When a seller receives your offer, he can do one of three things: 1. Accept your offer as written, 2. Reject your offer, or 3. Submit a counter offer. (I guess #4 would be to ignore your offer all together which happens).
In most cases, a counter at full price happens when a seller responds to a very low offer (is this you?). A seller's typical emotional reaction to a very low offer is to simply reject it "since the buyer obviously isn't serious". Even though the most sellers are willing to reduce their asking price, they don't want to make early concessions for initial low ball offers.
In this situation, an experienced listing agent will often advise the seller to counter the offer at full price -- this is a good thing for the buyer. This tells the buyer that they seller is willing to work with the buyer, but they'll only start serious negotiations once the buyer starts with a more realistic purchase price.
The challenge in this market is to have both parties feel like they have arrived at a 'fair price' for the home. Your agent should provide recent comparable sales that support your offer. If you've simply thrown over a low offer with no supporting data, then your position is pretty week. Of course, the seller that is really desperate and motivated may respond to anything. In this case, your seller is likely telling you that they are not desperate and will only engage you once *you* become more realistic.
Of course, your seller could be the nutty, unrealistic one -- that happens too! Good luck with your purchase.
That's a pretty important missing piece of information. If they, truly, have three other offers coming (and personally, I think it's foolish to wait for an upcoming offer, and ignore the bird-in-hand) that changes the whole dynamic.
Think through the scenario, if one of the other offers actually materializes and buys the house from under you for $595,000. If you're okay with that, and you're happy with your bid, then just sit and wait.
If it would bother you to lose the house for $10,000 - $15,000 ($60.00 - $75.00 / month on a mortgage), then you need to reconsider your offer. Only you can determine if you want to get into an auction type situation, if those other offers materialize.
If they don't... then you'll be in a stronger position.
Decide for yourself. The agent gets paid on the sale of the property. Many agents want to make the higher commission and some agents don't like to negotiate. Most are honest, but not all are aggressive.
At this point, if you truly love the house and it meets your needs and the comps (as you say) show it's FAIRLY PRICED, either offer to split the difference with the owner or come up to 599. Otherwise, walk. But the problem is in some cases like this, buyers tend to remember the one they didn't get and try to find another one just like it, which sometimes never happens.
I agree that a $580,000 offer on a $599,500 asking price is definitely not a low-ball offer. With 50% down, you sound like grade-A rock solid buyers.
Have your agent take a look at the available inventory for similar homes (see below). Right now, this varies wildly depending on where you are in MoCo. If your home is an area with 12+ months inventory, then it's a strong buyer's market. The odds of another offer coming in at list price is greatly reduced in this scenario. However, if you see 3-4 months inventory (or less), then you may need to come up in price. The listing agent may be right to wait.
I just helped a buyer negotiate a great deal on a home that has 2 years' worth of available inventory. When the listing agent told me that another buyer was really interested, we said "fine -- let them buy it". Even if another offer came in (it didn't), we had others to consider. For another buyer looking in Potomac under $800K, it's been a strong seller's market since May. Multiple offers are being made and sales prices are often over asking price. It's strange to see, but it's happening. We're prepared to write a full price offer in this case.
For your situation, you may stick to your guns and wait out the seller, but be prepared to loose the home if it's in a newly hot area. Good luck.
** To calculate available inventory, first count the number of active comparable homes; second - divide this by by the number of comparable homes that have gone under contract in 2008; third - multiply by 6. Example - 20 comparable homes are currently on the market. 5 have gone under contract in 2008. The inventory would be 20 divided by 5 times 6 (since this covers 6 months) = 24 months inventory. In other words, it would take 24 months to sell available homes at the current rate of buying activity.
Thank you everyone for your replies. Here is some more background.
The current list price is $599,500 (dropped from a very unrealistic $629,500 to $612,500 to here over the course of 70 or so days) and we offered $580,000. I don't think it was low ball by any means.
We are very "good" buyers - over 50% down payment, high earnest money deposit, few contingencies. If the house is fairly priced at $599,500, we're struggling with the pre-conceived (and I realize it doesn't always apply) notion that one won't pay full asking price in a buyer's market.
Our agent have provided us with some comps with more on the way. It makes it look like it is fairly priced. But, see the above pre-concieved notion that is hanging us up. We're also put off by the buyers not giving. Well, they countered at full current list price, they'll replace 5 windows with broken seals (we don't want this done b/c we want to handle how it is done and pick the windows), and they want to close earlier than we do (they're currently paying a double mortgage but we're going to be out of town when they want to close and are worried about owning a house that will sit empty and un-watched for 2 weeks).
Thanks again for all the input!
The last thing is this...the bottom line decision is made by buyer...one must decide these criteria. Likeability, desireability, neighborhood, schools, ammenities....once you decide on these...then if the price is good then buy if not go find other one.
Sorry about the confusing math on calculating inventory. Measuring available inventory in an area is the best way to gauge the health of the real estate market. It's simply a measure of the homes available compared to the number of recent sales. Your agent can calculate this for you. Bottom-line: If homes in your area of interest area are selling quickly, then may be in a rising market (very possible) and you will likely have to come up in price to acquire the home. If homes are sitting -- e.g., inventory is very high -- then you are in a better position to wait the seller out and negotiate a lower price.
Last question -- Are there other homes in the area that would easily meet your needs? If you have very specific, hard-to-find needs that are met by this home, then you may be best served to come up closer to the seller's price. You're only off by 3%. $20K isn't much to spend if the home really, really works for you.
The property has not been on the market all that long (though most sellers would think it has), and true desperation may not yet have set in.
Ask your agent to evaluate the highest value for the property, and decide whether or not to come in at the current offering price based on that value.