Lowballing on an overpriced house, worried we will lose it if they open it to more offers

Asked by Bourbon Baby, Louisville, KY Thu May 29, 2008

yet to finish) and have since decided to lower their price, to increase thier offers. They are hesitant to negotiate with us because the house gets a lot of activity and think they can get more than what we are willing to pay. They are not too far off from what we have budgeted, only $5000. While we don't want to lose the house, we also don't want to overpay. How do we secure ourselves with these sellers and hope they continue to entertain our offer without going to shop around for more offers. (the house has only been on the market for 3 weeks)

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Joe Hayden’s answer
Joe Hayden, Agent, Louisville, KY
Thu May 29, 2008
Hi Carrie...What is your point of reference for determining the home is over-priced? Your sellers could possibly be using valid market data to determine a pricing scheme and have confidence they are going to get it with a little time. It seems odd they would drop the price after only a few weeks, though. Are you sure that your number is a fair offer, or do you think your budgetary concerns are clouding your judgment? If you really want/need the house, it is okay to pay a small percentage more than you think is a fair offer if you intend to remain in the home for enough time, but if you are certain that it is a bad investment to pay their price and it would have a negative affect on your budget, then walk away. There are more to choose from...
1 vote
Susan Wesely, , Saint Paul, MN
Wed Jul 16, 2008
If you are getting a mortgage, you won't likely overpay - the house has to appraise for at least the mortgage! If the property really is still overpriced at only $5000 more than your offer, I would worry about whether you will be able to get financing. If it's reasonable at the lowered price, can you take another look at your budget? Are you open to a counter offer, perhaps consideroing some of the suggestions offered by Virginia? If so, that should be communicated through your Realtors.
0 votes
Brenda Miley, Agent, Munster, IN
Wed Jul 16, 2008
Carrie, with the help of an astute REALTOR, you should be able to determine if the property is "really" overpriced. The fact that the home is $5000 over what you would like to pay, is not concrete proof that the home is priced too high. Maybe, because it is nicer than other homes you have seen is justification for the price. I agree that if you and your husband agree that you love this place, than sit down with your agent to decide if the price the seller is asking is appropriate. I have seen buyers lose the house of their dreams, and then later, nothing else measures up. Don't fall into that trap!
0 votes
Virginia Gar…, Agent, Louisville, KY
Wed Jun 11, 2008
Dear Homebuyer,
You and the market determine what a house is worth. $5000 is about a difference of $35 a month in mortgage payment. If you like the property I would not let it get away unless you know that your time there will be short. If you know based on market comparables it's too high you may want to walk.
BUT remember there are more terms than PRICE in the negotiation process. The sellers may be nervous to have an offer so quickly and it may not be the price that's the sticking point. Have your agent determine what kind of closiig date and possession date would be beneficial to the seller. Somtimes being flexible on these issues can save you money. Has the seller found another place to live? Maybe they need time to finish a house they are building can you close and rent to them for a few months, maybe you can delay closing a few extra weeks? Maybe they need to be out of town by the end of the month can you close fast and take possession quickly. Is there a brand new fridge in the house that you asked for that you would be willing for them to take with them? You see where I'm going with this. There are lots of ways to write your offer to benefit the seller besides price and if you are in a position to be flexible and offer terms they may not get from another buyer they may be willing to accept a lower price. Of course is goes with out saying that you should have you financing lined up and supply them a preapproval letter so they know you are serious and credit worthy. Good Luck1
0 votes
Jody Siegel, , Monmouth Junction, NJ
Thu May 29, 2008
Dear Home Buyer:
Do you love the house? Have you discussed the marketplace with your realtor to determine whether the home is listed fairly? If both of your answers are "yes" then, I would wonder why you would risk losing a home that you both love and is within your budget. When I write contracts for my buyers, if they are making a full price offer, I write in that "buyer requests that the home not be shown during attorney review period". That does not mean that anyone who has already seen the house can't give an offer but new buyers won't be able to see the home. Even in this market the good houses that are priced well go!!!
Good luck to you,
Jody Siegel
0 votes
Gene Gillenw…, , 98382
Thu May 29, 2008
Lowball offers are common in this market. They are a good way to start the negotiation process. If the home is on the market they are already open to more offers. The seller doesn't want to lose you either, unless they are in a multiple offer situation. Your agent is the key to making this offer become a contract. He/She should be able to find out if there are multiple offers. Another key is the time period before your offer expires. The longer the time period the greater the possibility that the seller will receive another offer. There is an old adage in real estate, "if you are interested in a property then someone else is." Consult with your agent he/she is your best asset through the negotiation process.
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