How do I negotiate for a property that is priced at a VERY inflated price??

Asked by Sll, Pittsburgh, PA Sat Oct 10, 2009

A house that has been abandoned for several years (the owners went to a nursing home) has been put on the market. There are 4 identical townhouses connected to each other. 2 of them were bought in the 80s and one was purchased 5 years ago. The latest was purchased 105k, and it had newer windows and some updates. This property that I am interested in has never been updated, and the windows need replacement and it is listed for 229k. None of the comparables add up. Another slightly larger similar home a few doors down recently sold for 160k but it had a completely new high end kitchen.
My realtor is no help (I'm thinking of getting a new one) she seems to think that my research into comparables doesn't mean anything and that those other people just got "lucky". She works with the listing agent at the same company.
This house will never sell for 229k, but it seems that I'm not being permitted to make a reasonable offer. What should I do?

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7
Ellen Living…, Agent, Pittsburgh, PA
Tue Oct 7, 2014
Price is always negotiable. As a city agent in Pittsburgh, and an accredited buyer agent, I can represent you and your interests. I do use comparables in negotiating and will help.
If you are looking to change, and do not have a buyers agent agreement with your current Realtor, please contact me at 412-670-1366. Ellen Livingston
Multi million dollar producer
5 Star agent voted by clients( top city agent)
Berkshire Hathaway Homeservices
0 votes
Jenny Masait…, , Murrysville, PA
Sun Oct 11, 2009
Let me first say that these answers are leading you in the right direction. Then as I am from Pgh myself and familiar with Greenfield I've not seen houses in that price range unless in Squirrel Hill and even then there are houses selling under 200k. If you have your heart set on this house why not get an "inspection" before making an offer (with another agent perhaps) with the cost of improvements attached as an addendum to the sales agreement. This does 2 things Not only do you see how much you are likely to invest but also informs listing agents and owners the true value of what a buyer is looking at, bottom line. Be aware you'd be spending money in advance for the inspection but people would rather spend a couple hundred in an early stage to support an initial offer than to renegotiate the price after acceptance of a "reasonable" first offer negotiated down to a still higher price than what you'd like to see. Now when choosing an inspector make sure you hire one who has a background in building and remodeling that is qualified and will give a price range for work included in an inspection report. Some inspectors will not provide that so you must be specific when calling. I am also an agent in the area and if you'd like more information please call 412-795-7789 and good luck
Jenny
0 votes
Don Tepper, Agent, Burke, VA
Sat Oct 10, 2009
Pretty good advice already.

I'm going to take a stab at guessing what's going on. (I market a lot to out-of-town owners, and it turns out that a lot are in similar situations.)

You say the owners went into a nursing home. It's likely that one or more of the children of the owners is/are the trustee. At the very least, the child or children have power of attorney to sell the property. (Go online and look at the tax records. It may list the elderly owners, or it may say something like "John Jones, TR" or "John Jones, Trustee." In any case, though, someone else is making the decision.

If the owners have multiple children, what's probably going on is that one of the kids wants a lot of money for the house. He/she probably needs the money. The other children just want to sell. After all, the house is costing them thousands of dollars a year in taxes and insurance. But one child can hold up the entire sale, so the others have to appease him/her.

Where'd they come up with the $229,000 price when you're suggesting the comps would put the price at maybe $125,000-$150,000? Could be a couple of things. First, most likely, either they had the house appraised several years ago--when the owners went into the nursing home--when the market was at its peak, or there were other sales in the community at that time for about that price. Either way, the children (or at least the one who needs the money) has convinced himself that the property is worth $229,000.

As for the listing agent; he/she knows it's overpriced. Still, the agent is hoping for some offer to present to the children. And the agent hopes that the offer will inject some reality into the situation and that the kids might actually accept it. Some money is better than none. The agent would like to sell the place, but he/she isn't experiencing the urgency that would arise from someone who absolutely needs to sell.

So, what do you do? First, let's clear one thing up. You're permitted to make any offer you want. Period. Reasonable or unreasonable. High or low. It's your absolute right to make an offer. If you're not comfortable with your current agent, have a talk with her and then consider all your options regarding representation.

Next, you might want to pin the value of the property down a bit more. We've got kind of a wide range already, and you don't know for sure exactly what repairs need to be done on the inside. You really ought to pin it down to maybe a $10,000 range.

Next, you make an offer. Your offer should be no more than the comps suggest, and in most cases less. If, after further research, you determine that the house in its present condition is worth, say, $135,000, then you make an offer of $135,000 or less. And you accompany your offer with your research justifying the price you're offering. If the offer is rejected, wait 4-6 weeks. Then make the same offer again. If it's rejected, wait 4-6 weeks and make the offer again. At some point, the children will come to understand that you're a serious buyer...and that there aren't any others out there.

That's what you do.

Good luck.
0 votes
Dolly Nicely, Agent, Wexford, PA
Sat Oct 10, 2009
It sounds like you have done your research and are going into this fully informed. That will be your key to success. If the seller is unreasonable in their asking price and really not motivated , you may want to consider moving on to something that is attainable. Your agent should be your best resource. You may want to ask that an offer be written and presented on your behalf. If you are unable to make any progress, and still want to continue to pursue this particular listing, you may want to do as you say, and move on to a mutually satisfying business relationship. Best to you.
0 votes
The Hagley G…, Agent, Pleasanton, CA
Sat Oct 10, 2009
Unfortunately, the selling price is ultimately up to the seller. Find another agent, submot an offer, make sure your aggest is aggressive and good at follow up....good luck!
Web Reference:  http://www.cindihagley.com
0 votes
Sean Dawes, , Philadelphia, PA
Sat Oct 10, 2009
What do the comps reflect? Present an offer and show the comps if you want.
0 votes
Robert Green…, Agent, Cherry Hill, NJ
Sat Oct 10, 2009
Make any offer you want....if your current agent won't do it, find another agent. The seller's may not be aware of the comparable sales. Even if the seller gets lucky and finds a buyer at that price....sounds like there are no sales to support the value; thereby making it virtually impossibe to get a mortgage. If the seller's are serious about finding a buyer, they will have to sell it for a reasonable market value......or wait for a (naive) cash buyer.

Robert Greenblatt
Keller Williams
0 votes
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