Home Buying in Manchester>Question Details

Alexis, Home Buyer in Manchester, NH

I have a agent who says the price asking is the best the seller will accept isn't this crazy? I think

Asked by Alexis, Manchester, NH Fri Feb 27, 2009

offering less is all ways a great start to go the best deal?

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12
Get rid of your "agent", wait a year and get the house 20-30% off.
1 vote Thank Flag Link Fri Feb 27, 2009
First, every seller has different motivations for selling. Some are more serious than others. If its early on in the listing period some sellers can feel confident they can get there price.

Secondly, did you tend the offer with the listing agent or are you represented by a buyer's agent. If it's the listing agent, remember their fiduciary responsibility is to the seller. They are supposed to sell you the sellers house for the best possible price.

Lastly, as an agent I would personally tender all offers to the seller and encourage some sort of counter offer. Maybe they are stubborn sellers or the agent is lazy.... did the offer actually get submitted?
0 votes Thank Flag Link Wed Mar 4, 2009
You need a new real estate agent who truly has your best interests at heart. A real estate agent is ethically obligated to present all offers to its client, no matter how low. Since agents work on commission they all have a vested interest in ensuring the selling price remains as high as possible. The USA is entering uncharted waters based upon the real estate bubble which has now burst. A house will only sell for what the market will bear - which means what a willing buyer and seller agree upon - NOT what their agents decide.
0 votes Thank Flag Link Wed Mar 4, 2009
All offers must be presented to the seller....there are more factors than just price in an offer. Do some investigating to determine motivation...is the seller behind on their taxes for example. Maybe it is actually a short sale.....ask if it is.
0 votes Thank Flag Link Tue Mar 3, 2009
Hi Alexis,

Your question, "I have a agent who says the asking price is the best the seller will accept isn't this crazy? I think offering less is always a great start to go the best deal?"

Everything is negotiable. Buyers are finding that the asking prices vs. the selling prices are still pretty flexible. Sellers are discovering that no offers means they are asking too much. So your agent could be wrong, or depending on the property absolutely right.

It all comes down to motivation. If the seller wants to sell--I mean really WANTS to sell, the price will fall like Autumn leaves until a buyer is found. If the seller is willing to sell, but is stuck on HAVING to get a certain amount, the price will sit a little too high forever. Sometimes a seller is faced with a certain foreclosure, and while the house is offered for sale, he cannot accept an amount under a certain level--without permission from his bank (here we are on the verge of a short sale). If your agent knows that to be the case, then only the sellers bank could accept an offer lower than that specific asking price.

There were a few replies to your question that I would also like to address. Realtors work either for the buyer or the seller, or in some cases (as a transactional agent) they are just making a legal deal. If you have a "Buyer Agent" then that person is working for you. This is usually free and the best arrangement for you. Your agent can and should help you with your offer, and ought to give you a broker opinion on the appropriate price to pay, and how to "craft" the offer so you will get the most return on your dollar.

Is offering less the best way to get the best deal? Not necessarily. First of all you need to be sure the property is right for you and your family--I am assuming you are looking for a principle residence here, not an investment. Then you should determine that if the house will work for you, and the neighborhood will work for you, and the schools will work, and the commute to work is not too long--well then this is the right house.
Having determined that, and your own level of commitment to the house, think if you are at all average. If you are, others like you will likely be looking for a similar house.

So your offer should be the lowest FAIR price, but also you should think about how you can sweeten your offer. If you offer low and are prequalified, then maybe you would say the home inspection will not be used for negotiation, only for your information. Maybe you would offer to close immediately. Maybe (if the house is full of stuff and the seller is the family) you'd accept the house with any personal property they choose to leave behind--meaning you would take care of throwing away stuff they left behind, and will handle the cleaning as well. The sweeter you can make the deal for the seller, the lower the price they will accept.

And finally, with regard to the reply regarding being an authority on property values--in this real estate market, where prices move everyday, you'll do best to choose a full time agent. Many agents are not selling enough to support their families and have gone to other jobs, but kept their licenses active. If you want a strong negotiator, find or stay with a full time Realtor.

Good Luck

Dane Hahn
0 votes Thank Flag Link Sat Feb 28, 2009
Alex,

A seller's level of motivation is ofter tied to when the home was purchased and how much they paid for it. In the case of individuals that bought high an important factor in the amount of equity they have in the home. With the sellers that bought low, the personal needs factor is normally more dominant that what they have to get out of the sale to break even.

The best aproach is for buyers to do a study of all recently sold similar property in the general location of the subject property. This should provide an insight into where you should begin as well as your top number.

Today's sellers expect offers to come in under their asking price........However, "Low ball" offers are not recieved well and quite often are not even responded to, ending negotiations. Buyer's today need to be encouraged to keep their offers real if they are seriously interested in obtaining the home.
0 votes Thank Flag Link Sat Feb 28, 2009
Alexis. Good morning. I can totally understand WHY you would have this reaction. Afterall, these are reported to be just awful market conditions...for SELLERS, right ?

What I have experienced is that nice houses, in good locations, in good condition, are still hard to come by...and in buyer demand. Their values have been spared the drastic declining values of most foreclosure properties.

More to your question...not to sound vague, but each situation is at least slightly different. Not every Seller IS motivated. But, Alexis, some are. And, as a Buyer broker, thats where I earn my pay. Which is to drill down and try to find out if there is an opportunity to aggressively negotiate...or not. While its true, values in NH have not been hit as hard, this doesnt mean a buyer cant take advantage of a Sellers specific, personal situation.The key is for the Buyer broker to ask the right questions to determine just how motivated the Sellers are.

Truth is, Alexis, it comes down to how bad you want the property. If you dont want to risk losing the property to a competing buyer, your broker MAY advise you to offer full value, IF , he/she has compared it to other SOLD properties and can show you its likely value, in todays market. Then again, if you dont mind risking, tell your broker that. By offering lower you may get the answer of how serious the Seller is...of course, be willing to accept the risk of losing the house.

Good luck, Alexis ! Jerome Duval, Buyer broker, Greater Manchester
0 votes Thank Flag Link Sat Feb 28, 2009
If the list price is already at or below market value, and the property is in market-ready condition, then that property is correctly priced.

You need to determine how motivated that seller is to sell now.
0 votes Thank Flag Link Fri Feb 27, 2009
From the way you phrase your question, it sounds like you have
made the mistake of expecting that the agent representing you
will negotiate the best price on your behalf. One of the dirtiest
secrets of the RE industry is that agents are completely loyal
to the industryfirst, and generally regard buyers as ' cows to
be milked'. Since your ' buyers agent ' knows how much your
mortgage approval is for, the agent feels entitled to assume
that spending the full amount is in the best interests of the
industry, and the buyer will come out all right in the long run
anyway, since RE can only go up. haa haa

You might want to ask the agent representing you where
they attended school and what type of degree they earned.
And if they don't have a degree, what makes them such an
authority on property values!!
0 votes Thank Flag Link Fri Feb 27, 2009
Alexis what is needed is a good education! Did you know that on average in Manchester NH the list to sale ratio is 96.2%? That is to say, homes are selling in your area at 96.2% of list price. For a buyer that gives you good statistical data to base reality and for the seller it allows you to understand where offers are most likely to come in.
Knowing the market and its facts will help either a buyer or a seller in any market condition.
Web Reference: http://suzannedamon.com
0 votes Thank Flag Link Fri Feb 27, 2009
The first question I would ask is, "Who does that agent represent? The Seller or you, the Buyer?' A Seller's agents duty is to try to get the highest price for the property.
A seller should expect to receive offers less than the asking price and should have priced the property to allow for some negotiation. Remember that there are also more negotiable items or terms in an offer than just the sales price. Other negotiable items include but are not limited to: closing date, furnishings, financing terms, closing costs and repairs.
If the Seller speciifically told the agent that he would not take less than the asking price then the agent has a duty to relay that information to you. Assuming you are represented by a Buyer's Agent, you can ask your agent to make an offer for less and your agent has a duty to you, to present that offer. I hope this helps and good luck to you.
0 votes Thank Flag Link Fri Feb 27, 2009
Alexis:

I know it may seem unheard of to pay list price in this market, however you have to look closely at the market value to determine if the home is already priced well or even below market. I know nothing of the comps as you did not include that info. It is difficult to advise without the entire scenario.

Study the recent sales carefully and look back over the past year to determine the trend in the neighborhood for pricing. You will able to compare list price to sale prices to see what others are getting off of the price.

You may find that the home is already priced well, or it could be overpriced. As an example, if this home is listed at 210K and all the comps over the past three months for a similiar home are at 220K, I would say the price is a good price. On the other hand, if comps are only 190 and the seller is asking 210K, it is overpriced and you should move on.

Offer the seller list price if it is worth it and ask for concessions such as closing costs, discount points, title charges, home warranty, gas line waranty, repairs to be paid by the seller, 6 months mortgage payments, etc.

Best of luck with your offer,
0 votes Thank Flag Link Fri Feb 27, 2009
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