Home Buying in Maryland>Question Details

Frustrated H…, Home Buyer in Maryland

What do you do if a house you want to buy is listed 60,000 above the comps and the seller will not lower the price?

Asked by Frustrated Home Buyer, Maryland Mon Dec 5, 2011

A house I want to buy is on the market for 440k and the comps are from 300k - 380k. My realtor spoke to the selling realtor and they said the price would not be negotiated down below 425k. The comp at the high end (380) has an additional acre of land as well as an additional bedroom. Both built in the same year, both have granite, both in the same neighborhood.

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Hi Frustrated,

Find another house. Even if you were willing to overpay, if the house is truly over priced it won't appraise. So unless you are paying cash you wouldn't be able to get a loan. Sounds like this seller is fishing for an uninformed buyer. Don't let it be you!
2 votes Thank Flag Link Mon Dec 5, 2011
If there TRULY are NO justifications for the higher price your choice is easy.
However, there may be tangible assets that represent real value such as geo-thermal heating and cooling, commercial building standard, above code in all aspects, ....of course there may alos exist real, although very irrelevant, constraints on the sellers ability to sell. (they are broke and can not come or are unwilling to come to the closing table with cash to pay off the mortgage).

If this is a community of diversified housing and few annual sales, comps may be difficult to find. Knowing the community value ceiling is really important. You, of course, are aware of the ramifications of owning the most expensive house in the community. These homes, which anchor the value of the community, do not sell very often.

Just a few months ago, a buyer recognized the unique nature of a home I had listed and waived the appraisial contingency and brought $30,000 to the table. You are the only one who knows how important THIS home is to you. Respond accordingly.
Web Reference: http://www.MyDunedin.com
1 vote Thank Flag Link Tue Dec 6, 2011
In this market, you are certainly in the drivers seat. If your agent has presented the reasons as to why your offer is legitimate and serious and they still will not listen...keep moving on. I know it is frustrating, it is probably the house you really wanted but believe me, in the coming year, the wave of homes for sale will increase and you will have plenty to choose from in that price range
1 vote Thank Flag Link Mon Dec 5, 2011
I echo the other two agents. For a sale to happen a buyer & seller need to agree on all of the terms conditions of the contract. The seller is 10-15% over the market value and not willing to budge for whatever reason.

If you are financing the purchase the lender wouldn't be able to approve the loan due to the appraisal anyway. You'll find another property quickly and the subject property wil continue to sit on the market.

Good Luck!
1 vote Thank Flag Link Mon Dec 5, 2011
You should move on. If the seller cannot listen to reason then it will be his loss in the end. I would not waste my time on it any longer as you do not want to over pay in this market. Good luck to you.
1 vote Thank Flag Link Mon Dec 5, 2011
You can wait it out, or,
You can move on.

They are not listening to reason,
and you are stressing over it.

Good luck and may God bless
1 vote Thank Flag Link Mon Dec 5, 2011
There are way to many homes in this market to pay 60K over appraised value. The transaction does not make sense for the buyer on any terms. Emotional attachment sounds to be the deciding factor in this transaction. Walk away...maybe even skip or runnnnnn
0 votes Thank Flag Link Tue Dec 13, 2011
You may want to look for a different house or wait him out. After a long period of time on the market because he can't get a buyer he may be more willing to negotiate.
0 votes Thank Flag Link Tue Dec 6, 2011
If you're a cash buyer, and want to, you could buy the house for the 425k and try to get some decent closing costs thrown in.

You could also have a contingency thrown in for an appraisal. So that when the home doesn't come near agreed purchase price, you can walk away with your deposit back. You may also be able to use it as leverage to lower the price.

If you're a cash buyer and don't want to pay 425k for the house when the nearest comp is 380k you'll have move on.

If you're financing, I don't know of any banks that will issue a loan for a house that overpriced. You can use that as leverage to get the home price lowered, most likely though, you'll be forced to walk away and find a different home.
0 votes Thank Flag Link Mon Dec 5, 2011
Why do you want to buy this house, rather than one that is priced correctly?
0 votes Thank Flag Link Mon Dec 5, 2011
You can submit an contract offer subject to appraisal. Your contract offer should be structured in timing that your home inspection, financing does not begin until until the appraisal contingency is released by you the buyer. This will rquire seperate contract language to be written by your agent. You must accept the worst case
scenario that you can pay for an appraisal and the seller may elect not sell you the home.

There are many houses listed in our market that are just listed and not for sale due to improper pricing.
0 votes Thank Flag Link Mon Dec 5, 2011
My vote would be to move on. If the seller is not willing to accept a price at fair market value, it's not worth your time.

I always tell my sellers that overpricing in this market is like shooting yourself in the foot ( http://www.dwell-denver.com/blog/overpricing-in-this-market-… ) but it sounds like this seller isn't even interested in selling.

Good luck in your search! I know the perfect home will come up!

Lane Walsh
Dwell Denver Real Estate
0 votes Thank Flag Link Mon Dec 5, 2011
A successful real estate transaction required a ready, willing, and able buyer and seller who have come to an agreement on all terms. Unfortunately you don't have that situation. You can't force someone to sell you their home on your terms, no matter how reasonable they may be. If the comps are as you say, the house will likely not sell at all, but that is the seller's choice. There's always another house. Good luck.

Lisa Miller Scott
Sellstate Dominion Realty
0 votes Thank Flag Link Mon Dec 5, 2011
This doesn't require a long response. Time to move on! That big of a difference is monumental to overcome. First of all, it will not appraise but kyou can argue until you're blue in the face but $60k is a huge price drop to ask of anyone no matter how unreasonable their expectations are.
0 votes Thank Flag Link Mon Dec 5, 2011
Couple questions come to mind:

1. Does the seller have an appraisal to support their asking price? Also, you've probably already done this, but just in case: Make sure these comps you are referring to are true comps, including not being distressed sale comps (foreclosure, short sale, etc) which will yield a below market value.
2. Any idea if there is a loan on the property? Could be a situation where the seller is simply unable to lower the price as they don't have the funds to pay the delta of your offer price and pay off the loan to convey clear title to you. Then yes, there's some great advice here to walk from the deal. You can't force a seller to sell for less than their asking price.

If the property is underwater, there are resources that can negotiate a short sale even when the seller is not behind in payments. It's an arduous process that the seller may be unwilling to undergo and would rather wait it out until the values come back up.

If there isn't a loan on the property however, and you absolutely love the house, perhaps a sweet seller financing deal would be something that could be negotiated. Seller can get his asking price but you get some bad-ass terms on the financing that end up being a better deal than what your loan financing could get you. Keep in mind, if you get a 30 year mortgage and see it thru to the end you are paying FAR MORE than $425k overall for the home.

These are just some thoughts as it seems you really want this house. All the best to you!
0 votes Thank Flag Link Mon Dec 5, 2011
Move on to the next home. Assuming your assessment of the situation is correct, a qualified buyer should not bother with an unrealistic seller given today's current real estate environment. There are simply too many other homes to choose from.
0 votes Thank Flag Link Mon Dec 5, 2011
walk away. Call their bluff. If they won't be reasonable and sell the house for what it is truly worth, you won't be losing anything.
0 votes Thank Flag Link Mon Dec 5, 2011
The Sellers have not reached a point to where they understand the value of their property. This can happen with the types of rollercoaster markets we have seen in the last few years.

You may see light at the end of this tunnel if the listing expires and another agent picks it up. If they relist, they may do something with the price.

Good luck!
Web Reference: http://www.lnf.com
0 votes Thank Flag Link Mon Dec 5, 2011
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