Gizmo, Home Buyer in Westchester County, NY

What does eager to sell mean? We're considering a house in Bedford that just dropped its price from $3

Asked by Gizmo, Westchester County, NY Thu Mar 27, 2008

million to $2.5. Even so, it's out of our range but we've been told that the seller is very eager. Do you take this to mean a 5% discount (which I heard is only the standard discount around here), 10%, 15%, 20%? It has been on the market for 2 months now. Thank you.

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Impossible to tell. Forget the "rules of thumb" about how much below list to offer. List may or may not represent a fair value. You've got to begin with the comps. On the house you're describing, we don't know the comps. They might be $3 million, in which case $2.5 is certainly a decent value. Or the comps might be $2.2 million, in which the house is still overpriced.

Once you get the comps, figure out what you can afford--which you've already done, in this case--and how much the house is worth to you. Maybe the comps say it's worth $2.5 million, but for whatever reason you'd only pay $2 million for it. But if you really love it, maybe it's worth the full $2.5 million.

Then, you ask what does "eager to sell" mean. Generally, it means that there's some pressure on the owners to sell and they're willing to drop the price further. How much further? Again, who knows?

The fact that it's been ont he market for 2 months may not mean very much. In today's market, in many areas, the average time on market is over 2 months. In a blazing hot market, 2 months is a long time, but in today's cooler market, for higher priced homes, 2 months doesn't indicate much.

And you've got to understand the different reasons a property might be on the market for a long time. It probably means it's overpriced. Either that, or it doesn't show well at all. Yes, it can mean that the owner will be more flexible than when the property came on the market, and he/she was expecting a quick sale at close to list price. But, on the other hand, it can mean that the seller's inflexible. Maybe he/she has received offers more in line with comps, and he/she has rejected them as too low. It's always possible the seller will change his/her mind. But sometimes they're stubborn. ("No one's going to steal this house from me!")

Based on what you wrote, if the seller is "very eager," that's an invitation to come in low. I'd assume, from what you wrote, that if the 5% discount is "standard" (no, there really isn't a "standard"), that the 5% discount applies to houses properly priced, that show well, and whose owners would like to sell but aren't highly motivated. I'd suggest coming in at least 10% lower, probably more. If the owner accepts, good. If the owner counters, that's good, too.

Hope that helps.
1 vote Thank Flag Link Thu Mar 27, 2008
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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Gizmo, i started to type a response a while back, and clicked off the window, then hit backspace when i came back and lost my response. bah. anyway, a summary.

It seems you're in the same boat we were/are in, found a house you like, not a dream home, but definitely something you would like to live in, but don't want to overpay. For us this was a large concern not to pay a 10+% premium. For our offer, we sent a long letter with reasons we priced the house as we did and why we believe our offer was fair. The reason for this is we also did not want to offend the sellers. The listing agent was very friendly but they declined to counter, c'est la vie. That said, the listing agent has basically given you carte blanche to come in with a number here. A "very eager" seller that has been described as such will be listening to all offers and should understand that they're being advertised in a way that will bring in lower offers. Personally, 2 million feels like a floor to me because its a nice round number that seller could have a mental barrier against. So if you came in at something like 2,050,000 with solid terms, I believe there is no reason for a "very eager" seller to be offended. You could also do something where you offer like 2.2 and have them pick up closing costs and put those towards pts on the mortgage to have a payment similar to paying 2 mil even.

To another point you made, I remember thinking after reading a previous post of yours with your price range and the fact you're looking WAAAAY up in westchester that you're probably a hot commodity right now. The areas up there, Bedford, Armonk, Pound Ridge, etc are beautiful with great schools and all, but they're not on train lines making commuting much more painful. With a range over 2 million and looking in those areas, I'd think there isn't a lot of competition on the buy side out there right now, but I'm not in that range nor a pro, so take it with a grain of salt.

Good luck,
Zack
2 votes Thank Flag Link Fri Mar 28, 2008
there is no charge to make an offer. Good luck.
Web Reference: http://GailGladstone.com
1 vote Thank Flag Link Thu Mar 27, 2008
Whats does eager to sell mean? Good question and many people interpret it phrase differently. I believe the seller or the agent representing the seller is just making you know that the price is not firm, they are willing to negotiate. So just view the home and determine at what price the home may suit your needs. If so make an offer. Seeing the substantial price reduction is a sign of being negotiable and/or realization that the original price was unattainable at this time and in this market.

Make an offer! What is the worst that can happen?
0 votes Thank Flag Link Fri Mar 28, 2008
Zack, thanks for sharing your experience with me. Maybe I'll go with a 15% less offer -- personally, that doesn't seem unreasonable to me if the seller is very eager (the selling agent knows we weren't even looking up in that range to begin with). I have a question... If a seller doesn't counter offer, can a buyer make another higher offer or do people usually consider it a done deal if the seller rejects the original offer outright?
0 votes Thank Flag Link Fri Mar 28, 2008
Of course I don't care about offending the seller per se, I care that the seller will refuse to negotiate further. According to the NYTimes article, when sellers get lowballed and offended, they will sometimes refuse to even talk to you. I also understand that it really depends on the seller's situation, which we can't really understand. But I am asking you based on your personal experience as a listing agent, when you tell a buyer's agent that your client is "eager to sell", what would be the biggest percentage discount I can offer and still keep the seller interested in negotiating. Do you believe a 15% discount would be offensive to an "eager seller."
0 votes Thank Flag Link Fri Mar 28, 2008
Gizmo,

Don't worry about offending the seller. Seriously. If he offended by the offer, he isn't going to write a well reasoned letter to you explaining that you are offensive, or crash his grocery cart into yours at the store and scream to the world "YOU OFFEND ME!!!!"

I know that my analogy is inflatedly comical, but think about it. He gets offended for 2 seconds, tells his Realtor "no way will I go that low" and then he moves on. He won't even remember you name 1/2 an hour later. HOWEVER, what if he is that desperate and takes your offer? YOU WIN.

The other Realtors are right, make an offer and ride the wave. You might get lucky.
Web Reference: http://www.OwnGR.com
0 votes Thank Flag Link Fri Mar 28, 2008
Thank you both for sound advices. In my opinion, the house is worth almost full $3 million, which was the original listing price. (Maybe I'm just used to the inflated prices. Comps around that area are about 3% for new constructions and 6% for resale. This house is a resale.) BUT I just think that not many people are looking in that price range in that area -- I get the feeling that it's a slow market because now we have random listing agents seeking us out... strangely. I know I can always lowball but I don't want to risk offending the seller so much that the seller will refuse to negotiate. The seller no longer lives there (left it a year ago but rented out the house in the meantime). I would definitely take it at a 15% discount, but I wonder if the seller would be appalled at that offer. Would a "very eager seller" (according to the listing agent who characterized it that way) be appalled at a 15% dicounted offer in your opinion? Thank you so much.
0 votes Thank Flag Link Thu Mar 27, 2008
If you like the home make an offer and get the process started
good luck!
0 votes Thank Flag Link Thu Mar 27, 2008
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