Home Buying in 60120>Question Details

Carl, Real Estate Pro in Chicago, IL

I am looking at a Duplex in the Elgin area that has been on the market for over a year. It is sitting empty

Asked by Carl, Chicago, IL Sat Nov 24, 2007

and the owner has moved to Phoenix to become of all things...a Realtor.

I made an all cash offer that was 15k less than his most recent price adjustment. He countered down by 3k and I came up 4k. We are 8k apart.
This is an investment property for me to turn into a rental so no emotional attachment on my part. I know that the market is coming down and the selling season has moved into the slow period.

I really feel I should stand my ground on my price considering the sellers situation. I believe he will break even at the price that I am offering him.

Any input would be appreciated

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Hi Carl,

Chances are that you will have an easier time finding a replacement property than the seller will have in finding a replacement buyer. I am making some assumptions about your market from your representations here, since I have no first hand knowledge.

For primary home buyers, one needs to look at the value that home will have on their lifestyle. For investment purposes, it is a pure play on business and numbers. It either makes sense, or it does not. For you, it does not make sense to pay more for this investment property, and losing this property to another buyer appears as though it would not negatively impact you. As long as you are OK with not getting the property, stand your ground and keep your eyes open for alternatives.

If you have data that supports a downward trend in comps, you (or your agent) can prepare a “pricing for the future” spreadsheet which would show where the property may comp out if the trend continues. Add carrying costs that are not offset by rental income and show that the seller may have a better net position by accepting your offer sooner vs. later. Let the seller know that you remain interested, but firm in your offer. Make it easy for the seller to come back to you. If you make it difficult, pride can stand in the way of a good deal for both of you.

The fact that this property is owned by a Realtor is of little bearing. As a company, we have a policy that agents may not represent themselves. As the Broker, I get the pleasure. It’s often harder for a Realtor to emotionally detach themselves.

All the best!
Deborah
1 vote Thank Flag Link Mon Nov 26, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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Thanks for the feedback Lynn,
I don't believe the seller is a Realtor here but is in AZ. The place has been somehwta rehabbed. Still needs more work. The comps ahve been around 170k and he started at 179k last year and is down to 163k. I offered 148k cash. He countered at 160k and I up to 152k.

I think that I will hold the line since he is probably more desperate to sell, that is, unless he really thinks he can get the 160k from someone else.

He has a buyer with cash and I think he would be foolish over 8k.
1 vote Thank Flag Link Sat Nov 24, 2007
Only time will tell, and luckily for you time is on your side. He needs to sell more than you need to buy.
1 vote Thank Flag Link Sat Nov 24, 2007
Where are the last comparable sales? You didn't mention. Seller can ask whatever he wants but a year is not good & is probably telling him the price is definately off. You ask whatever you want but if there is never a buyer????? Just because the seller is becoming a realtor means nothing. In IL if he is licensed he must disclose that to you unfront first. You also have never mentioned the condition of the property, buyers have not been willing to do the work/rehab on homes for the last few market years. Seems seller might be unrealistic. Hold on your price.
24 years Schaumburg Area Realtor http://www.LynSims.net
0 votes Thank Flag Link Sat Nov 24, 2007
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