negotiating point that you can give up. Base your own list price on comparables in the area, too, maybe 10% high. You don't want it to look unreasonable but you don't want it to move too fast either. And if you get an offer, insist on a long escrow so you won't be caught between two houses. 3 Quote Link to comment Share on other sites More sharing options...
BigMamaBird Posted January 31, 2017 Share Posted January 31, 2017 We looked at a house that was listed at $160k. Our realtor advised us to offer $130k. The seller countered at $140k and we agreed. The house was solid but needed a lot of interior cosmetic work. It hadn't been updated since the early 80's. It was 2011 at the time and our area was still unstable from the housing crash. The seller had rejected an offer that was $15k more only a month before we made ours. I think he realized the market was very sluggish and he needed to take what he could get and go. If your realtor thinks your market can handle a low offer, go for it. The worst the seller can do is reject your offer. 3 Quote Link to comment Share on other sites More sharing options...
Carol in Cal. Posted January 31, 2017 Share Posted January 31, 2017 The other thing to consider is whether you can just as well get another place. The last time we bought a home, we were in no hurry, it was a slow market that had fallen not that long before, and some sellers were kind of nostalgic for earlier prices (not that I blame them). We offered right around the VALUE of the places we put offers on, just a little less, regardless of the asking price. And we got turned down over and over. Time and time again I watched those same places stay on the market for 2-3 years longer, only to finally sell at right around the price we had offered, the one that had been so offensive. When we finally did buy, we got a good deal on a house that had been originally listed at a much higher price. Our appraisal came back 10% higher than what we ended up paying, and we got a place that we really like. It was worth it to wait. Otherwise we would have been stuck with a financial albatross around our necks. 3 Quote Link to comment Share on other sites More sharing options...
Seasider Posted January 31, 2017 Share Posted January 31, 2017 Fire my realtor. It sounds like he is more concerned about his commission percentage. It's his job to represent you, including justifying the lower offer to the seller. It doesn't sound that difficult to do in this case. The price hasn't been dropped in eight months and they aren't getting offers. Reason enough to start with a low offer. They can always counter higher. "Insults" really only hurt you when there are competing buyers. FWIW, in your shoes, not only would I easily offer 20% less on the first go- round, I'd also be sure that I could hire my own structural inspector and be sure there's the option of backing out of a contract if significant issues are present in the house (state laws vary). There's a reason it's been on the market for years. 7 Quote Link to comment Share on other sites More sharing options...
Scarlett Posted January 31, 2017 Share Posted January 31, 2017 "Insults" really only hurt you when there are competing buyers. FWIW, in your shoes, not only would I easily offer 20% less on the first go- round, I'd also be sure that I could hire my own structural inspector and be sure there's the option of backing out of a contract if significant issues are present in the house (state laws vary). There's a reason it's been on the market for years. Exactly. As long as it has been for sale and the poor condition it is in.... I would definitely offer what I wanted to offer and tell that realtor to take a leap. The seller doesn't have to accept any offer! But you don't want to offer more than will make you feel good about the purchase. Trust me 'fixers' can turn into looooong projects. 4 Quote Link to comment Share on other sites More sharing options...
Scarlett Posted January 31, 2017 Share Posted January 31, 2017 Our fixer/foreclosed upon/vacant for 2 years/vandalized home was listed for $69. We started bidding at $25 and got it for $41. So you never know what is possible. 5 Quote Link to comment Share on other sites More sharing options...
Annie G Posted January 31, 2017 Share Posted January 31, 2017 They are really complicating it by lowering the price and reducing the amount of land at the same time. The way they're doing it really makes it seem like they aren't lowering the price much, if at all. What do you expect the house/property will appraise for? I might have a quick appraisal done (around here we can buy a mini-appraisal for about $100 and they're usually pretty accurate. They just don't have all the documentation a full appraisal has.) If the appraisal is more in line with what you are willing to pay, go for it. Adding a contingency of your house selling is pretty routine here but there is always a limit like it has to be under contract in three months or the seller can end the contract with you. 4 Quote Link to comment Share on other sites More sharing options...
Supertechmom Posted January 31, 2017 Share Posted January 31, 2017 Tell the realtor to write up the paperwork as you want. The price went down because the land went down. Make a list of what needs to be done, you said parts were unfinished?, of major things that must be done.....electricity/Air/plumbing/roof etc and then cosmetic issues - holes, peeling paint,worn floors etc.......... Insulting offers are usually insulting to realtors' paycheck. Put in a clause contingent on sale and upon inspection. We usually offer what we think the value is on fixer uppers and then down grade 10% and start there. The realtor freaks and whines but does it. Sometimes, the seller sees that list and how it looks to a buyer and realizes the house isn't worth what he thought. other times, we begin to negotiate the price. Our first house we offered an insulting price and the buyer took it. when we sold, we made nearly 50,000 on that house after the renovation. 2 Quote Link to comment Share on other sites More sharing options...
Happy Posted January 31, 2017 Share Posted January 31, 2017 Offering low can really backfire....I've seen sellers become so offended that no matter how much talking and educating I did, they would no longer even consider offers from that buyer. The contingency for the sale of your house is a BIG one, especially if you have not even put your home on the market. Around here, it's best to make an offer on a new purchase after the current home is under contract--and preferably if you are through the inspection period. Sellers don't want to take their home off the market for something so iffy. When you clear up such a significant contingency, then you can offer less, imho. It might mean living in an RV or a residence inn type place for a few weeks, but it's worth the effort. Shrug...I'd probably help you make the low offer--you absolutely never know when the seller is desperate--but I'd warn you it might not be accepted. IMHO, there's something else going on with this property and it's sellers--I hope you are able to figure it out and structure a deal where everyone is satisfied. 3 Quote Link to comment Share on other sites More sharing options...
gardenmom5 Posted January 31, 2017 Share Posted January 31, 2017 what do the comparables for *your* area say? have you looked at those? similar landsize, similar home size and features etc. that have sold in the last six months or so. is your market going up or down? 4 Quote Link to comment Share on other sites More sharing options...
Scarlett Posted January 31, 2017 Share Posted January 31, 2017 Offering low can really backfire....I've seen sellers become so offended that no matter how much talking and educating I did, they would no longer even consider offers from that buyer. The contingency for the sale of your house is a BIG one, especially if you have not even put your home on the market. Around here, it's best to make an offer on a new purchase after the current home is under contract--and preferably if you are through the inspection period. Sellers don't want to take their home off the market for something so iffy. When you clear up such a significant contingency, then you can offer less, imho. It might mean living in an RV or a residence inn type place for a few weeks, but it's worth the effort. Shrug...I'd probably help you make the low offer--you absolutely never know when the seller is desperate--but I'd warn you it might not be accepted. IMHO, there's something else going on with this property and it's sellers--I hope you are able to figure it out and structure a deal where everyone is satisfied. My feeling about 'insulted' sellers who would not consider any future offers from that buyer is that they would probably be difficult to work with anyway, so oh well. Usually 'insulted' sellers are super proud of their place....this seller doesn't sound so much super proud as she just wants out. 3 Quote Link to comment Share on other sites More sharing options...
OneStepAtATime Posted January 31, 2017 Share Posted January 31, 2017 (edited) I have to agree that offering extremely low when you have the contingency of the sale of your house (which is not on the market yet and needs a lot of repairs IIRC) may not net you what you want. I, too, have seen people get very insulted and refuse to deal with someone because they felt they were not treating them or their property with respect. But even if they don't get insulted, you aren't actually ready to put your own house on the market yet, right? It still needs a lot to be ready? Am I confusing things? If so, I apologize. Honestly, I think things are sort of going a bit backwards here. Why not work really hard to get your house ready to sell first? I would not make an offer on the farm right now. It has been sitting for a while. I doubt it will sell out from under you. After you have decluttered and cleaned out and done any minor repairs (you said in your other thread you weren't intending to finish the major repairs right?) then see about offering on the Farm. That way if the offer is accepted you won't be in a total panic trying to get your house ready to go and you won't be forced to take seriously low ball offers for your home just to prevent the farm sale from falling through. If the offer isn't accepted, your house is still in better shape and you can reinvestigate what you really want to do. Edited January 31, 2017 by OneStepAtATime 4 Quote Link to comment Share on other sites More sharing options...
Happy Posted January 31, 2017 Share Posted January 31, 2017 My feeling about 'insulted' sellers who would not consider any future offers from that buyer is that they would probably be difficult to work with anyway, so oh well. Usually 'insulted' sellers are super proud of their place....this seller doesn't sound so much super proud as she just wants out. For sure they might be hard to work with...and being insulted is short sighted at best. I try to 'train' sellers to see any offer as progress--just counter back with what makes you happy, instead of being insulted. There are many buyers who can't seem to make an initial offer unless it's a lowball. Losing a few homes to other buyers usually cures that in my market. 5 Quote Link to comment Share on other sites More sharing options...
Carol in Cal. Posted January 31, 2017 Share Posted January 31, 2017 (edited) My feeling about 'insulted' sellers who would not consider any future offers from that buyer is that they would probably be difficult to work with anyway, so oh well. Usually 'insulted' sellers are super proud of their place....this seller doesn't sound so much super proud as she just wants out. Sometimes that is true, but the follow up question is how big an area or a community this property is in. If it's a small, tightknit community, the word might get around that she's a difficult buyer. I imagine that that happened to us, at least with one of the 2-3 realtors that had listings up where we were looking. We knew, though, that we were offering a fair price (based on comparable sales, which I studied on realtor.com and trulia regularly), not a lowball one, for each of our offers; and real estate was moving very slowly; so we thought that it was worth that risk. That's not going to be true in every community. In some, you'd be looked at as the mean, rich outsider till the end of time if you acted like that. It's important to evaluate that in a slow, small market. In the end we got a very good deal on a medium level home that suits us awesomely, and treated our seller extremely well, and got her out of a bad situation. We have made a bunch of friends locally, and they are glad that her old place is in good, appreciative hands. It worked out just great. Edited January 31, 2017 by Carol in Cal. 1 Quote Link to comment Share on other sites More sharing options...
Cinder Posted January 31, 2017 Share Posted January 31, 2017 (edited) When we bought our country house we offered about $60K below. Our realtor helped us figure out the house value as well as land value per acre. Seller had way overpriced and although our offer was significantly lower than asking price it was also generous compared to what the market was at that time. We thought it was our forever house so we were willing to go a little high even though the house needed quite a bit of work. Seller was motivated to sell though. She counter-offered and we went up just a smidge but it was enough. The sad part is that only a couple years later dh's job situation changed and we had to move. I guess my point is that although our offer was way below asking it was a fair price, actually on the high side of fair. Your realtor should be working with you to calculate what a fair price range would be for this property. ETA: you asked percentage. Our offer was about 20% below. Edited January 31, 2017 by Cinder 3 Quote Link to comment Share on other sites More sharing options...
Seasider Posted January 31, 2017 Share Posted January 31, 2017 Oh, I forgot to comment on the contingency. You need to sell your own house first! Because imagine this - in preparing your own house to sell, you discover unexpected issues that must be expensively remedied before selling. Or, it won't sell at your desired price. Or you get a contract and prospective buyers' inspection turns up stuff you need to make right. As someone else has pointed out above, it takes time to declutter and prep a house for sale. If you're not already busy about that, and you need proceeds from this house to buy the next, you're not ready. Do you have tenants in your rental right now? Can you get busy with selling that so you will have some good cash flow to work with? As a seller, I always had my listing agent even include "no contingencies" in the listing agreement. Too many dominoes to deal with, one falls and the sales of multiple properties can be affected. Admittedly, I've never sold an odd property in a poor market, but the contingency really affects your bargaining power. Are you really stretching to buy the new property? Because it sounds like it's going to need a lot of work. If you have to sell two houses AND super low ball the price to make it affordable, be careful. Working a terrific deal is one thing. Being house-poor and cash strapped is miserable. 5 Quote Link to comment Share on other sites More sharing options...
OneStepAtATime Posted January 31, 2017 Share Posted January 31, 2017 Oh, I forgot to comment on the contingency. You need to sell your own house first! Because imagine this - in preparing your own house to sell, you discover unexpected issues that must be expensively remedied before selling. Or, it won't sell at your desired price. Or you get a contract and prospective buyers' inspection turns up stuff you need to make right. As someone else has pointed out above, it takes time to declutter and prep a house for sale. If you're not already busy about that, and you need proceeds from this house to buy the next, you're not ready. Do you have tenants in your rental right now? Can you get busy with selling that so you will have some good cash flow to work with? As a seller, I always had my listing agent even include "no contingencies" in the listing agreement. Too many dominoes to deal with, one falls and the sales of multiple properties can be affected. Admittedly, I've never sold an odd property in a poor market, but the contingency really affects your bargaining power. Are you really stretching to buy the new property? Because it sounds like it's going to need a lot of work. If you have to sell two houses AND super low ball the price to make it affordable, be careful. Working a terrific deal is one thing. Being house-poor and cash strapped is miserable. :iagree: 1 Quote Link to comment Share on other sites More sharing options...
Scarlett Posted January 31, 2017 Share Posted January 31, 2017 Oh, I forgot to comment on the contingency. You need to sell your own house first! Because imagine this - in preparing your own house to sell, you discover unexpected issues that must be expensively remedied before selling. Or, it won't sell at your desired price. Or you get a contract and prospective buyers' inspection turns up stuff you need to make right. As someone else has pointed out above, it takes time to declutter and prep a house for sale. If you're not already busy about that, and you need proceeds from this house to buy the next, you're not ready. Do you have tenants in your rental right now? Can you get busy with selling that so you will have some good cash flow to work with? As a seller, I always had my listing agent even include "no contingencies" in the listing agreement. Too many dominoes to deal with, one falls and the sales of multiple properties can be affected. Admittedly, I've never sold an odd property in a poor market, but the contingency really affects your bargaining power. Are you really stretching to buy the new property? Because it sounds like it's going to need a lot of work. If you have to sell two houses AND super low ball the price to make it affordable, be careful. Working a terrific deal is one thing. Being house-poor and cash strapped is miserable. The contingencies issue I agree with. I never really understood the value of them, except in a situation where you have a contract on your current home and you are ready to buy unless your deal falls through. Dh asked me just last night about doing that....we found a house in town we love...but I'm like 'um, we are no where close to making an offer. Maybe if we had a contract on this place!' 1 Quote Link to comment Share on other sites More sharing options...
Crimson Wife Posted January 31, 2017 Share Posted January 31, 2017 The realtor has a financial incentive to get you to pay as high a price as he/she can in order to receive a larger commission. I wouldn't worry about "insulting" the seller- it's a business deal and if they don't like the price you think is fair, then they can try to find someone else willing to pay a higher one (good luck with that if it's been 6 years). We low-balled and at one point during the post-inspection negotiations even sent a signed cancellation notice. We were willing to walk away from the deal rather than pay more than we thought was fair. It was a buyers' market at the time and while I'm glad we did wind up coming to terms on this house, there were plenty of other options (including the house directly across the street). 1 Quote Link to comment Share on other sites More sharing options...
Lanny Posted January 31, 2017 Share Posted January 31, 2017 (edited) They are really complicating it by lowering the price and reducing the amount of land at the same time. The way they're doing it really makes it seem like they aren't lowering the price much, if at all. What do you expect the house/property will appraise for? I might have a quick appraisal done (around here we can buy a mini-appraisal for about $100 and they're usually pretty accurate. They just don't have all the documentation a full appraisal has.) If the appraisal is more in line with what you are willing to pay, go for it. Adding a contingency of your house selling is pretty routine here but there is always a limit like it has to be under contract in three months or the seller can end the contract with you. THIS... The OP has absolutely no clue as to the current approximate value of this property, as it is currently listed, with "n" acres of land. The appraised value might be 50% of what the Seller is currently asking for the house, with the reduced acreage. If that were to be the case and the OP offered 80% of the current "asking" price, the OP would be getting screwed. Also, if the OP makes an offer on the property, it must be Contingent on the OP being able to walk away, if the Inspector she hires finds things that are not acceptable to her family. Structural problems, roof problems, plumbing problems, etc., etc., etc. LET THE BUYER BEWARE... Edited January 31, 2017 by Lanny 6 Quote Link to comment Share on other sites More sharing options...
Lanny Posted January 31, 2017 Share Posted January 31, 2017 When we learned that this lot was for sale, and we learned the asking price, it was an extremely fair price. We wanted this lot. We did not make an offer at a lower price. We paid what the Seller asked, because we did not want someone else to buy this lot. That was during January 2003. We built this house and moved in during March 2004. This lot is probably worth 5 or 6 times, possibly more, than we paid for it. It was a great investment. We knew the value of the lot. The OP does not have a clue, as to the value of the property she is looking at, and should not consider making an offer, unless and until she has an Appraisal by someone SHE hires, not "her" Real Estate Agent, who is not working for her, and is not qualified to make that appraisal. She needs an Appraiser, with experience with Rural property in the immediate area. The land, plus the improvements. The utilities available, the access roads, everything must be considered. 5 Quote Link to comment Share on other sites More sharing options...
gardenmom5 Posted January 31, 2017 Share Posted January 31, 2017 (edited) The realtor has a financial incentive to get you to pay as high a price as he/she can in order to receive a larger commission. I wouldn't worry about "insulting" the seller- it's a business deal and if they don't like the price you think is fair, then they can try to find someone else willing to pay a higher one (good luck with that if it's been 6 years). We low-balled and at one point during the post-inspection negotiations even sent a signed cancellation notice. We were willing to walk away from the deal rather than pay more than we thought was fair. It was a buyers' market at the time and while I'm glad we did wind up coming to terms on this house, there were plenty of other options (including the house directly across the street). markets turn. sometimes suddenly. My sil low-balled a house that had been on the market for two years. she included a contingency she sell her house. offer was accepted. during that time - the seller got a full-price no-contingency offer. sil had to come up with the money to close the sale or she would have lost it. we had a low ball offer on my mom's condo. the RE used the excuse of "all properties in __ sell for __% under list". I honestly wanted to contact the buyer and tell them to do themselves a favor get rid of their idiot agent. (I looked at his listings and sales. he was an idiot.) eta: that was a turning point in our local market from struggling buyers to super hot sellers. Edited January 31, 2017 by gardenmom5 3 Quote Link to comment Share on other sites More sharing options...
TranquilMind Posted January 31, 2017 Share Posted January 31, 2017 Have you done this? What percentage? Was it what your realtor recommended? How can you trust your realtor? The property that we like has been for sale for 6 years. For the first 4 years with a massive amount of land, and the price reduced every 6 months or so. For the last 2 years the land size was reduced as well, and the price went down again, most recently 8 months ago. The price went down by $60,000 in those two years. In the last two years, according to the records, it seems that there was only 1 offer and it didn't go through (not sure of the reason yet, but implied that it was the buyer's financing). There was also one offer that didn't go through in the previous 4 years. We were told by well meaning friends to offer 20% below the asking price (which would be $50,000 below). Our realtor says that because our offer will be conditional on us selling our house first, we should start at 10% below the asking price. He feels that $50,000 below is insulting for our area. It does sound really bad to offer $50K less than they are asking, considering that only recently they were asking much more. The house is not maintained well and is probably quite unattractive to most people who like spotless and pretty. They still live there. It is messy, dirty (country-dirty) and not fully finished. I know she wants to sell it, and I heard she would sell for $30,000 below the asking price. But on the other hand she doens't have to sell it now--it is her family land and the house was built by her parents, and I'm pretty sure it is all paid off. She does have a place to go. She looked tired of selling, but friendly (we had to talk to her about the rest of the property and she took us for a nice walk.) WWYD? Absolutely. Just justify it with the comps. I once got a house with an offer tens of thousands below asking price, because the repairs warranted it (not talking upgrades I wanted, but repairs). But I justified my offer with evidence, they thought about it (they were over 80), and then took it. Justify any offer and it will be considered. A contingency makes your offer less desirable in the first place, so your offer needs to be stronger and meet her needs in some way (such as she can move out slowly, etc). I would take any direct offer without contingencies (other than say, mortgage, if they are financially strong) over an offer with contingencies like that, personally, but it can work if there is something in it for everyone. 3 Quote Link to comment Share on other sites More sharing options...
Catwoman Posted January 31, 2017 Share Posted January 31, 2017 (edited) IMO, the issue isn't how much the seller is asking for the house. The issue is not what percentage discount you offer on the house. The issue is how much the house is actually worth. The seller can ask for any price she chooses, but if her asking price turns out to be twice what the house is really worth, your 20%-off offer is still way too high. Your real estate agent is wrong if he's only thinking in terms of percentages. You need to know how much the house is actually worth, and make your offer on that basis -- and whether your offer ends up being 5 percent or 50 percent off the asking price has no bearing on that. The contingency arrangement may complicate matters and I would understand the owner being hesitant about that part of your offer, but you still need to know the actual value of the property before you even consider making an offer. The house has been for sale for a LONG time, so unless properties in your area typically take forever to sell, there's a good chance that it is significantly overpriced or there are hidden problems with the property that are keeping other buyers away. Based on what you have posted, I don't think your real estate agent is working in your best interest. Recommending that you only offer 10 percent less on a property that has been for sale for a long time and hasn't had multiple offers seems very wrong to me. After six years on the market, I would think any offers would be much, much lower. One other thing, though -- the property has been for sale for SIX YEARS. That's insanely long! Will the same thing happen when you want to re-sell it? That would be a huge concern for me. Edited January 31, 2017 by Catwoman 9 Quote Link to comment Share on other sites More sharing options...
Squiddles Posted January 31, 2017 Share Posted January 31, 2017 (edited) I just want to echo what others have said about getting your RE to check comparable listings, and get an accurate assessment... we bought land recently and we loved it and were willing to buy at the listed price. But our AWESOME real estate agent went to bat for us and insisted we could get a lower price... this is a clip of the cover letter she sent the sellers with an offer, they countered just slightly higher than her offer! Sounds like you need a new agent... This is just an example of a RE doing their work, checking comps, and actually representing you. "The market now seems to be at a point if a property is priced right and is without impediments, it sells quickly at list price. That being said, the property on XXXXX seems to be out of step with several recent sales of 5 acre parcels. I am attaching a thumbnail printout of them. This year in the XXXXX zipcode there have been 4 parcels sell at $72,500, $76,000, $82,500, and $92,000. None of them had Gun Club or Airport Noise. All had perc tests completed – all but one with standard soils. 3 had a building site cleared and a water share paid and one a $5100 hook up. With these comparable sales, I don’t believe your lot will appraise for the list price. The average of these 4 properties comes out to be $80,750 per 5 acre lot and again, 3 had a well, site cleared and standard perc. I hope this will help inform your decision as look at this offer. Thank you in Advance for your kind consideration of this offer." Edited January 31, 2017 by Squiddles 5 Quote Link to comment Share on other sites More sharing options...
Catwoman Posted January 31, 2017 Share Posted January 31, 2017 I keep thinking about this and I keep coming to the same conclusion. If that house was worth only 10 percent less than the asking price, it would have sold long before now. Get a new real estate agent. The agent you have is either too greedy or too chicken to present a low offer to the seller. You need an agent who will have the nerve to go to bat for you and try to get you the property you want at a fair price. It doesn't sound like your agent is willing to do that. It also doesn't sound like your agent has even tried to help you figure out the actual value, which I consider to be a big red flag, particularly on a property like this one, which has been for sale for SIX YEARS. Sorry to keep emphasizing the six years part, but I think it's a very important consideration. 11 Quote Link to comment Share on other sites More sharing options...
Crimson Wife Posted January 31, 2017 Share Posted January 31, 2017 markets turn. sometimes suddenly. And that's why buyers need to look at it as a business deal rather than emotionally and not "fall in love" with any particular property. If a buyer low-balls and loses the property to someone else willing to pay a higher price, lesson learned and next time consider offering something closer to listing. 5 Quote Link to comment Share on other sites More sharing options...
38carrots Posted January 31, 2017 Author Share Posted January 31, 2017 I would sell your house first, then make an offer. We don't want to sell if we can't buy that farm! 2 Quote Link to comment Share on other sites More sharing options...
38carrots Posted January 31, 2017 Author Share Posted January 31, 2017 what do the comparables for *your* area say? have you looked at those? similar landsize, similar home size and features etc. that have sold in the last six months or so. is your market going up or down? How do I look those up? Quote Link to comment Share on other sites More sharing options...
38carrots Posted January 31, 2017 Author Share Posted January 31, 2017 (edited) I have to agree that offering extremely low when you have the contingency of the sale of your house (which is not on the market yet and needs a lot of repairs IIRC) may not net you what you want. I, too, have seen people get very insulted and refuse to deal with someone because they felt they were not treating them or their property with respect. But even if they don't get insulted, you aren't actually ready to put your own house on the market yet, right? It still needs a lot to be ready? Am I confusing things? If so, I apologize. Honestly, I think things are sort of going a bit backwards here. Why not work really hard to get your house ready to sell first? I would not make an offer on the farm right now. It has been sitting for a while. I doubt it will sell out from under you. After you have decluttered and cleaned out and done any minor repairs (you said in your other thread you weren't intending to finish the major repairs right?) then see about offering on the Farm. That way if the offer is accepted you won't be in a total panic trying to get your house ready to go and you won't be forced to take seriously low ball offers for your home just to prevent the farm sale from falling through. If the offer isn't accepted, your house is still in better shape and you can reinvestigate what you really want to do. We are putting our rental property on the market this week. It is move-in ready (but also not a fancy place--just nice place in a working class area). We will find out in the next couple of days if this would be enough for a contingent offer. Edited January 31, 2017 by 38carrots 1 Quote Link to comment Share on other sites More sharing options...
38carrots Posted January 31, 2017 Author Share Posted January 31, 2017 THIS... The OP has absolutely no clue as to the current approximate value of this property, as it is currently listed, with "n" acres of land. The appraised value might be 50% of what the Seller is currently asking for the house, with the reduced acreage. If that were to be the case and the OP offered 80% of the current "asking" price, the OP would be getting screwed. Also, if the OP makes an offer on the property, it must be Contingent on the OP being able to walk away, if the Inspector she hires finds things that are not acceptable to her family. Structural problems, roof problems, plumbing problems, etc., etc., etc. LET THE BUYER BEWARE... The property's assessment is listed as 1/3 of the asking price, but we were told that that's normal for rural properties. ??? Quote Link to comment Share on other sites More sharing options...
Seasider Posted February 1, 2017 Share Posted February 1, 2017 The property's assessment is listed as 1/3 of the asking price, but we were told that that's normal for rural properties. ??? But who was it that told you that? 2 Quote Link to comment Share on other sites More sharing options...
Carol in Cal. Posted February 1, 2017 Share Posted February 1, 2017 The property's assessment is listed as 1/3 of the asking price, but we were told that that's normal for rural properties. ??? This is something you really need to check for yourself. Honestly, coupled with the other stuff this is a red flag to me. You can look up comparables on Trulia or Realtor.com. Search in the area for recent sales, and you will see the property address and the actual price paid for it. Then you can drive by and assess whether there are reasons to think that it's nicer or not as nice from a value perspective than the one you want. Then you assess from there. Also, your realtor should be able to justify the price she is suggesting you pay with comparables. Insist on that before you put an offer in. Buying a home based on the list price is even dumber (not that you're dumb) than buying a car based on the sticker price. If you pay too much for this, you won't be able to sell it, should you ever have to do so. And you might lock in high property tax rates forever, depending on the laws in your state. 2 Quote Link to comment Share on other sites More sharing options...
Annie G Posted February 1, 2017 Share Posted February 1, 2017 In our town, you take the assessed value and triple it and that's about what the fair market value is supposed to be. Is it like that where you live? 1 Quote Link to comment Share on other sites More sharing options...
gardenmom5 Posted February 1, 2017 Share Posted February 1, 2017 (edited) Absolutely. Just justify it with the comps. I once got a house with an offer tens of thousands below asking price, because the repairs warranted it (not talking upgrades I wanted, but repairs). But I justified my offer with evidence, they thought about it (they were over 80), and then took it. Justify any offer and it will be considered. A contingency makes your offer less desirable in the first place, so your offer needs to be stronger and meet her needs in some way (such as she can move out slowly, etc). I would take any direct offer without contingencies (other than say, mortgage, if they are financially strong) over an offer with contingencies like that, personally, but it can work if there is something in it for everyone. dd bought without requiring an inspection, and was prequalified. the seller provided one as well as a run down of all needed repairs and estimated costs (we happened to be acquainted with the builder's son) to make a bank happy (most weren't pressing.) it was a run don't walk house, that had two offers the first day it was listed, and one more the next day. it was being sold by a relo company, and dd's had an escalation clause - it went over list. if the relo company had cared at all about getting top dollar - they would have waited through the first weekend and looked at offers come monday. ** they didn't. they had three offers - the accepted the best - which included NO contingencies of any kind - and were done. there were TEN people through that house over the weekend who wanted to write an offer - they called the seller's agent. (it hadn't hit the mls as sold/pending.) identical floor plan house in the same neighborhood at the exact same time, some pros and some cons in comparison - sold for significantly more. ** we looked at a house where the sellers did just that. weekend open house, bring your best offer come monday morning. it sold well over list. (we have a super hot market) I keep thinking about this and I keep coming to the same conclusion. If that house was worth only 10 percent less than the asking price, it would have sold long before now. Get a new real estate agent. The agent you have is either too greedy or too chicken to present a low offer to the seller. You need an agent who will have the nerve to go to bat for you and try to get you the property you want at a fair price. It doesn't sound like your agent is willing to do that. It also doesn't sound like your agent has even tried to help you figure out the actual value, which I consider to be a big red flag, particularly on a property like this one, which has been for sale for SIX YEARS. Sorry to keep emphasizing the six years part, but I think it's a very important consideration. or too stupid to really understand about comparables to get a legitmate valuation and how to make a case. and . . . another reason why you need a new agent. And that's why buyers need to look at it as a business deal rather than emotionally and not "fall in love" with any particular property. If a buyer low-balls and loses the property to someone else willing to pay a higher price, lesson learned and next time consider offering something closer to listing. absolutely. one thing I remember from a jury pool I was on. it was against a dealership (this case drove them out of business.) a potential juror bought a car from them, and during questioning she kept whining about how they wouldn't give her "HER" car. honey - it isn't your car until you have a contract, and you need to be willing to walk. away. she was dismissed. How do I look those up? any RE site will have lists of recent sales. you look up recent sales in your area for simliar house, similar land, etc. you get an idea for location value, land value, house value. your RE agent should have done this - have you asked him for his list of comps? The property's assessment is listed as 1/3 of the asking price, but we were told that that's normal for rural properties. ??? sez who? the seller? your RE agent? your county tax board? there are assessors who are lazy, and assessors who are greedy. there are homeowners who go with whatever the assessor says - and owners who fight (and win) their tax assessment every time. eta: when it comes time to sell - the ONLY number/value that matters, is what someone is willing to pay. Edited February 1, 2017 by gardenmom5 3 Quote Link to comment Share on other sites More sharing options...
Happy Posted February 1, 2017 Share Posted February 1, 2017 The property's assessment is listed as 1/3 of the asking price, but we were told that that's normal for rural properties. ??? It can be very normal. The TAX appraisal is different than an appraisal of value. Your agent should be able to pull comparable SOLD prices for similar properties. That coupled with knowing what the house is like is a good way to determine value. 3 Quote Link to comment Share on other sites More sharing options...
gardenmom5 Posted February 1, 2017 Share Posted February 1, 2017 This is something you really need to check for yourself. Honestly, coupled with the other stuff this is a red flag to me. You can look up comparables on Trulia or Realtor.com. Search in the area for recent sales, and you will see the property address and the actual price paid for it. Then you can drive by and assess whether there are reasons to think that it's nicer or not as nice from a value perspective than the one you want. Then you assess from there. Also, your realtor should be able to justify the price she is suggesting you pay with comparables. Insist on that before you put an offer in. Buying a home based on the list price is even dumber (not that you're dumb) than buying a car based on the sticker price. If you pay too much for this, you won't be able to sell it, should you ever have to do so. And you might lock in high property tax rates forever, depending on the laws in your state. or redfin or zillow. you're looking at closed sales within the last (generally) six months. 2 Quote Link to comment Share on other sites More sharing options...
Katy Posted February 1, 2017 Share Posted February 1, 2017 What does Zillow say the house is worth? Quote Link to comment Share on other sites More sharing options...
gardenmom5 Posted February 1, 2017 Share Posted February 1, 2017 (edited) What does Zillow say the house is worth? i would NOT rely on what zillow says a house is worth. there are many factors zillow does not include that affect price. I seriously rolled my eyes at a neighbor who listed their house for what zillow said it was worth. zillow was high by at least 20%. (and that's in a hot market.) they still own that house. we'll see when they try to sell it again. there are other houses in the area where zillow has been seriously low - based on how much the house actually SOLD. Edited February 1, 2017 by gardenmom5 1 Quote Link to comment Share on other sites More sharing options...
Arcadia Posted February 1, 2017 Share Posted February 1, 2017 The property's assessment is listed as 1/3 of the asking price, but we were told that that's normal for rural properties. ??? My property tax assessment has a value for the land, and an added/improved (not sure actual terms as I am outside) value for the building. The land value for my unit is less than 50% of total assessed value. I would offer below if I don't have to see the owner frequently. As in the house you want is in a nearby area. It can get awkward if I offer low for my neighbor's unit, in which case I would have a realtor front the negotiations. I do have neighbors who bought a bigger place when the housing market crashed and they just held onto their older/smaller units until now when prices are hot. A bank held my friend's short sale unit for many years and sold higher than what she bought for, so sellers do hold if they aren't in a hurry to cash out. A friend is holding onto an empty plot of land he inherited for his kids. They can live off the grid if need be. 1 Quote Link to comment Share on other sites More sharing options...
Jyhwkmama Posted February 1, 2017 Share Posted February 1, 2017 You need an appraisal. 2 Quote Link to comment Share on other sites More sharing options...
LMV Posted February 1, 2017 Share Posted February 1, 2017 (edited) Have you done this? What percentage? Was it what your realtor recommended? How can you trust your realtor? The property that we like has been for sale for 6 years. For the first 4 years with a massive amount of land, and the price reduced every 6 months or so. For the last 2 years the land size was reduced as well, and the price went down again, most recently 8 months ago. The price went down by $60,000 in those two years. In the last two years, according to the records, it seems that there was only 1 offer and it didn't go through (not sure of the reason yet, but implied that it was the buyer's financing). There was also one offer that didn't go through in the previous 4 years. We were told by well meaning friends to offer 20% below the asking price (which would be $50,000 below). Our realtor says that because our offer will be conditional on us selling our house first, we should start at 10% below the asking price. He feels that $50,000 below is insulting for our area. It does sound really bad to offer $50K less than they are asking, considering that only recently they were asking much more. The house is not maintained well and is probably quite unattractive to most people who like spotless and pretty. They still live there. It is messy, dirty (country-dirty) and not fully finished. I know she wants to sell it, and I heard she would sell for $30,000 below the asking price. But on the other hand she doens't have to sell it now--it is her family land and the house was built by her parents, and I'm pretty sure it is all paid off. She does have a place to go. She looked tired of selling, but friendly (we had to talk to her about the rest of the property and she took us for a nice walk.) WWYD? Honestly, the way you have described this property doesn't appeal to me so I would probably keep looking. However, if we presume that I was interested in the property then I would determine what I felt was fair market value [DH and I have bought multiple homes both for our family [the joys of life as it is we have always had a second home and often have been splitting time between three] and for rental purposes so unless we're looking an unfamiliar area we're often quite able to pull our own comps and run some informal appraisals---if you don't have this experience then this is where your real estate agent should be helpful], then I would offer fair market value (or possibly slightly above depending on if we really wanted the property or perhaps we sensed that this was a situation where we could/should give a little on the deal in the interest of humanity), contingent on the inspection/title process being clear. Personally we've never done contingencies for our house selling because we've never needed that (we're usually purchasing an additional home or a rental property so selling is not part of the plan) and we've never done financing contingencies because we're usually not planning on financing. I think you need to figure out what the fair market value is and offer that plus something extra if you are asking them to accept any contingencies. Edited February 1, 2017 by LMV 1 Quote Link to comment Share on other sites More sharing options...
luuknam Posted February 1, 2017 Share Posted February 1, 2017 (edited) No real advice. We did put in an offer that was below what the realtor told us was the bottom of what the sellers (two retired brothers who'd inherited the house or something) were willing to take (the realtor had no real benefit in lying about that - the difference in his commission was negligible). It had been on the market for a while - I'm not 100% sure what it was originally listed as - I know it had been reduced from $18,500 to $15,000, but I think the original listing had been higher. We offered $13,500 and got it. In your situation, I'd get an appraisal. ETA: the realtor had also told us people had put in low ball offers on it, and had been turned down. The realtor was doubtful the sellers would go for $13,500, and I suspect the realtor just wanted to be done with this property, but it worked. That said, the realtor didn't think the sellers were going to be offended - just that they were likely to say 'no'. Edited February 1, 2017 by luuknam 1 Quote Link to comment Share on other sites More sharing options...
Lanny Posted February 1, 2017 Share Posted February 1, 2017 OP in addition to you needing to pay someone who is experienced and qualified to appraise the property for fair market value you also need to know whether or not your lender will finance rural property and in particular that property. The lender needs an appraisal Sent from my SM-G355M using Tapatalk Quote Link to comment Share on other sites More sharing options...
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