Any suggestions? We would just forget it, but it is the only house we have found that we like and we have a contract on our house.

I have a suggestion - up your offer price or find another house.

He is not going to see things your way. He does not have to sell to you at a price you deem fair. If you don't want to play his games, move along to something else.

The seller doesn't have to sell you the house for what you want to pay for it. He can accept or decline any offer he wants, so I don't think I'd say he was being unreasonable. Although he may be a bit unrealistic, but I'm not familiar with your market and can't say whether or not he is being unrealistic either.

You can either move on and look for another home, or pay what he's willing to accept. Make your best offer and if he doesn't accept that, then move on.

it is the only house we have found that we like and we have a contract on our house.

supply and demand.
This is not always a "larger universe" thing; sometimes supply and demand are highly individual.

Apparently the supply of houses YOU like is low; and YOUR demand (you have sell) is high.

He doesn't know that, of course, but you will need to factor it in as you decide what this house is worth to you.

If you won't change your price, then you'll need to change the supply/demand relationship (i.e., decide you like another house, or come up with more time to look somehow)

xamsx is right: he isn't required to meet your price, or negotiate.

And in fact, if this is the only house you like, in a market that seems as full of other houses as yours apparently is, then perhaps this house DOES have something that makes it worth more money than you think.

How does it compare to COMPS?

If you want to come back and bid again, that's the info I'd put in there:
"look, buddy, NOBODY is getting that much money for their house"

Bcs it doesn't matter, really, what he paid for it, or what his asking price is. It matters what the market will bear, and maybe he just doesn't have that info.

"Is the seller being unreasonable?"

Not at all!
Either up your offer or keep looking....

He is asking 7% more than he paid.

We offered him 90% of his list price.

That means, you offered less than he paid.

That's a pretty big idea for some sellers to wrap their heads around. Even if it's the only actual way to sell their house in the current market.

(as we've all said: he may be being unrealistic, ill-informed, unwise, rigid. But he's not treating you ill)

It doesn't matter what the seller paid for the house. He can sell it for any price he wants.

Either increase your offer so it's more in-line with what he wants or find another house.

Is the seller being unreasonable?
Don't know, but possibly unrealistic. I've seen several realtor owned properties sit on the market for almost a year now. No lowering in price. These people probably don't need to sell, if someone wants to come along and buy, great, if not they'll wait. But realtors certainly don't seem to be immune to emotion when selling their own properties.

All you can do is try to get your realtor to convince him to come down.

I believe a good realtor should be more than just a bid relay device.

No they can't work miracles but a good communicator should be able to find out why he's priced it at that price (did he do a lot of updates? maybe your realtor knows someone else in his office? what's the real back story here?) and either get him to counter, find out what he would be willing to counter and let him know that if he's willing to come down in the future before you've found anything else that a deal could still be made.

"What are we doing wrong?"

I. You are assuming that because he bought in 2005 "at the height of our bubble market" that he paid top price. You don't know that for a fact. He could have been a very shrewd buyer and gotten a bargain.

2. You are assuming that because he priced it at 7% more than he paid. the house is overpriced. Again, you may be wrong because he could have gotten it for undermarket.

3. You have lowballed him with a 90% offer without any other justification than the house has been on the market for six months with no other offers.

4. You have assumed that he got his real estate license to save paying the 3% commission that would be due the seller's agent and this appears to have influenced your offer. While this might be true, you have no real way to know that.

5. You have assumed that because he "has to sell," that he is open to a lowball offer. As you now know, you were very wrong on that one.

6. You have a contract on your existing home that is putting you under pressure to find something quickly. In order to buy quickly, you're likely going to have to either pay more than you might have otherwise or settle for a house that's not quite what you want.

It's very hard, you know, to get something quick, cheap AND good. Usually, you have to compromise on one of those factors.

What you haven't mentioned is anything about what comparable houses in the area are selling for. That's a much better measure of whether or not his house is overpriced and he is being "unreasonable."

Have you or realtor run the comparables?

Thanks for the replies.

He is priced 27% over comparable sales in the area. He bought the house new from the builder and paid more than the other homes in the development (not because of more options, but because it was one of the last to be sold). I talked to the builder (to get the floorplan) and he told me all of the options in the house. He also said that it was a "shame that he has to sell".

I don't believe our 90% offer was lowballing, but obviously he does.

We don't have to find something "quick". Our contract to sell is contingent on settlement on a new house.

It's easy to find out how much the house sold for in 2005. If he has to sell, he'll lower his price. Seems like he's gone to great lengths to mitigate his losses as much as possible up to and including becoming an agent to save the commission.

He can list the house for whatever he wants but it's only going to sell for what someone is willing to pay for it.

It's very difficult in this market for buyers to assess real value. Sellers notoriously are unrealistic and price based on what they need to get out of the house instead of fair market value.

Relying on comps these days is iffy at best -- comps were never a solid way to assess value any way, but that's all there was to go by. Educating yourself on the current condition of the market you want to buy in and being informed about its forecast is the best thing you can do.

You found this house, you'll find another one. In most markets the house you buy today will be worth less one year from the very day you sign the papers. There is no way, no matter how much I wanted or liked the house, would I pay one penney more than what I really thought the house was worth. The seller sounds like he could be a PITA to be honest, I'd have to ask myself if I really wanted and needed to go there.

That's a really interesting contingency. I don't think I've run across it before.

Under these circumstances, you're probably not going to be able to make this deal work and should really keep on looking. While you may like the house, it does seem pretty ridiculous to have to pay that much over market for it.

Maybe you could find something close to what you like at a good price and make some renovations?

How much has the seller put into the house AFTER he bought it is also a valid question to ask yourself......Maybe he added thousands in landscaping, custom closets, etc. etc. etc. Those things have a value......

Well, it looks like he is going to accept our last offer (92% of list). I don't know why if 92% is ok that he didn't want to counter. I guess it is his negotiating style.
However, he wants us to change the coinciding settlement clause. He wants us to close on our house first and then close with him about ten days after. He doesn't want to move and then not close.

It sounds reasonable. We can rent back from our buyers for the ten days.

I guess the only risk we have is that if we sell our house and don't close on the new house we will have to move to a rental until we can either close or find another house.

Can he demand that you close your home on a specific date?

I have to tell you, the guy is someone I would not have dealt with at all, especially after that last bit. There is more than one home out there for you, and this guy sounds full of himself and his precious house. Sorry but his apparent attitude is highly irritating.

Sellers notoriously are unrealistic and price based on what they need to get out of the house instead of fair market value.

Actually, most of the time it is the buyer that is unrealistic. In my area, sellers have adjusted their prices, buyers still expect them to come down another $30,000-$50,000. It isnt happening.

He wants us to close on our house first and then close with him about ten days after. He doesn't want to move and then not close. this guy sounds full of himself and his precious house. Sorry but his apparent attitude is highly irritating.

What is highly irritating about negotiating what works for him? The transaction is all about "negotiating" not making sure its all one sided. In alot of areas around the country people don't move out of their houses until after you close. I can't blame him for not wanting to move twice especially with the tightening of the mortgage system and deals falling thru right at the closing table. Its not worth it.

Ditto Linda.

The seller's settlement clause makes perfect sense to me in this market. I wouldn't want to be in the position of moving and not closing because someone else's house sale didn't work out.

"Actually, most of the time it is the buyer that is unrealistic. In my area, sellers have adjusted their prices, buyers still expect them to come down another $30,000-$50,000. It isnt happening."

"sellers adjusting price" means a bit more than the paltry $5000 reduction on an already grossly overpriced shack. Sellers need to wrap their minds around the fact that current market price is 50% below their fantasy wish price.

What is so wrong with that idea...Sell your house and RENT save tons of money. Most places right now you can rent for 1/2 of what owning costs.... why throw away your hard earned money on a mortgage? Its just stupid...save the difference and put it in your IRA or 401K
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I guess the only risk we have is that if we sell our house and don't close on the new house we will have to move to a rental until we can either close or find another house.

well, money isn't the only point to things

feeling settled has a value as well.

sellers adjusting price" means a bit more than the paltry $5000 reduction on an already grossly overpriced shack

"re agent" I'm not talking about sellers adjusting in periodic increments. I'm talking about sellers who have adjusted over the past few years, the sellers who realize that prices are not what they were a few years ago. 99% of sellers know the prices have come down and have adjusted for that. My point was that alot of buyers still think with those adjustments, sellers should still be coming down another $50,000.

Sellers need to wrap their minds around the fact that current market price is 50% below their fantasy wish price.

Where do you get your facts from? I dont know of a market anywhere that prices have dropped 50%.

"I dont know of a market anywhere that prices have dropped 50%."

Clearly it hasn't dawned on you that this is the reason inventories are exploding and nothing is selling. The only buyers left are those who know all too well that everything is overpriced in multiples.

Well a mortgage doesn't keep increasing each year like rent often will and who says there will be savings in Renting to invest. Rent in my area is as expensive as a mortgage. At least with the mortgage you get the tax deduction and the money isn't all down the drain as with rent even if the house value goes down some if you plan to stay for a while.

You are also free to paint walls and do whatever landscaping you want and not worry if you can have a Pet or not.

I did not like renting. Actually all my houses mortgages have been cheaper than renting (incl any repairs needed) if you compare the quality of the place too. To get the same quality place, neighborhood, and size I'd have to pay an extra $500/month in rent. I'd rather invest that.

re_agent - in my area the prices are still increasing and there is no exploding inventory so maybe you need to back up your 50% drop with something other than what you just did.

The Case-Shiller National index indicates 20% decline is already in the bag. And guess what? Inventories are still climbing so what happens to price? It falls further.

Now... back yourself up and tell me where this real estate shangri-la is where prices are climbing and inventory is falling.

Actually, most of the time it is the buyer that is unrealistic. In my area, sellers have adjusted their prices, buyers still expect them to come down another $30,000-$50,000. It isnt happening.

Keep in mind that, over the past 5-ish years, the market has become artificially inflated. And for those sellers for which "[lowering the price] isn't happening," well, they are the ones who have had houses on the market for 6, 9, 12, more, months.

You may want to begin by keeping your eye on the news. It seems every day there is a stroy about prices falling and sellers needing to get realistic. Hope this helps.

HAHA maybe in Peoira, farm country this is true but not anywhere near a big city......

Most Americans have no clue how to use a calculator, so lyfia is right mortgage should be about the same as rent....

And most parts of America house prices still must drop another 25-50% to archive that balance.

---------------------------------------------------
Rent in my area is as expensive as a mortgage. At least with the mortgage you get the tax deduction and the money isn't all down the drain as with rent even if the house value goes down some if you plan to stay for a while.

You are also free to paint walls and do whatever landscaping you want and not worry if you can have a Pet or not.
You are also free to paint walls and do whatever landscaping you want and not worry if you can have a Pet or not.

"Keep in mind that, over the past 5-ish years, the market has become artificially inflated. And for those sellers for which "[lowering the price] isn't happening," well, they are the ones who have had houses on the market for 6, 9, 12, more, months."

Correct Herbivore. I can tell you that the only thing selling is stuff priced at 2002 levels and before. My grandchildren will be wearing adult diapers by the time we see 2005 prices again.

re_agent... most of Texas, the Pacific North West and upstate NY are increasing in price and selling well. Many parts of those areas are seller's markets too; a neutral market is six months worth of inventory. Because of fluctuations, a neutral market is better described with inventory levels of five - seven months. Markets with less than a five month supply may be deemed seller markets, markets with greater than seven month supplies may be deemed buyer markets. Looking at your username I will assume this not news to you.

While most markets are in decline, there are still markets that are not. Remember all real estate is local. Just because your market is slow does not mean my market is. I actually live in a rising, seller's market. Conversely just because my market is selling briskly and with price increases does not mean your market is doing well.

There are tons of lists and numbers online if you do a google search that will give you a general idea of the housing market in more specific areas. You can also search local real estate numbers to find areas that are not in a decline. Of the top 150 markets, approximately 25 are not in decline. Again, with your username, I will assume that information is not news to you.

xamsx,

Strange how you mentioned NY state. I was just looking at NY's numbers here ----->http://www.nysar.com/media.asp

For the most recently compiled data, EVERY single county in NY posted declining sales with a median decline of 32% and declining prices in 75% of all counties. My contacts there who sell in 8 upstate counties tell me that sales have picked up recently but prices have fallen dramatically (their words). Considering the long term economic viability of upstate NY is questionable, I'm not surprised that prices are falling that quickly there.

Median home prices in more than 150 metro areas

Wow. That link looks pretty ugy xamsx.

""Correct Herbivore. I can tell you that the only thing selling is stuff priced at 2002 levels and before. My grandchildren will be wearing adult diapers by the time we see 2005 prices again.""
re_agent, let me guess, you are a buyer hoping and waiting for a house you can afford to come on the market.
I bought a property in 2002, I can assure it you prices are not that low (more like double) in my area.
Your strategy might work in Michigan, but not in most areas. But go ahead keep looking something may work out for you.

No my friend. This housing cycle is no different than those I experienced in 1989-1999 when inflation adjusted (real) prices fell 45% or the cycle in 1977 and the ensuing fallout from 1980-1985 when prices fell 40% inflation adjusted. But I have a bulletin for newly minted sales folks; you're gonna starve if you hold onto 2005 prices. 2005 prices are history and we won't see those inflation adjusted prices in a very long time, possibly not even in my lifetime. The intelligent strategy is not accepting outlandish listings. Everything I've sold in the last 9 months have been accurately priced, market reflecting listings where the owner KNEW they had to get in front of the decline and price accordingly. Your best price is today. The longer you wait, the lower the price and that is a fact.

Austin TX the prices are still increasing and I did not say inventory was falling. I said inventory was not exploding.

I believe New Mexico is another area where the market is still hot too.

The problem I see with a lot of the news is that it is reporting it as an overall, however there are areas where that is not true. So no 50% drop here. Not as large increases as in the past either, but still rising. I still didn't see you back up your 50% drop overall though. Where is this overall 50% drop?

Considering the long term economic viability of upstate NY is questionable, I'm not surprised that prices are falling that quickly there.Clearly it hasn't dawned on you that this is the reason inventories are exploding and nothing is selling. The only buyers left are those who know all too well that everything is overpriced in multiples.

Where the heck do you come up with this stuff? How ridiculous. I can tell you, I am an agent in upstate NY and have been for many many years.(Hardly newly minted) Yes, it is a buyers market, however, homes are selling. In fact, if priced properly, they are even seeing some multiple bid situations. (I have two buyers right now who are involved in a multiple bid situation). That doesnt sound like a market where the prices are falling quickly and inventory is exploding.

Making blanket statements about the real estate market only makes you sound uneducated and arrogant as a real estate agent. If in fact you know anything about real estate, you know that it is very regional and that some markets are much better than others.

Linda,

I'm from upstate and if you can show me one instance where the long term health of the economy is on the upswing, even in the face of massive offshoring of jobs, I'll concede. But let's begin with job loses:

GE Power Systems: 80,000 lost
International Paper: 10,000 lost
Kodak: 12,000 lost
Polaroid: 21,000 lost
Scott Paper: 3,000 lost

We're up over 100,000 high paying manufacturing jobs lost. Should I continue?

Now... The national household median income is $52000 (2006 Bureau of Economic Anaylsis). The household median in upstate? $32,000.

Those facts are hardly ridiculous. If anything is ridiculous, it is the suggestion that upstate NY is not in long term economic decline. What is even more funny is the fact that housing prices in upstate NY have been negative (in real dollars) since 1980, with the exception of the last 5 years which were clearly an anomaly. What evidence to you have to suggest that somehow prices will magically resume what was clearly an unsustained trend upward in the face of the facts? Further, I provide state association data above that clearly shows falling prices and falling sales. Hmmm... now lets see... if sales are in decline, that means DOM increases. If DOM increases, inventory increases. So yes... It is the state association that provides the hard data that you choose to deny, even though you're a member of said state association.

Nice try Linda.

Time to stop feeding the troll.......

Excellent Idea xamsx

Time to stop feeding the troll.......

ahhh the voice of reason.

Back to the OP, the seller can does whatever he/she wants, don't get angry. The closing stipulation sounds good to me.

almagh, looks like you've got yourself a deal!! Good for you.

Actually, most of the time it is the buyer that is unrealistic. In my area, sellers have adjusted their prices, buyers still expect them to come down another $30,000-$50,000. It isnt happening.

Buyers being unrealistic isn't really an issue because they have all the power right now. A buyer can be as unrealistic and unreasonable as they want to because they have options. They can rent, they can stay put, they can keep looking. Really no consequences at all for a buyer no matter what they choose to do. Time is on a buyer's side.

If a buyer really wants to test the waters in their market, I'd suggest they make a lowball offer on a house. Any house, doesn't even have to be one that they really want. See what happens. I guarantee you that it will be interesting.

Sellers have opitions too. Like not selling or sticking to their guns and not lowering. Unlike buyers, a seller unwilling to cave to current market conditions will suffer consequences of declining markets and shrinking pools of buyers. Time is not on seller's side unless they can wait it out till 2012 or longer.

Anyone who thinks that the U.S. financial crisis does not affect the market they are in seriously needs to read up. This is not about "real estate is local" any more. It's way bigger, much uglier and incredibly long term.

I just received a brochure today with 2007's info from our regional MLS service (IRES). In my zipcode the average home price increased from $331,396 to $351,371 -- that's a 6.0% increase. In our city overall, the changes by zipcode were increase of 8.2%, 6.0% and 6.2%. A few areas of town had decreases of 1.3%,1.9% and 3.8%. But overall, prices have increased in our city and houses do not stay on the market very long. Most houses in my neighborhood sell within 1-2 months, and some within a week or two.

Dlynn, I doubt the numbers would look that good if you looked at current values vs. a year ago instead of 2007 as a whole.

If a buyer really wants to test the waters in their market, I'd suggest they make a lowball offer on a house. Any house, doesn't even have to be one that they really want. See what happens. I guarantee you that it will be interesting.

Sellers have opitions too. Like not selling or sticking to their guns and not lowering. Unlike buyers, a seller unwilling to cave to current market conditions will suffer consequences of declining markets and shrinking pools of buyers. Time is not on seller's side unless they can wait it out till 2012 or longer.

Anyone who thinks that the U.S. financial crisis does not affect the market they are in seriously needs to read up. This is not about "real estate is local" any more. It's way bigger, much uglier and incredibly long term.

Why would you suggest that anyone make an offer on a house they don't really want?? A waste of time at minimum or very risky.
Many sellers are priced right, and needn't suffer in a declining market. There are buyers out there buying good houses.
Of course, the RE market is slower (and lower) but it is not dead.
Bigger, uglier and incredibly long term is subjective...
Sorry you are having such a bad time.

Risky? What risk and to whom? None for me, a buyer with cash, I can assure you that. Watch this video. It is long. I challenge all of you to watch the whole thing and make up your own mind about what I mean when I say bigger, uglier and incredibly long term.

As long as your local housing stats are looking good, it doesn't matter what's happening to America as a whole.

I realize I went OT, btw.

Here is a link that might be useful: We the People

seems to me this thread has been hijacked.

Risky? What risk and to whom? None for me, a buyer with cash, I can assure you that. Watch this video. It is long. I challenge all of you to watch the whole thing and make up your own mind about what I mean when I say bigger, uglier and incredibly long term.

If you don't understand the risk to making an offer on a house that one doesn't really want, I can't explain it to you...
BTW, cash has nothing to do with it.
and no I needn't watch a video to figure it out.
enough of the hijack

Richard f, in my part of town (I don't really follow the other parts of our town), houses are still selling quickly and are going for their asking price. And, people are still asking more than what they paid a few years ago. There is lots of new homebuilding going on all around us, and it's selling. We are not growing and increasing in price at the rate that many places were for a while, but we are definitely not going bust.

Today's paper has an article about the low foreclosure rate in our county. Here is a quote from the article:

"The county's lower rate could be attributed to the research and tech jobs in the area as well as being a highly desirable place to live. The county is just well-positioned," said Ryan McMaken, community relations director for the Colorado Division of Housing. "There's more ability to weather a recession or economic storm of some kind."

Richard f,

I found some numbers from the first quarter of 2008 to compare to the first quarter of 2007 that might be more current for you.

Here is a link that might be useful: Northern Colorado Market

almagh - Our contract to sell is contingent on settlement on a new house.

Interesting contingency for a seller in this market. I know you settled on a deal on the home you want to buy, but I'm wondering if that contingency is wise in this economy. Unless your house is in a hot market, I wouldn't have considered having that clause in my contract to sell because it would give the buyer of your home an out.

The closing after you close on your home is common in some areas and not in others. It gets really contentious here. The seller of the house we bought in Jan wanted possession after closing and we flat out refused and would.not.budge. There is no way my husband and I were going to take on any type of liability whatsoever.

The situation he asked for is a bit different because he wants to ensure your home closes before his deal with you does. He's not wanting possession of the home after it closes, so I think he's being quite reasonable. He's just trying to ensure your deal doesn't fall through.

Good luck! Let us know how the inspection goes.