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You're in the wrong place son.Clearly my answer was for someone who may have a conscience.What? This is a business transaction. It's entirely possible the market was overly inflated 9 years ago and the true value now is less than it was. Even if not, this probably isn't some 90 year old senile woman going it alone he's taking advantage of. We bought land over a year ago that had been on the market for just less than a year. He was selling two adjacent parcels (he was originally selling 4, but 2 sold previously). He wanted $85k for both or $45k separately. We offered $50k for both and he took it almost immediately, leaving me to believe we could have gone lower. This is within the range of other similar lots in the area at the time, which is the key. But of course the guy wasn't living on this land and his agent stated that he needed the money to help his son.People who want to be happy in their new home do not make a deal that doesn't leave them with a clear conscience. Otis can decide for himself whether he wants to be able to sleep at night.Since when is buying a home about being NICE? If he doesn't like the offer, he doesn't have to accept it.The guy is already hurting from a divorce and you guys want to kick him in the balls with an offer BELOW his purchase price from 8-9 years ago? That is not very nice.
A lot depends on how long it has been on the market, and how desperate he is to sell. I lowballed an offer 7 years ago, offering 25% less. We finally settled on about 10% less than the listing, but it had been on the market for 134 days.
This is what I don't quite get. Assuming everyone in town is assessed at an equal portion of the current market value, what difference does it make if it's 70%, 100% or 200%? (ETA: obviously 200% would draw protests, but why 70%?)
You're right, corporations tend to be more logical and predictable. Individuals, far less so.In this market, many people are lucky to break even on what they currently owe, they're not necessarily expecting to turn a profit from the original purchase price. I would use the original purchase price as data in your analysis, but don't necessarily assume that this is the lowest number that he'll accept (although in his case, 8-9 years is before the huge ramp up, so this may be a fair starting point). 5 months on the market is definitely stale and traffic has probably been reduced to almost zero. If he dropped the price once 4 months ago, it may be time to drop it again.Kind of figured this would be the ultimate answer, but I was just wondering if there was something common in the industry. My old man hasn't bought a home in years, but his view is that in most transactions, you can expect to get about 10% off an asking price. Obviously there are a million variables, but that's his very rough rule of thumb. It's funny to me because I get that when we're talking about certain transactions, but if you're looking at homes in the NYC suburbs with prices climbing near and well beyond $1M, I find it strange to consider a six figure sum a "discount."In my particular situation, the seller's agent informed us that the seller is "anxious" -- we have the impression that something happened with the family, perhaps a divorce or the like, and that the father just wants to sell the house and get out as soon as he can. It looks like his wife may no longer be living there. Through public records I know what he paid for it 8-9 years ago, and even if we cut more than 10% off his asking price, he'll still make a (small) profit. I figure in this real estate market, if you can get out with any profit, you are probably happy.All depends on the situation. Could be any reason for moving: need the money, moving for work and work will pay the bills (so they have some leverage in the sale), want to upgrade, etc.
Some people get insulted if you start too low and don't want to work with you again, some understand its part of the business.
Make sure your agent does his/her homework on the property and trust their opinion
We're looking to make an offer that's even beyond a 10% discount with the hopes that we can get a deal done at round the 10% off range. Maybe wishful thinking, and I frankly think that would be a steal for this house, but I'm no expert, and like you guys said, it's worth whatever he is willing to sell it for, end of story.
These negotiations are so interesting to me. Working in litigation I've negotiated big dollar settlements/licenses plenty of times, but it's just a totally different dynamic when you're dealing with real people (not corporations) and their own money. Of course, plenty of the same rules of the game still apply. But the game is definitely an interesting one...
I'm not exactly sure either. I'll have to see if other property taxes (i.e. automobile) are 70% of market.Otherwise, for all I know, it may be just a way to fool voters into thinking that they're not being taxed on every last $ of their property.
Do others agree with this?
Interestingly, 8% off seems reasonable by another measure I made too.I just looked at a bunch of local comparable sales from last year, averaged the selling price per square foot, and applied it to the size of this house. I end up with something that is about 8% less than his current asking price.
20% off "feels" just too low to me. I think the right selling price is 8-10% off, but I could see him holding out for more. With that in mind, I'm not totally embarrassed going in around 15% off. 15% off feels like the lowest possible but still reasonable lowball value, and, trying to see it from the seller's perspective, it's still above what the guy paid for it 8 years ago.
House is on Long Island in Nassau County, near a good train line on the LIRR.We own in Brooklyn now. We will likely keep this condo and rent it out. I lived in various apartments in Manhattan previously. With a kid on the way, and both of us more or less tired of Brooklyn, we've decided it's off to the burbs. Doesn't have to be immediate -- we can wait a year or even two, and as we do, our down payment ability will increase and expand our range of houses. So we're in no rush. But we just have a good gut feel about this particular house. (If we don't get it, we probably won't bother looking further at this point)
This.You're in the wrong place son.Clearly my answer was for someone who may have a conscience.What? This is a business transaction. It's entirely possible the market was overly inflated 9 years ago and the true value now is less than it was. Even if not, this probably isn't some 90 year old senile woman going it alone he's taking advantage of. We bought land over a year ago that had been on the market for just less than a year. He was selling two adjacent parcels (he was originally selling 4, but 2 sold previously). He wanted $85k for both or $45k separately. We offered $50k for both and he took it almost immediately, leaving me to believe we could have gone lower. This is within the range of other similar lots in the area at the time, which is the key. But of course the guy wasn't living on this land and his agent stated that he needed the money to help his son.People who want to be happy in their new home do not make a deal that doesn't leave them with a clear conscience. Otis can decide for himself whether he wants to be able to sleep at night.
This analysis makes sense to me. The more I'm looking at various data, the more it is suggesting to me that a 15% discount may be the right opening salvo, with a highest price at around 8% off.You're right, corporations tend to be more logical and predictable. Individuals, far less so.In this market, many people are lucky to break even on what they currently owe, they're not necessarily expecting to turn a profit from the original purchase price. I would use the original purchase price as data in your analysis, but don't necessarily assume that this is the lowest number that he'll accept (although in his case, 8-9 years is before the huge ramp up, so this may be a fair starting point). 5 months on the market is definitely stale and traffic has probably been reduced to almost zero. If he dropped the price once 4 months ago, it may be time to drop it again.Kind of figured this would be the ultimate answer, but I was just wondering if there was something common in the industry. My old man hasn't bought a home in years, but his view is that in most transactions, you can expect to get about 10% off an asking price. Obviously there are a million variables, but that's his very rough rule of thumb. It's funny to me because I get that when we're talking about certain transactions, but if you're looking at homes in the NYC suburbs with prices climbing near and well beyond $1M, I find it strange to consider a six figure sum a "discount."In my particular situation, the seller's agent informed us that the seller is "anxious" -- we have the impression that something happened with the family, perhaps a divorce or the like, and that the father just wants to sell the house and get out as soon as he can. It looks like his wife may no longer be living there. Through public records I know what he paid for it 8-9 years ago, and even if we cut more than 10% off his asking price, he'll still make a (small) profit. I figure in this real estate market, if you can get out with any profit, you are probably happy.All depends on the situation. Could be any reason for moving: need the money, moving for work and work will pay the bills (so they have some leverage in the sale), want to upgrade, etc.
Some people get insulted if you start too low and don't want to work with you again, some understand its part of the business.
Make sure your agent does his/her homework on the property and trust their opinion
We're looking to make an offer that's even beyond a 10% discount with the hopes that we can get a deal done at round the 10% off range. Maybe wishful thinking, and I frankly think that would be a steal for this house, but I'm no expert, and like you guys said, it's worth whatever he is willing to sell it for, end of story.
These negotiations are so interesting to me. Working in litigation I've negotiated big dollar settlements/licenses plenty of times, but it's just a totally different dynamic when you're dealing with real people (not corporations) and their own money. Of course, plenty of the same rules of the game still apply. But the game is definitely an interesting one...
I think most sellers, especially in this market (your market may vary), are not expecting to sell at list, so your father is right that you should expect some kind of discount. An offer 10% below list should not get you thrown out of future negotiations, but the trouble with pre-determining a number as a percentage of sell price is that you may leave money on the table. So while you can probably expect to negotiate from a discount to the list price, is 10% enough?
It's nice to have a brain AND a conscience. But don't feel terrible, one out of two ain't bad.Clearly my answer was for someone who may have a conscience.What? This is a business transaction. It's entirely possible the market was overly inflated 9 years ago and the true value now is less than it was. Even if not, this probably isn't some 90 year old senile woman going it alone he's taking advantage of. We bought land over a year ago that had been on the market for just less than a year. He was selling two adjacent parcels (he was originally selling 4, but 2 sold previously). He wanted $85k for both or $45k separately. We offered $50k for both and he took it almost immediately, leaving me to believe we could have gone lower. This is within the range of other similar lots in the area at the time, which is the key. But of course the guy wasn't living on this land and his agent stated that he needed the money to help his son.People who want to be happy in their new home do not make a deal that doesn't leave them with a clear conscience. Otis can decide for himself whether he wants to be able to sleep at night.Since when is buying a home about being NICE? If he doesn't like the offer, he doesn't have to accept it.The guy is already hurting from a divorce and you guys want to kick him in the balls with an offer BELOW his purchase price from 8-9 years ago? That is not very nice.
A lot depends on how long it has been on the market, and how desperate he is to sell. I lowballed an offer 7 years ago, offering 25% less. We finally settled on about 10% less than the listing, but it had been on the market for 134 days.
Let me know.Everybody (in real-estate) I've been talking to is saying that owners are holding on to things until the market corrects a bit. We've been seeing things (in fact- just looked at some great apts in LIC) on the rental market by owners of Condos that are trying to make the most of the down market.Where are you guys looking?
Is the words of James T. Kirk...nansy pansy. Odds are you end up in the middle of your original offer and the asking price. So if you want it for 8% off, go for 16% off initial offer.
I voted 15% earlier (haven't seen the house and can't math so it was just a wild guess). Sounds like you'd be happy if you end up taking 10% off.
Way to pull a Woz and make it about you. That, or do a one time firm offer at $390k. They'll sit on it a week and beg you to take it at 395-400k. Just depends on how long you want to play the game. You know they are already tired of it, so you just have to outlast them.
PS...don't tell your Realtor you are will to pay 8% off. That kind of info tends to leak out when Realtors have private discussions. Your position is suppose to be confidential, but Realtors are more interested in making the deal work.
Agree and thanks. Relayed to her the offer of about 12 percent below asking. She said it was low and asked if we would be willing to hear a counter. I said maybe, but ony if he came down very significantly. I also justified the offer based on comparables and the price they paid for it 8 years ago. We'll see. We would be thrilled getting in anywhere near our offer. His counter will be a huge message -- I doubt he will accept, but if he moves a lot we could have a deal. If he moves just a little it won't happen.
I will shank you in the liver when I see you again
You should easily get this at 9-10% below. 9% is basically splitting the difference between the last 2 offers.
yeah, just sit on it. If there's no activity just wait it out.
The guy may be more willing to negotiate when $$$ from the Jets game doesn't come through.You should easily get this at 9-10% below. 9% is basically splitting the difference between the last 2 offers.
Fair point.
Seller has the house on the market for a while and should know exactly how low he is willing to go even before hearing the offer. Chances are, the broker told him that Mr and Mrs Otis have a baby coming and are "anxious" to move into a new house soon.
Actually, it wouldn't surprise me if broker were trying to connect the dots. She knows what our range is generally and knows we can add on to our current offer. She may well have relayed that to him, and this may be his move to get us up to that range. Really hard to say. Once we make our move up, we'll be within 40k of his counter. If he wants to walk away from it and let it sit on the market for another six months, his call.
Thx GB
Sounds silly for him to let the deal go for 40k.Actually, it wouldn't surprise me if broker were trying to connect the dots. She knows what our range is generally and knows we can add on to our current offer. She may well have relayed that to him, and this may be his move to get us up to that range. Really hard to say. Once we make our move up, we'll be within 40k of his counter. If he wants to walk away from it and let it sit on the market for another six months, his call.
Unfortunately, he might not be buying from Chet. 40k is a lot for the rest of us.Sounds silly for him to let the deal go for 40k.Actually, it wouldn't surprise me if broker were trying to connect the dots. She knows what our range is generally and knows we can add on to our current offer. She may well have relayed that to him, and this may be his move to get us up to that range. Really hard to say. Once we make our move up, we'll be within 40k of his counter. If he wants to walk away from it and let it sit on the market for another six months, his call.
What I meant was market condition plays to Otis' favor. The seller won't be sure that prices won't drop further and it's possible that the offer he gets later can be even lower.Unfortunately, he might not be buying from Chet. 40k is a lot for the rest of us.Sounds silly for him to let the deal go for 40k.Actually, it wouldn't surprise me if broker were trying to connect the dots. She knows what our range is generally and knows we can add on to our current offer. She may well have relayed that to him, and this may be his move to get us up to that range. Really hard to say. Once we make our move up, we'll be within 40k of his counter. If he wants to walk away from it and let it sit on the market for another six months, his call.
I was really only trying to get a Chet joke in this thread.
An agent would be borderline incompetent to let a house sit on the market for that long. 90 days tops - pull it and relist.
Well it goes on everywhere and I think BobbyL is spot on. Interesting thing happened to me when I bought my cabin. We went to look at it and it was the first time it had been shown all summer. I thought their asking price was too high based on the other places in the area we saw, and our agent thought the same thing. Two days later they dropped the asking price 7% or so. We had already decided to see this place again as one of our finalists, but I kind of knew when they dropped the price that I wasn't going to have to negotiate much if I made them the right offer. I ended up getting the place for 26% of their original asking price and 20% off their reduced price with no counter offer. Now when I looked at houses in Maryland last month I saw quite a few that had been listed for 180-270 days that had no price reductions. Now Maryland is a fairly stable market compared to the rest of the country, but there are also a ton of people upside-down on their loans. This is a reason not to budge on your original price and in fact my agent told me he has seen a lot of sellers refuse to budge on their set price because that is already the minimum they'll take for the house minus market discount (5-6%). According to him many will pull but re-list at the same price they did before. It's a buyer's market, even in areas that haven't been slaughtered by the housing crisis.
It's a buyers market in the sense that it's really hard to get a loan these days. It's really trimmed the number of eligible buyers down even if they are interested.
Yeah, we've seen enough homes to know how much bang for the buck we are getting in this house. I really do think it is a good deal if we get it near our bottom line highest offer, but I also don't think it's highway robbery of the seller in this market. I think today I am going to go back and make a final offer and see if they bite. We would be moving up 30k, which is 40k less than their current counter, but also 50k more than they paid for the house 8 years ago. The house has been on the market for 6 months -- nobody is rushing out to buy it, particularly in the dead of winter. I've also explained to the broker that we are not selling our apartment even if we move and we are in no rush -- we were planning to wait a year to buy a house anyway, so we can take this or leave this. We'll see. It may be that they will refuse to go any lower, in which case we'll sit tight and see what the market looks like in a year. We potentially miss out on locking in a good sub-5% mortgage rate, but we'll have a lot more money then, could increase the price we can pay on a down payment pretty dramatically, and maybe find something we love even more. And hell, lots of people are talking doomsday scenarios about the real estate market,and projecting a nasty double dip before a slow recovery. So maybe a year from know will be the best time of all to buy. If only we had a crystal ball...
Then why are you in such a hurry to close this deal? I don't think anyone thinks real estate goes up except if mort. rates start to get closer to 6% and even then that will be short lived.
It really isn't worth either realtor's time to haggle over a few thousand. Say it is a 5% commission split between the two of them. For every $10K it is only $250 for each agent. And on this particular place if they're splitting a $50K commission do you really think they care about getting an extra $1-2K? They'd rather get the place sold especially if the place has been on the market for 10 months.
Not in a hurry to close it at all. Just wondering if we can get a deal done or not. If the price is right, and we're looking to stay in the house long term, I'm not worried about the risk of another downturn in the market -- hopefully we're happy enough there to stay until I'm in a grave. Of course, there is the possibility that the market goes up (it seems to be strengthening every so slightly at least here in the NY metro area). Also, I think we have a window of opportunity here in the dead of winter -- as the housing season comes back in the Spring, I would suspect lots more people will be looking, and there may be more interested buyers and a greater potential of others bidding more. So the winter seems like a decent window for a buyer to have even more power. Is that just the case here in NYC? From what I understand in the colder climates real estate is very seasonal. I suspect that maybe you don't have that issue in LA etc.
Went back with our counter this afternoon which I explained was really the best we can do (absent waiting a few months). Agent said she didn't think it was going to cut it, but that she understood that it is all we can really afford to do at this point. Given that we didn't hear quickly, it could be that they are considering it, who knows.
