Maybe someone can explain this to me-NEW UPDATE! #71

[luvflorida]

Are you sure your asking price IS still reasonable?

Have you done any recent comps? It could be home prices are lower now then when you first listed, and that could account for it. If values have droped, they may not have been low-balling you as much as you think.

We took the house off the market for a year, and just put it back on the beginning of June. We have a six month contract. We lowered the price from when it first was on the market and the house is DEFINITELY reasonably priced. We made sure to price it below the asking prices of comparable homes in the area.

It's ugly but it's reality. If you're NOT desparate, maybe you should wait until the market gets better.

At this point, if it doesn't sell by the end of our contract, we're taking it off the market. We don't HAVE to sell the house, but it would be NICE if we could. We love the house, but for a variety of reasons, we have relocated to another part of the country (weather and family mostly) and the house seems like a heavy weight on our shoulders, if that makes any sense.

There is always the worry of things needing to be repaired or something going wrong with the tenants (we're renting it out at the moment). Honestly, we've talked of keeping it as a second home or summer home, but it's really too big of a house to keep for that reason. It would be nice to sell it and buy a smaller house in that same area, that we could use for the summer and holidays.

 

[Magpie]

There was a well-loved and maintained heritage home in a very expensive part of my town up for sale - I used to walk past it, sometimes. It was right on the edge of parkland, just gorgeous, with a beautiful glassed-in green house.

The owners tried all sorts of things to sell it, even creating a virtual walk-through website. The website was entertaining, but the house didn't sell. It wasn't overpriced, it was just more than people were willing to spend at that time and the owners weren't willing to sell it for less than it was worth.

And as the house sat there, unoccupied, through one winter and then another winter, the roof began to sag and cracks appeared and squirrels broke in... OP - you've got tenants in your home, so it'll last longer than a house that's sitting empty. But tenants can also bring down the value of a home, even reasonably good ones.

Recently the owners gave up and ended up selling it for just the value of the land it sat on (considerably less than the house had been worth!), and now it's being torn down.

I feel sad every time I walk past that property now. It really had been a beautiful house, once. I wish the owners had sold it to someone back when they had the opportunity, because now there's a big McMansion going up where it used to be.

 

[Bethenny]

It's quite possible they love the house and that's all that they can afford. And they thought they'd try to see if they can get it. We looked at a house that was listed $25k above our budget, but we loved it. If we had decided to try to get it, would probably would have offered $50k less (so there was room to negotiate). The owners would have been well within their right to not accept it and we would have been fine and moved on. It doesn't hurt to try.

 

[HM]

We had a couple lowball us on our last home. We countered close to our selling price. They came back with another low offer and word from their realtor that it was take it or leave it as there was another house in the neighborhood that they could get. We said, leave it. We knew the other house was a lot less desirable than ours because of the layout and size, but if they wanted it, fine. We'd just wait for someone else. They were back two weeks later with a better offer, we countered that one and finally with the help of both realtors came to a compromise we could live with.

 

[hopemax]

With this market, it's hard to know what "market value" actually is. There is a huge amount of shadow inventory, banks are trying to keep from market because there is already a glut of homes available, lending has tightened, people are nervous. A lot of the interested buyers, bought when the tax credit was available. But to try and help with the confidence numbers, there is still a lot of "talking up," "this number is good, so it means we're close to a turn around," etc. Everyone is trying to justify holding prices higher, but if it's not selling, and you can't obviously point to something that is an obvious buyer turnoff, price has to be on the table.

My inlaws have been trying to sell for over 2 years. The market in their town is so dead that there are almost a thousand homes available, but the sales in a month you can count on two hands. I look at the economic situation, and I don't see prices going up, and a good chance they continue sliding. If I were trying to anticipate the market, I would definitely lowball, and a lot.

You need to really research your market. Do buyers have a lot of choices in your price range? How is unemployment in your area? Is anything selling? You might find a comparable, but if that home is the only sale out of a hundred available homes, it may not be truly indicative of the market. Maybe there was something unique to that home with that buyer that made them jump.

My in-laws, were eventually told that the house they originally priced at $230K, and dropped to $179K might not even sell if it was priced at $98K because there are just so many homes for sale and no buyers. They are close enough to paying it off, that they decided to just rent it (and thankfully, they found a renter.) And there house is nice too, only positives.

 

[golfgal]

It's quite possible they love the house and that's all that they can afford. And they thought they'd try to see if they can get it. We looked at a house that was listed $25k above our budget, but we loved it. If we had decided to try to get it, would probably would have offered $50k less (so there was room to negotiate). The owners would have been well within their right to not accept it and we would have been fine and moved on. It doesn't hurt to try.

You could have still just offered $25K less and see what they said. Since you knew your top, and if they countered and it was too high, you could have walked away but at $50K less they may not have considered your offer at all not know you really had $25K of room.

 

[NotUrsula]

Don't be insulted. Nothing screws a transaction this big more soundly than letting your emotions get in the way.

I *always* go into any transaction with the viewpoint that "the worst they can say is no." If you get insulted and refuse to counter, I'll just assume that we can't do business, and I'll move on.

 

[castleview]

We severely "under-offered" on a house. The owner wouldn't counter-offer and said "you could have the shack down the street for that price." He didn't have to be insulted, we just gave it a try because we thought he was way above asking price (as did our realtor). We actually got a call back from that person a few months later, but we already had a home by then.

Bottom line: Don't take it personally. It's a buyer's market and people are going to reach when they offer. Just like when it's a seller's market and people will reach when they set the asking price.

 

[castleview]

... Our house is priced well below market value. It is a very nice house, extremely well maintained inside and outside. Everything is in very good shape. All the feedback we've gotten from showings has been excellent.

Keep in mind that people are looking at it from a different point of view. They don't see what you've put into the house. I've seen a few friends ignore their realtor's advice and overprice their home because they think buyers will appreciate it for the same reasons they did.

Also keep in mind what NotUrsula said. You don't want a nasty closing so think of it as business.

 

[Bethenny]

You could have still just offered $25K less and see what they said. Since you knew your top, and if they countered and it was too high, you could have walked away but at $50K less they may not have considered your offer at all not know you really had $25K of room.

Just a different school of thought. We would have wanted to pay less than our absolute top if we could have. No way was I going to start with our highest price.

 

[golfgal]

This is nothing to take personally. I know it's your home but it is a business transaction.

We once offered $60k less and the sellers asking price. They came back with "we're insulted" and not a counter offer. I don't understand that. We wanted to negotiate and never expected them to just take our offer, but we wanted the lowest price we could get.

That house sat for well over a year and that was during the time that the housing market started to slump. I often wondered what they were able to sell it for. I am sure it was no where near their asking price.

As another pp said, your house is worth what someone is willing to pay for it and what you are willing to accept.

In our state all these records are available online on our county website. They are all considered public records so anyone can view them. We can look them up by address and see the sale history.

 

[Darcy03231]

I think you really need to look at how many houses are for sale in the area and how many have sold each month in the last few months. It may be a case of lots of inventory and not enough buyers (like what a previous OP mentioned).

Where I live houses are still moving, although much slower than in the boom. Where houses used to sell in hours or days its now taking months. I read a survey of home sales in our state recently that showed in our area if your home is priced for the market it will usually take 3-6 months to sell. While inventory is low, it isn't high either and our city is attractive to buyers for a number of reasons. Luckily, we're in a very desirable pocket of our city and there is very low inventory in our neighborhood. Not much stays on the market too long, unless its overpriced (which has happened). The house 2 doors down from me sold for full price in less than 2 weeks, and it wasn't underpriced. It sold for about $30k less than it would have during the boom, but the owners still did fine because they bought it back in the early 70's.

We own a 2nd vacation home in another part of our state. That area is a whole different story. There have been lots of foreclosures in that area (tourist area) and there are tons of homes on the market. The same survey showed in this area even if your home is priced for the market it could take 2 years+ to sell, because there is so much inventory on the market! High inventory and lack of buyers makes it tough to sell a home here. A house just down the street from ours just went under contract and is due to close in the next thirty days. House has been on the market for about 18 months and was priced for the market. Owners sold it for $100k less than the bought it for and they dumped another $100k into it after they bought it (new roof, new septic system, renovated the kitchen and bathrooms).

I guess my point is that even if you're priced for the market if you have a lot of inventory where you live and not a lot of buyers, you may be better off renting your home for a while.

 

[curious3069]

I heard an interesting bit of info on NPR this morning...approximately 25% of all homes sold in the country in the 2nd quarter were foreclosed homes and they sold for an average of 26% less than homes not in foreclosure. Though those properties might not be as well maintained, I can see how that sort of price competition would lower the offers you end up getting and is going to start changing market value for all homes.

 

[sbell111]

Market value is a funny thing. The fact that the house was on the market for quite a while with no offers suggests that it isn't priced below market value.

 

[snykymom]

Selling and purchasing houses, or anything that is clearly negotiable, is a psychological exercise as well as a business transaction.

By pricing your home "under market value," you probably thought that buyers would see that they're getting a good deal and snap it up. However, the low price may have buyers thinking, "OK, what's wrong with it that we can't see or don't know or maybe won't come up in a home inspection?" (like the neighbor with the 12 pit bulls that roam around every night). Buyers also want to believe that they are savvy negotiators and are able to get a bargain. So they start significantly below the asking price.

If you want to play the game, you have to know the rules.

The Wall Street Journal the other day had an article on the housing market, talking about the fact that sellers believe that, since the market has begun to rebound, their houses are now worth more. Buyers, on the other hand, believe that they should be able to get even reasonably priced houses for a song. So houses are both priced too high, and get too many low-ball offers. That, more than anything, is what is stalling the recovery of the housing market.

 

[flowerboy]

I also bought my house using a low ball and got it. The people selling the house priced it according to other houses for sale. I gave my offer based on sold comparables not unsold asking prices. They needed to sell and I would not get financing if the house did not appraise. All the bank would look at is 3 months worth of sales in a declining market. The only sale that matched their asking price was from 9 months ago.

 

[java]

Is this house in Florida? People are getting steals of deals there because of the overdevelopment. What % off the price is their $45000 below? 10% off the asking is normal first time bids.

Remember as others have said it's business. People know this is a buyers market and sadly there are many that are desperate to deal.

 

[barkley]

In our state all these records are available online on our county website. They are all considered public records so anyone can view them. We can look them up by address and see the sale history.

this can be a little misleading though-the public records sites (at least the county records we have) record the sales price-not nesc. what someone ended up truly purchasing the home for after the seller credits are figured in.

we had to break this to some family members while settling an estate recently. they had looked up on the county website how much the deceased had recently sold their home for but we had the sales contract which showed the credits back to the buyers being over $10,000 (killed dh and i cuz if the relative had consulted us during negotiations we would have told them to insist that the correct sales price be reflected-they could have saved allot of money in r/e comissions and capital gains taxes).

 

[marcyinPA]

Well, it definitely would be a steal! We are not desperate to sell and will keep it before we give it away!



So true. I know that most buyers don't expect their first offer to be accepted, but I just can't believe these people are sitting back thinking we'll even come close to their offer.



It IS hard not to take it personally! We wanted to outright reject the offer, but our real estate agent suggested what you suggest. Go down five thousand and see if they're serious.

I'm surprised that the buyers agent would even write an offer up if the buyers weren't serious. I sold real estate for a few years before I "retired" from it, and I made it pretty clear that I would not write an offer unless it was a serious offer. What a huge waste of time if they are just playing around!

 

[rie'smom]

Our house is up for sale. We got an offer yesterday, the first one in a long time. Our house is priced well below market value. It is a very nice house, extremely well maintained inside and outside. Everything is in very good shape. All the feedback we've gotten from showings has been excellent.

The offer we got yesterday is for $45,000. under the asking price. Now I understand that anyone has the right to make ANY offer they want. But seriously, THAT much under the asking price, especially knowing that the house is already priced well under market value?!?!

I just can't understand someone coming in with an offer so low. Do they really think we're going to say yes, or even counteroffer with something close to their offer? We're willing to negotiate, but honestly, they're so far off the mark that it's insulting.

I very seldom vent here about anything, but this really got to me. This whole house selling thing has been a real pain in the you-know-where!

If someone is really interested in buying a house, don't you think they'd be a little more realistic in their offer?

Counter with something you think is reasonable. They'll either come back or walk away from your house. IMO, it's foolish to do nothing.

In our town where housing values have remained steady-on the good side- someone I know made an offer on a house. The people told them to come back when they were serious. The house stayed on the market and eventually sold for less than the original offer.

Things in the housing market will not improve anytime soon hence the low interest rates. If you don't have to sell fine but remember the real estate adage: " The first offer will probably be the best offer." There's a glut of houses so buyers are in a great position.

Don't be insulted. Nothing screws a transaction this big more soundly than letting your emotions get in the way.

I *always* go into any transaction with the viewpoint that "the worst they can say is no." If you get insulted and refuse to counter, I'll just assume that we can't do business, and I'll move on.