Afraid to offer low on probate sale, on market since 2006

Asked by Anotherannabanana, Encinitas, CA Wed May 11, 2011

There's a home I'd really like to make an offer on. Let's just say it's a "strange" old house, in a "bad neighborhood," but it suits me and I'd like to preserve it as it is. I would hate to see this house have all its eccentricities stripped away by some investor. It's been on the market since 2006 and price has lowered a few times. It's listed similarly to "comps," BUT unlike the "comps" it has a single outhouse-sized bathroom off the kitchen, with one of those teensy standing showers. And the kitchen is tiny and narrow, w/ only a couple feet of counter space. Plus the stairs to the bedrooms are not up to code - each step is really tall so a senior or child would have trouble climbing them. I can live with this, not having kids, however I have to take these things into consideration if I had to sell for some reason. I just don't know what's too low to offer - I'd like to offer about 84% of list. P.S. - My location is not really Encinitas. I don't want the listing agent to see this.

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5
Michael Ford, Agent,
Wed Oct 19, 2011
good for you for seeing the charm in an old beater...in a world of cookie cutter uniformity they add a nice element to a 'hood.

probate homes are an odd corner of our trade and can be killer deals if you have the patience to deal with the frequent curveballs that can arise in those files. on probate deals the market time is meaningless. there may be any number of reasons why it isn't selling and as many why it might be falling out of escrow, if it has fallen out.

the seller on a probate may be a battling group of heirs, an attorney that is busy, there may be title issues or a dozen other factors. you mention some condition issues and other attributes of the home that may make this unfinanceable. that kills the deal for most buyers. an agent with some experience will know what questions to ask of whom, or a good relationship with a few attorneys, can get the real reason in a few minutes. i am glad to offer some strategy tips for you if you click through to my contact info.
0 votes
Rachel LaMar,…, Agent, Carlsbad, CA
Sat Jun 4, 2011
It is a buyer' market and you have a house that has not sold in 5 years; you are in the driver's seat on this one! Don't be afraid. My advice is to write your "low" offer and have your agent submit a letter detailing the reasons why your offer is where it is. The worst thing that could happen is that the seller could refuse your offer. The fact that it has not sold indicates that it is overpriced anyway, so if the sellers truly want to sell they will have to open their eyes and realize what a true buyer is willing to pay.

Best of luck!

Rachel LaMar, J.D.
LaMar Real Estate, Inc.
0 votes
Anotherannab…, Home Buyer, Encinitas, CA
Wed May 11, 2011
Thanks, Don and Marcin. I read somewhere that probate sales can only accept a minimum of 10% less than list price - is this true? I guess the other reason I'm afraid is that it will go to court publicly, where other people can come in and outbid me. And I don't know if the listing agent was making it up, but my agent was told we only had 1/2 hour to look at the house because suddenly, after months of no interest, someone had scheduled a showing the same day as me! This happened at the last house I was interested in, and a couple days later I saw it was pending. :( And I'm limited by having to put a whopping 25% down (I have excellent credit, but I've only owned my current business for 1 1/2 years). Should I offer low so they can counter offer (list is $179K, should I offer $155K if I only want to go up to $161K, which is 90%?). I also read somewhere that it takes 2 to 3 years to purchase a probate house!!!! Is this true??? What if the house has been for sale for 5 years?? Wouldn't that give the sellers/court more time to be prepared to sell it? Why so long?
0 votes
Don Tepper, Agent, Burke, VA
Wed May 11, 2011
Afraid of what?

That you won't get the house? Well, you don't have the house now.

Afraid of "insulting the seller"? That's silly, of course. But beyond that, few sellers would be insulted at receiving an offer on a house that's been ont he market for 5 years.

Afraid of offering less than list? Let me tell you a little secret: That house is way overpriced. You may THINK it's in line with the comps, but it isn't. Otherwise, it would have sold. Here's another secret: Offering 84% of list may well be overpaying for the house. I'd probably offer less.

Regarding pricing, consider this scenario: You offer 84% of list. The seller counters at 94% of list. You both agree on a price at 91% of list. That's a not-unreasonable scenario. Ask an agent in "Encinitas" (wherever you really are) what percent of list homes there sell for. It'll probably be about 93%. So it's not likely, even if you offer 84% and are willing to bargain, that you'll walk away with a decent value.

Find another Realtor--one to represent you. Come up with a real price on the house. THEN offer less.

Hope that helps.
0 votes
Marcin Talaga, Agent, Chicago, IL
Wed May 11, 2011
If it has been on the market since 06, offer as low as you want. The worst thing they can do is reject it. I would think that at this point, they would want to get rid of it so any offer coming in is worth looking at for them. Take the chance. Why not?

Marcin
Marcin@ConlonRealEstate.com
0 votes
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