Selling house, low-ball offer received, need advice - long

[Buckeye]

We have decided to counter at $267,500. I'll get the offer faxed over in the morning and we'll see what happens.

 

[REWahoo]

Sounds like a good number to me. Hope your potential buyers are rational folks and you can come to terms.

 

[harley]

Many years ago I saw a sign on the bulletin board at w*rk by a woman trying to sell her car. "For sale, asking $4000, will accept $3200".

 

[Bestwifeever]

I think if you counter too low (or worse, don't counter) that the sellers will think there is something wrong with the place if you're trying to unload it so quickly for such a low price. So good counter offer, imho, and good luck!

 

[clifp]

Certainly not an unreasonable counter offer on your part.
I am certainly no real estate expert and don't even claim to be one on internet, and you obviously know the Ohio market and I have no clue.

Still a couple of points. 3 years I end up getting three separate appraisals for my house (my ex girlfriend and I were splitting up) within a month. The difference between the top and bottom appraisal was almost $200,000 or 22%, and this was from people paid to make a fair estimate i.e. nobody was trying to lowball us.

The other thing to consider is that during up markets houses often appreciate 1-2% a month (well out here on the West Coast). So it stands to reason during a down marketing in housing they properties maybe depreciating at the same rate. So even if the appraisal was accurate back in Feb your house may have dropped 10% in value this year.

 

[Buckeye]

clifp - I also got an appraisal on May 6, 2009 for the refi and it came in at $270,000. Unfortunately, an appraisal doesn't mean much if the buyer doesn't have to get financing. If I was the all-cash buyer and the seller showed me the appraisal, I'd tell the seller to show it to someone who cared!

The only thing that has appreciated around here recently is farmland. As far as houses go, my estimate is that a really good year for housing appreciation during a hot market is 3%. It's different living out in the cornfields.

People in my county are quite conservative in every way, including financially. There's not a lot of speculation going on around here. Talking to the credit union president (who has also worked for Sky and Huntington) during our refi closing, he said he always wins the "most 800 credit score contest" compared to other branches in other counties. There is a ton of wealth around here but hardly anyone flaunts it.

 

[Texas Proud]

Did you still have it listed for $299K

If so, then the seller might have taken a look... said it was over by more than $30K so he had to go down by more than $30K to show how high your listing was....

That was the problem with the house I bought... they had it listed $20K over an appraisal, thinking that what they had done to the place was worth money to someone else...

I had to lowball it just to get them to recognize how high they had it listed...

 

[Buckeye]

Texas - I reduced the listing price to $279,900 about 3 weeks ago not long after I received the refi appraisal. The price on Realtor.com had been changed and I had stickers on my flyers in the flyer box that said, "reduced $20,000 to $279,900." The price was also updated on the house website, forsalebyowner.com, craigslist and zillow.com. I also advertised the new price and price reduction in our weekly county newspaper. I also had a "price reduced" topper made for our sign.

 

[GoodSense]

Good counteroffer. I used to be a real estate agent and that sounds like a good counter-price. I am guessing you'll end up in the $250K's -- not sure if that would be satisfactory to you.

One thing you can tell the buyers is that your appraisal showed your house is worth $270K, so you have already gone down to lower than the appraised price. Even if they don't need a mortgage, it will make them feel 1) you didn't just make up a counterprice, and 2) they are getting a good deal no matter what price you ended up with.

 

[youbet]

Sounds like a good number to me. Hope your potential buyers are rational folks and you can come to terms.

Is it a matter of the buyers being rational or more a matter of alternative homes available to the buyers?

 

[Buckeye]

There are other homes available in the area but nothing that is comparable. Most of the homes for sale around here are country homes but buyer wife wants to live in a subdivision. The homes in our subdivision are beautiful and the local builder who built them has an excellent reputation. I still love walking the neighborhood just to look at them. Our home is only 7 years old (occupied for 5) which is 5-10 years newer than others for sale. Our home is custom-built quality which is definitely not found in the others for sale. Our home shows extremely well since it was completely painted and professionally decorated and staged in the last 6 months. No kids have ever lived here so it literally looks brand new.

The house also has a 12' x 12' master walk-in with custom shelving. It's to die for! I'm really go to miss it.

I absolutely love the house and the neighborhood but I love DH more so it's off to FL!

 

[jimnjana]

Sorry.. home warranty is cheap and it is expected by a number of people.. it would not make a difference with the gap that is here...

That's my way of telling the people no thanks, their original offer was way too low and basically don't waste my time.

Jim

 

[Buckeye]

The counter-offer of $267,500 was faxed at 8:30 am and I have asked for a response by the end of the weekend. Happy to spend the time working on it and it is not considered wasted time in this market! I might have felt different if the offer came in so low and was not an all cash offer.

Our turn to wait although the buyers didn't have to wait 24 hours for our response. Hopefully, another interested buyer will show up at Sunday's open house and we can make this real interesting!

 

[FinanceDude]

lot. We are listed with a discount broker (on realtor.com and forsalebyowner.com and the house has its own website which I built) so we have done all the marketing ourselves.

This is probably the reason you are getting lowballed. While I know many on here have sold their own homes, this is still NOT a great real estate market. The ONE thing you are missing are BUYERS, which is what realtors provide.

I think you are being pennywise and pound foolish by not using a realtor. Even after commissions, I think a realtor will get you the best price. Look for a realtor that is a buyers broker and go from there.

My 2 cents, YMMV........

 

[ziggy29]

This is probably the reason you are getting lowballed. While I know many on here have sold their own homes, this is still NOT a great real estate market. The ONE thing you are missing are BUYERS, which is what realtors provide.

I'd add to this, actually. There is a common belief among buyers that if you are going FSBO (more or less), that means you have close to 6% more "wiggle room" in your pricing.

 

[Bestwifeever]

I was thinking that too, Ziggy--I would lowball a for sale by owner listing too, assuming they were trying to save themselves the real estate commission but not passing that on to me. And as far as the seller is concerned, a buyer who can get financing is the same as an all-cash buyer, right (most sales are "all-cash" to the seller at closing, right?)?

I hope you get some serious lookers this weekend, Buckeye--your house and neighborhood sound great!

FD, DH is from a small town with hardly any residential turnover, and a lot of sales are simply word of mouth, never mind a realtor or a for-sale-by-owner listing--not always important to have a realtor and some people there are turned off by the two or three agents in town, while in our suburban area, you couldn't sell a house without a realtor.

 

[Buckeye]

FinanceDude - My listing in Realtor.com and in all of my other literature states I will pay a buyer's agent 3%. I have no problem compensating the person who brings me the buyer. I didn't need the help marketing the home so I went through a flat fee discount broker and did not pay someone commission to list it. Buyers' agents are worth every penny you pay them! I don't have the same feeling about listiing agents, especially the ones in my small town. An agent representing a buyer for my house can make as much on the sale of my home as on a typical sale around here ($150,000). If an agent is truly representing a buyer, she will be happy to bring me the buyer if my house is the one that fits the bill. We have made the buyer's agent's job easy because the home is in perfect condition and shows very well. No need for the agent to explain to the buyer why a little paint here and there and maybe some new carpet will make the home good as new. The buyer gets a beautiful, move-in ready home and the agent gets 3%. What's not to love?

I understand about what you are saying about the all cash offer and the proceeds of a loan being the same but we all know lots of deals are falling apart because financing cannot be obtained.

Bestwifeever - You are correct about the power of word-of-mouth in a smaller community. That's why we encourage anyone and everyone to come through the house during open houses and why we have had them virtually every weekend since putting the house on the market. Even if the looker is not qualified, they may end up standing next to someone who is looking for a house who is qualified. My next-door neighbor just told us he referred us to a guy he does business with who mentioned he wanted to move back into the area. My husband just went to pay our property taxes and the treasurer asked him how the selling of the house was going. The ladies at the post office gave him a bad time because the house is for sale and he's going to be moving away. The word is out!

We've made extensive use of Realtor.com over the years so I made sure we had a presence there. The couple we are negotiating with found us there.

 

[GoodSense]

We have made the buyer's agent's job easy because the home is in perfect condition and shows very well. No need for the agent to explain to the buyer why a little paint here and there and maybe some new carpet will make the home good as new.

I would have to offer a different opinion. Buyer's agents do not like FSBOs even when they get paid the same amount. FSBO means the buyer's agent has to deal with the seller directly, instead of a fellow realtor. During a real estate transaction, emotions often run high. If there is no seller's agent, there is no "buffer."

Another reason that agents do not like dealing directly with principals they do not represent is that often the agent would have to put together the transaction for both sides, instead of just ensuring the buyer's side is running smoothly.

I am just saying in general that's what agents may think. Of course you sound like experienced sellers who know what they are doing, so your case may be different.

 

[Rustic23]

Here is a bit of information that most people do not realise.

"Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®."

Most folks, moi included, use the term Realtor for a real estate agent. When in fact if they are nt a member of the Nation Assoc. of Realtors they are not a Realtor.

 

[youbet]

The counter-offer of $267,500 was faxed at 8:30 am and I have asked for a response by the end of the weekend. Happy to spend the time working on it and it is not considered wasted time in this market! I might have felt different if the offer came in so low and was not an all cash offer.

Our turn to wait although the buyers didn't have to wait 24 hours for our response. Hopefully, another interested buyer will show up at Sunday's open house and we can make this real interesting!

I've never tried to sell a house in a slow market, so no real experience with what you're going through. However, it does seem like either this family will determine that your house best suits them of those available in the area and in the price range or not.

You've countered asking for approximately the appraised value so your home is not a "bargain." Now it's a matter of the folks making the offer deciding that the features of your home which are so attractive to you appeal to them enough to pay market or appraised price and do a deal.

How is traffic going? Open houses well attended? Any other offers?

Although the lack of a basement and the corner lot would be negatives for me, your house sounds attractive and hopefully will appeal to many buyers before winter sets in again......

Good luck!

 

[REWahoo]

Guess my point is they may be back but it would seem that a listing price that is well over what the house will appraise for might be a problem for most people?

Looks like that has been taken care of:

Texas - I reduced the listing price to $279,900 about 3 weeks ago not long after I received the refi appraisal. The price on Realtor.com had been changed and I had stickers on my flyers in the flyer box that said, "reduced $20,000 to $279,900." The price was also updated on the house website, forsalebyowner.com, craigslist and zillow.com. I also advertised the new price and price reduction in our weekly county newspaper. I also had a "price reduced" topper made for our sign.

 

[davemartin88]

Looks like that has been taken care of:

Oops, missed that! Deleted my post.

 

[REWahoo]

Dave, you should have left it. Except for that one paragraph it was good stuff.

 

[Buckeye]

youbet - The $267,500 was our first counter-offer. I expect (hope) to go at least another round. I did not want to give away the store on the first round but at least indicate we were willing to negotiate. We will go at least as low as $260,000 and possibly a little bit lower if it looks like we are approaching a number we can agree on that is near $260,000.

The whole thing is a bit interesting because dad (a successful CPA and owner of a beverage drive-thru in the neighboring town) is the bank for the deal so the adult children (I'll call them "the kids") may not be in total control of the deal. The kids may have decided the house is the one for them but dad my have to get the house at a huge discount and feel like he "won" in order to allow them to accept the deal. I'm hoping daddy will buy his little girl whatever she wants!

Normally, I wouldn't like a corner lot but our sub-division is at the end of a residential street so we don't get any thru traffic. The only traffic is from visitors and residents although when the weather is nice we get Sunday afternoon cruisers who like to come back and look at the beautiful houses. The lack of a basement is an issue around here but we have a huge three car garage (3 individual doors) and an additional 400 square feet on the second floor which we are marketing as our "basement up above!" I have attached a picture. If it was just about the space, the space is available but the word "basement" is part of the culture around here. I can't stand basements unless they are walk-out as I want a room to have at least some natural light. The land is very flat around here so there are very few walk-out basements. When I bought this house, the builder was living in and selling the house across the street with a 2-car and a basement. I was in-love when I saw the 3-car garage so I bought this one.

We have had visitors at every open house but we have not received any other offers. From the minute they arrived, it was obvious these folks were buyers. A whole different energy. Not taking this deal could easily mean we are in this house for another year so we are weighing all factors. The thought of actually having to move AGAIN (and to something not nearly as nice) keeps me from dropping the price just to ensure a sale now.

 

[youbet]

. The lack of a basement is an issue around here but we have a huge three car garage (3 individual doors) and an additional 400 square feet on the second floor which we are marketing as our "basement up above!" I have attached a picture. If it was just about the space, the space is available but the word "basement" is part of the culture around here.

Basements are very popular here in the Chicago suburbs too. We benefitted from ours in two ways over the years. While we were raising the family, it was a large, indestructible place for kids to be in the winter where activities such as indoor soccer, floor hockey, mats on the floor for tumbling, etc., etc., were not only allowed but encouraged. Now that we're empty nesters, my workshop and hobby activities reside down there. A basement really can be quite useful, especially in areas with cold winters where heating the garage enough to do projects is tough.

I'd love to have your three car garage!

Is your additional 400 sf on the second level above the garage?

Good luck with the open house tommorrow!