Home Buying in Lawrenceville>Question Details

Jp, Home Buyer in Georgia

Can a counter offer from the seller come back higher than the listing price?

Asked by Jp, Georgia Thu Jul 3, 2008

I put an offer on a house in GA on Monday evening after going to see it twice the same weekend. The home is in great shape & a foreclosure. We saw no other agents cards on the counter all weekend and no traffic in the subdivision to indicate anyone was even looking at any of the 7 houses listed for sale in the subdivision. The house has no appliances and there was a plumbing issue before the bank took it over. I put an offer in for 18k less than the asking price and on Thursday evening the bank countered for 10k more than the listing price. My agent says they have multiple offers and to go in with our best and highest offer as well as continue to shop so as not to lose our momentum. Isn't a counter offer for 10k more than the listing price false advertising? How can they list it for one price and counter for more than the listing? Is there some place to go to complain about this or investigate this? This is my first home and offer & has been a HORRIBLE experience.

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7
Jp -
This is all great advice form some knowledgeable agents. The only things that I have to add are that:

1) Business cards are not really a good indicator of the number of showings. I don't leave business cards in foreclosures, as I know that generally no one from the bank or the listing agents side will be by to pick them up.

2) Everyone here continues to reference the list price, but the LIST price is truly an arbitrary number. You and your agent should really focus on the VALUE of the home which in this case would be the price you would pay for it, plus the repairs needed to make it liveable - relative to other recent sales in the neighborhood.

You should also be sure that you are clear with your lender (if there is one) about the condition of the property. Some appraisals will require that the property be in liveable condition which may include at least basic appliances and sometimes more.

Your agent's advice is good. You should be prepared to offer YOUR highest and best without feeling bullied by the bank - and be prepared to move on if that doesn't work out.

Best of luck to you!
Web Reference: http://www.leeadkins.net
1 vote Thank Flag Link Fri Jul 4, 2008
This has become very common with Corporately Owned homes.

In a seller's market this happens all the time, but in Georgia it's rare. What has happened is that the price has likely gotten to the point that everyone is a buyer. Your agent is giving you good advice.

Many of my buyers are deciding that Short Sales and Foreclosures are not for them, for this very reason.
0 votes Thank Flag Link Sat Jul 5, 2008
Joshua Jarvis, Real Estate Pro in Duluth, GA
MVP'08
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Yes, it can come back higher than list price and your agent's advice sounds right on the money. Often you won't even get a counter offer. If you believe the bank doesn't have the other offers as it claims, you could hold firm at your original offer, but are you prepared to walk away? In my experience, I've never seen a bank or bank's agent playing those type of games. Believe it or not, they actually do want to sell that house.

Buying a foreclosure homes was, not too long ago, mostly left to experienced "thick skinned" investors. Now, about half of home sales (in Las Vegas) are foreclosures or short sales and I do sympathize with you and many other buyers looking to purchase a primary residence. You may want to only look at "normal" resale homes instead of foreclosures. Many first time home buyers also feel overwhelmed with the amount of repairs and cleanup required on some the foreclosure homes as well.

The banks are pricing homes at prices that are low enough to get multiple offers within the first week or two. Have you ever been shopping on the day after Thanksgiving? I think they call it black friday? People line up and camp out the night before in the freezing cold to be the first in line for the best deals. Some people wait in line for hours, but still don't get the special sale price on the item they wanted most...ehh not a perfect analogy, but what I'm trying to say is that if you're looking at bank owned homes vs non bank owned because the bank owned homes are priced WAY lower, you've got to expect a whole different experience.
0 votes Thank Flag Link Thu Jul 3, 2008
BTW, I have had counter offers on the last 4 foreclosures that my clients put offers in on.
Web Reference: http://www.torilawson.com
0 votes Thank Flag Link Thu Jul 3, 2008
Hello JP,
It can be sometimes be difficult (Frustration wise- were you prepared for this?) to buy a home and if it is truly a great home and awesome price, chances are many others will think so as well alot of times and multiple offers will go in which will start to increase the listing price, consider it like a paperwork auction of sorts. Your agent should have all the info (multiple offer situation, etc) they can prior to submitting offer (this is not always possible), but yes indeed many homes sell for more than the list price. I am sorry this has been a horrible experience, I hope it works out for you. Best of luck.
Web Reference: http://www.torilawson.com
0 votes Thank Flag Link Thu Jul 3, 2008
I agree w/ Vicky. I generally am not used to banks coming back w/ a counter. I have seen many bank owned properties sell for over list price. The often employed strategy is to price low and generate mulitple offers. What is common is for the bank to ask all bidders to put forth their final and best when there are mulitple offers.

There is nothing unethical about prospective buyers bidding a price up. It is no more unethical for the bank (or any seller) to get more than list price for the property than it is for a buyer to get a property for under the listed price. The pendelum swings both ways, and it simply depends upon the asking price, comps and willing buyers for the property. Sellers will seek the highest the market can bring them. Sometimes that means more than list; sometimes it means less.
0 votes Thank Flag Link Thu Jul 3, 2008
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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trying to buy or sell in this market is not fun. but, no there are no ethical issues here. quite honestly, i have not heard of a bank countering. they usually make you bid against yourself, and buyers complain about that. Very commonly prices are escalating above list price. You can try an escalation addendum - some banks will consider those. If they countered you, it must be that yours is the best constructed offer, but not at the price it needs to be to win the bid. Apparently, they'd like to sell to you. Do you want to buy it?

If you want to read a crazy feed on this, read below. You'll soon pick up that "acer" is a conspiracy buff - but lots of professionals (even ones I normally disagree with) AND buyers will tell you this is common place.

Heck, in the past couple months I had one CASH buyer who never bid less than asking price, could close in 2 weeks with no contingencies... and HE WAS BID OUT, a couple of times. I assume you're a more normal buyer w/financing contingencies and the like?

GOOD LUCK, hang in there - it will be worth it, I promise
0 votes Thank Flag Link Thu Jul 3, 2008
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