General Area in Milford>Question Details

Paul Fabula, Home Buyer in Naugatuck, CT

Are seller's being unreasonable?

Asked by Paul Fabula, Naugatuck, CT Fri Mar 23, 2012

I recently viewed a home listed at $370,000. After my walk through I thought a fair offer was $225,000 as the house was in bad shape and had zero updates. Even the comps we were given were sold at prices around $250-275k and they were in much nicer shape with plenty of updates.

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Ken D'Ademo, GRI,CDPE’s answer
Sellers who want to list their home for more than what the comparables have sold for are not always unreasonable but are probably upside down. It is the job of the Agent to lay out the facts and figures to the seller prior to listing the property. If the seller is not willing to list the property based on that information the Agent has two options, recommend that the seller get an appraisal done to determine appraised value and list for that price or wish the seller the best of luck in selling their home. The agent needs to prove to a buyers agent and a potential buyer that the home is worth what the asking price is, otherwise he/she are wasting their time and money on the listing. The sellers will find an agent to list their property at their price, there are always new agents out there who will take an overpriced listing, figuring that they will get a price reduction later. There are also some seasoned agents who will do that too. When the property does not sell, the seller has lost time, and then wishes they had listed with the agent who walked away. The problem is, when a home does not sell within a certain timeframe, the seller has missed the market and then will be doing price reductions in hopes of catching up. The longer the property is on the market it becomes stale and the offers that do come in will probably be way below what it should sell for. The buyers thought is that this property has been on the market for X months, the sellers must be getting desperate and proceed to put in a lowball offer. So bottom line is hire a REALTOR, (not all agents are REALTORS) for sellers use the data and price accordingly, for buyers, use the data and bid accordingly, and let the seller prove their price. But buyers be aware that an overpriced property may require that you walk away. Lastly, sellers with overpriced listings,in the end, have to deal with the buyers lenders appraisal, and may be shocked to find out the value is not there, and may lose the buyer.
1 vote Thank Flag Link Sat Mar 24, 2012
Hi, honestly, if you are not represented by a REALTOR, you need to hire one. I read your comment to Carolyns response. A REALTOR should do all that work for you and present that to you, meanwhile, your REALTOR can negotiate on your behalf, and it costs you nothing. I am also licensed in CT and am associated with William Raveis, and also know the Milford market. The data that is available to the general public is NOT the same data used by REALTOR's. Sold properties don't show up in real time on most of the sites that have sold data, where the Mulitple listing service has up to the minute data that a REALTOR can provide to you. That gives you negotiating power, and not just taking a shot in the dark. Going in with hard facts, and real data cannot be argued. The worse thing can is that happens the seller says no, or gives a counter offer. So honestly hire a REALTOR, if you are looking in Milford, and would like a referral just let me know. Best of Luck...
Flag Sat Mar 24, 2012
Great answer
Flag Sat Mar 24, 2012
Forget the list price. If the comps were $250,000-$275,000 for houses "in much nicer shape and with plenty of updates" and you offered $225,000, that sounds like a reasonable offer. Yes, the sellers are being unreasonable. But it's a free country. They're allowed to be unreasonable.

If you want, you can always make another offer. Be careful, though, not to come in higher than the appraisal's likely to be. If the comps are in the range you described for better houses, it'd be unlikely for an appraisal to come in at, say, $295,000. So, go up if you want. Just be careful.

Your Realtor can provide more advice.

Hope that helps.
0 votes Thank Flag Link Sat Mar 24, 2012
Great answer. Our realtor agreed that it was unlikely the house would appraise over 300k. I still am intrigued at how they paid 150k about 15 years ago, have no mortgage, Put nothing more then a few minor repairs into their home and now feel it's worth 370k.
Actually putting an offer on a similar house 2 blocks away but this is a 4 bedroom and 600 less SqFt but asking price is 299k
Flag Sat Mar 24, 2012
Don Tepper, Real Estate Pro in Fairfax, VA
buy a differnt house. there are a lot out there'
0 votes Thank Flag Link Sat Mar 24, 2012
My thought is you have to start the process of making a offer sometime. You can always start low and move up, it could be you have to counter a few times till boths sides meet. I tell people to make a offer and see where it goes.

Peter Plourde
William Raveis Real Estate
0 votes Thank Flag Link Sat Mar 24, 2012
Made an offer with a letter explaining our offer. Flat out rejected it, no counter
Flag Sat Mar 24, 2012
I have two questions..was your agent from the area and did they know the specific neighborhoods? Were the comps in the same neighborhood? In Milford you can drive a half mile and prices can jump or decline drastically. If it was the cheapest home in an upscale area the answer is it could be a great buy. If the reverse were true than not. If your not working with an area specialist then you could be doing youself a disservice. Generally homes that are priced right in this area sell very fast. But the difference in List to Sell ratio is within 96% of the selling price.

My recommendation is use an agent who sells at least 20 homes in the area a year. They will know what to show you and what prices are fair asking offers.

Wm Raves
Top Producer
Sales VP
0 votes Thank Flag Link Sat Mar 24, 2012
My agent wasn't from Milford but we had a senior agent who has plenty of experience look at the property, they agreed with my assesment. I didn't just walk into the home and say I think this is what it's worth. I did 2 days of research, spreadsheets and listed out every update other homes in the area had that this didn't and sent all that info with my offer to the seller. It's in close to Woodmont so there are some homes selling for over 350k but this house was in very poor shape. It is not the cheapest house in the area and a much nicer house just came on the market for $60,000 less so I am going to take a look at this one
Flag Sat Mar 24, 2012
If you found that the house is WORTH $250-$275; why would you think that $225 was good?
Are you trying to make the pendulum swing all the way back?
Do you think that the Seller will actually respond?

When the Seller receives enought $275 offers, they will either get reasonable, or they won't.
In the meantime, you should be looking for another house.
0 votes Thank Flag Link Sat Mar 24, 2012
If you bid at your max you have no room to negotiate
Flag Sat Mar 24, 2012
Either their asking price is unreasonable or the offer was unreasonable. Home sthat are priced at or under market value are selling quite quickly, those overpriced are taking their sweet time. Somne sellers owe more than their houses are worth, they are not unreasonable, just stuck. You need to get somne true comps and base your offer on what the market value of the house is. unfortanately if it is priced too high you have no choice but to move on as teh seller can not come down.
0 votes Thank Flag Link Sat Mar 24, 2012
Avg comp for that home was 280k. no idea how they came up with a 370k asking price. This house was in very bad shape compared to the comps. I am no longer interested in buying just interested in what made them list so high
Flag Sat Mar 24, 2012
I work with both buyers and sellers, all of them are just people. Neither group seems more unreasonable to me than the other. I don’t see any difference in pricing a home above the market value or making an offer below it. Just a different facet of the same gem. The nice thing about our system, neither side is forced to do anything, find another home, good luck,
0 votes Thank Flag Link Sat Mar 24, 2012
I can see where a 40% low offer would, and did, offend the sellers. Buyers often feel the price should be drastically lower and sellers often feel they have it priced perfectly. An agent must have also thought it was price close or they are just wasting their time listing it for $370k. Buyers often see what they want to see and justify it the way they want to and sellers can say no or just ignore the offer in total. Even a cash offer would not justify a 40% reduction. Just walk away and find something else, you two will never come to an agreement.
0 votes Thank Flag Link Sat Mar 24, 2012
Was your offer cash, was it "as-is" what do you feel was attractive about your offer that might have got the Seller to resppnd. My guess is your analysis of the price is off . Are you working with an expereiced buyer broker and if so what did they advise?

You had your opinion of value and the Sellers had thiers. When you make an offer that's basically 60 cents on the dollar why are you surprised you got no response. It's possible the Seller's price is ridiculous, but if that's the case and you know this, then why would you be surprised at the response (or lack there of) that you received.

If you really want this property and it's unique which you've suggested it is because of having five bedrooms, then you need to be prepared to neogtiate. Negotiation is neither side getting what they want, with both sides giving and hopefully at the end of the day being able to honestly say, "I didn't get everything I wanted, neither did they, but it's fair and I can live with it." Throwing out a low ball offer in an aggresive manner is not likely to get a negotiation going. Perhaps a more nuanced approach would bear better results.
0 votes Thank Flag Link Sat Mar 24, 2012
Also yes it was a cash as is offer with zero concessions. We were even open to close on their terms.
Flag Sat Mar 24, 2012
We took into account the updates the house was lacking (central air, energy saving updates, roof etc), other homes including the comps they used for pricing had new roofs siding energy updates, and I wrote a very respectful letter explaing the reasons. Our agent felt the price more accuratly represented the value of the home but he said their agent became rude and unprofessional when he turned it in.
Essentially they felt their price was justifed because the had more SqFt then other homes.
I would rather not get the house then pay over 300k for a home that needs a roof, siding, deck repair, windows etc. Over 100k worth of work to have what other homes in the area had that were selling for at best 320k.

I just know in a year this house will have not sold and will be at the price I would have paid but I will already have bought.
Flag Sat Mar 24, 2012
We did make an offer but they didnt even bother with a counter just rejected us. It was a bit frustrating as the home was a rare 5 bedroom and I was willing to pay a bit more and do the updates myself.

What is odd about this area of town is the average intial listing price is 440k and the average final sale price is 265k. With most homes being on the market over a year. Only in this one area of town tho, not even the most desierable place in town,

What would make a whole section of a town go so high when trying to sell their homes? This home was bought 14 years ago for 150k so they werent losing money, they had nothing invested in the home except for a water heater (admitted by their agent)

At this point I am just curious.
0 votes Thank Flag Link Sat Mar 24, 2012
I agree with Gerard statement. If it's not for you, walk away.
0 votes Thank Flag Link Sat Mar 24, 2012
not all sellers are being unreasonable, some however can be or are. Comps from you Realtor will tell you what the average price is, if the home is not close, then make what you and your Realtor think is a reasonable offer. If they don't bend then the home is not for you, walk away and start looking at other homes.
0 votes Thank Flag Link Fri Mar 23, 2012
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