Is it offensive to offer a seller what they paid on a house two years ago if they have marked it up $65,000?

Asked by Trying2buy, Clovis, NM Sat Jul 11, 2009

without adding equity to the home?

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Max Watt’s answer
Max Watt, , Cannon AFB, NM
Tue Jun 8, 2010
Whether it's the price the seller gave for the home or not, if this is the offer you want to make, go for it. All he can do is: reject, counter, or accept. I would expect that an acceptance is very unlikely because of selling expenses and closing costs which means the seller would have to come to the closing with money out of his pocket---many don't have the money to do that.

But to answer your question, over my 30 years of experience, making an extremely low offer HAS offended the seller at times--in the seller's mind it may not seem overpriced in comparison to others selling around it, maybe the market has actually gone up that much, or maybe he bought it at a really low price to begin with to turn for a profit, or maybe he's put a lot of money into it with upgrades, etc.----don't know the circumstances and there could be several to consider. But, if offended, the offer is usually rejected. That is the only reason, if you truly want the home, you might reconsider so that you can at least hear back from the seller with a counter.

Thanks, Max Watt, Re/Max First Place, Clovis, NM http://www.isellclovis.com or email max@isellclovis.com
Web Reference:  http://www.isellclovis.com
0 votes
Bill Eckler, Agent, Venice, FL
Sat Jul 11, 2009
Trying,

No buyer should pay more than the present market value for any home. Our recommendation is to not base your offer on what the owner paid for the property two years ago but to base your offer on similar comparison property recently sold in your in your location.

Your real estate professional will be able to support you with this information and assist you with the purchase process.

Good luck
1 vote
Kitsap, Both Buyer And Seller, Washington
Sat Jul 11, 2009
Point of clarity, Joel:

When a buyer approaches what to offer a seller based on what they believe they know the seller's mortgage line to be - that makes it personal.

When a buyer approaches what to offer a seller based on what the current comps are, as Bill has suggested - that's business.

The former approach is in poor taste.
0 votes
Joel Youngs, , Jacksonville, FL
Sat Jul 11, 2009
It's a buyers market and it's not personal... Also,you might be the only offer, go in low,you can always come up.
0 votes
Gary Ellswor…, , La Vernia, TX
Sat Jul 11, 2009
It sounds as if you have already decided what you want to do, so go ahead and make your offer, your agent is bound by law to present it. At the end of the day the worst the owners can do is reject your offer, at best it may be the beginning of a solid negotiation ending in you having the home that you want. Let me know how it goes.
0 votes
Trying2buy, Home Buyer, Clovis, NM
Sat Jul 11, 2009
I understand what you are both saying however it is a tough line of logic to buy into. Of course market value is the most critical factor in pricing however if the market is inflated because people owe too much on their homes, why should I assume that bad debt and find myself in the same boat in a couple of years?
This is an economically depressed area so we are probably a couple of years behind on the housing issues seen other places, but if the dynamic you describe exists where people are in hoc on their homes, there is a good chance these homes will be in foreclosure within a year or so.
Eventually it has to catch up and why should someone buy a house high when they in turn will be strapped when they go to sell.
So even if the price is in line with the market, the market has proven subjective and volatile lately, so what value does that have?
But back to my original question, I know what they mortgaged this particular house for and it is well under what they are asking. And if you look at the square footage average price in the area they are at 1 1/2 times.
So I guess I am answering my own question here, but it doesn't seem unreasonable to offer them a starting price that they would break even on.
0 votes
Rich Cederbe…, Agent, Albuquerque, NM
Sat Jul 11, 2009
Yes, many sellers will find it offensive and not negotiate. Sellers are people, and these sellers may need to get that much money to get out of the house. It's not that rare these days to find out that the sellers have borrowed against the house for way more than it's worth. Find a similar home already near market value and make an offer on that one. It's likely the whole thing will go much more smoothly.
0 votes
Gary Ellswor…, , La Vernia, TX
Sat Jul 11, 2009
The selling price of a home is not determined by the seller as much as it is by the local market, this is where a competant agent is worth their weight in gold for both the buyer and the seller. For example ask your agent what the comperables (similar homes with similar features) are being sold at in your area, that is your best determining factor in what to offer for a home. In many areas of the country there is a glut of homes on the market, this factor drives prices down, where there are few homes on the market and jobs are secure, home prices are going to be higher. In the end find a good agent, they will be able to help with negotiating the sale or purchase of your home, then listen to their advice they know the local market better than anyone.
0 votes
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