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what am i doing wrong with my offer????

16 years ago

Are we way off with our offer? Typical colonial goes for around 160K to 185K (2500 sq ft, 4b,21/2 bath) We went to a home that is over 100yr old, 1.6 acre in city, 5,000 sq ft, listed for 320k (no home has sold for this amount here) newer homes have sold for 255k brand new with similiar size lot. We loved the house, but didnt know what to offer. Had it inspected and appraised before we made an offer. Appraisal came in at 285k, inspection totaled repair around 44k. Taxes are 14k a year. We offered 265k. Seller doesnt need to move and doesnt need to sell. (older person). Seller had oil tanks removed and had new tanks put in after our inspection. When we made our offer we handed in the appraisal and inspection report so the seller would see where we got our number from. Sellers agent says we are way off, seller wants us to buy the home but has not countered yet and plans to. Agent says we can throw appraisal out the door, he can get any bank to appraise the house for the listing price?? Our appraser took 2 weeks to do the report he said the home is a white elephant and wanted to do the best he could with the home??? Are we really way off??? The home has been listed for 3 years and thats when the 320k price tag was placed and never lowered with the flattening market....

Comments (18)

  • 16 years ago

    you had me at listed for 3 years and no price reductions

  • 16 years ago

    I think you did the right thing but have perhaps come up against a situation where the seller may not have a big need to sell, and probably doesn't really understand real estate (or current market conditions).

    While it's true that appraisals are subjective, aside from truly fraudulent ones, a good appraisal is a very decent basis for an offer.

    They are often expressed not only as a simple dollar figure, but a range of x to y. If yours was done like that, was your offer at the lowest end? Perhaps if you moved more towards the middle, it might make a difference.

    However, you should know that the appraisal most likely did take into account the condition of the property when it was evaluated, so subtracting such a substantial amount from the 285K just because there are 44K of inspection/repair issues may not be the best strategy. The appraisal is an indication of the fair market value of the property at the date of the appraisal; It's not the asking price, but the sold price after any deduction(s) for repairs has been taken into consideration. You could also discuss this with your appraiser to double check he was making an adjustment (downward) for condition issues.

    One way you might proceed is to propose that the owner have the property appraised (real appraisal, not CMA), and if there is still a sharp difference of opinion between the appraisers then agree that each of your appraisers agree to choose a third appraiser as a reviewer and referree, with the cost of the third appraiser to be split between the buyer and seller. This is a common situation where there are differing appraisals. The additional cost to you at this point would be one-half of an appraisal fee, or just a few hundred dollars. Might be an inexpensive way to continue to work the deal and get the seller to move by the tens of thousands dollars necessary to get a contract.



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  • 16 years ago

    I don't think this situation has a logical resolution. It sounds like an elderly person who has a number stuck in his/her head & nothing is going to change that; hence, the property's been on the market for three years.

    My advice would be to not waste any more time & energy on this house. Find another house & move on.


  • 16 years ago

    housekeeping-the appraisal stated it was not taking in to consideration any improvments to be made or anything that needed to be fixed and the appraiser is not an inspector, that is why we deducted the findings from the inspectors report. And we did not knit pick over non functioning outlets etc..we were mainly looking at big ticket items, cedar shake roof, masonary work chimney teardown and rebuilt, stucco removal due to water damage and to replace the stucco, dead tree removal, wood rot, fasica replacement,many leaking pipes and not major but bats..I supose we could wait for his counter, but we cant justify too much more wiggle room on our end. I did explain to the appraiser, I just wanted a true appraisal, didnt express any favors of balloning it up or deflating it down like some people do. This is a very small town and didnt want to be labeled as the couple that stole that old persons house, also dont need to be known as that stupid couple that totally overpaid for that money pit...

  • 16 years ago

    Unless you really have to have this property, my experience is once they get a number in their head - that's pretty much it - and - it appears the seller has an agent who going to talk them into anything other than the price they listed it at three years ago. You may have to move on.

    If they wanted to sell, they would - but no counter from the seller is a waste of your time. We just put in a bid on a big old house - it needs a ton of work, mostly things that are important, not just cosmetic updating - but I loved the house - so does the owner. Even though she is long gone and the house now sits empty, she would not negotiate with us - has her number and that's that. Earlier this week the agent called ours to let us know that another offer was coming in - we sent our best wishes. :) Sometimes that's all you can do.

    There is also a school of seller thought that your house continues to appreciate in value even while it is on the market. I know that may make some logical sense - 'cept you have to know what the "real market value" is before you can figure out if it's appreciated in value over the three years it's been on the market. My guess is not so much. Maybe he or she is waiting for the market to catch up with the price of the house?


  • 16 years ago

    "inspection totaled repair around 44k."

    $44k for what?
    Inspectors are not normally a god source of repair costs.
    At best they provide 'ballpark' estimates.
    A 100 year old house is a 100 year old house.

    "Taxes are 14k a year."

    Older houses typically are sold to a more limited market of folks who are looking for them.
    Comparing them to a newer house (how new?) is often NOT appropriate.
    You cannot replace typical 100 year old trim at Home Depot.

    And what does this have to do with the value of the property?

  • 16 years ago

    brickeyee- sorry I didnt make myself clear on the repairs. The inspector gave me no repair costs. After reviewing the inspection report we then contacted contractors and got estimates.
    25,000 for a new roof
    14,000 for repairing the masonary work, repointing the stone fondation, riping down stucco on some of the home repair and restucco, repoint one chimney, tear down another chimney and rebuild it, then add in pipes, and because of the roof the interior and exterior water damage and all the wood around the basement windows. I dont know call me crazy, but if your asking top dollar in our neck of the woods, I would expect the house to be in a little better condition. Forget all the updating we would never factor that into the price reduction, if the seller is comfortable in its current decor thats our problem not the sellers. Even from the appraised price we deducted 20k not 44k. We didnt compare the house to any new ones, we actually offered more then what new ones are on the market for. The appraiser we hired went all over and out f the area with similiar selling market and similiar old homes for comps. Anyway, I guess we could move on, I do love the house, then again right next to it is an exact twin that is going on the market by a couple that has renovated it completely ( I called these owners since they just had their roof done and hired the same man for the estimate) and she gladley pointed out they would be selling next year. Im sure they will ask for more money, and I would pay it since it doesnt need the work this one does. Funny we even offered the seller our current home to rent and a 2 family home we own right behind the home which is for sale just to make the move easy, seller does not want buy at his age. So, I guess we need to move on...Thank you for all of your input..

  • 16 years ago

    Around here, appraisers try to hit the offer price. Our place appraised for 195,000$ in February, and then 245,000$ in June. Both offers fell through due to buyers' financing problems. Given that, I would not consider an appraisal to be the final word on how much the place is worth.

  • 16 years ago

    Wow Margaret, congrats, you must be in a great part of the country where home values are actually going up!!! Good for you! Unfortunatley thats not the case out here, Even if we had offered 310k then deducted 44 for repairs we would be at 266k or if we went half way with repairs as we did from the start we would be at 290k over the appraised value which is not what we would really want to do in this town. The appraisal seems really fair forr our area, same size home in better condition on a 3.3 lot in the city, brand new kitchen and 10 yr old roof plus a carriage house sold for 265k. Anyway, time to move on...

  • 16 years ago

    Happy2bme, you didn't mention this in your op so I am wondering if you have your own RE agent? IME, a *good buyer's agent can be invaluable for negotiating in cases like this or in any case. The seller has representation and so should you.

    Good Luck in your home search!

  • 16 years ago

    laura- good catch, the listing agent does not participate in the mls, she is the listing agent and does not allow other agents in any way participate in any of her properties...this is why I did a inspection and appraisal before we made an offer, I knew the price of 320 was inflated, but I didnt know where to go from there with out making the seller mad at us for a ridiculous offer, so thats why we tried to educate ourselves the best we could before making an offer...

  • 16 years ago

    I'm not sure I understand the last - are you saying the listing/selling agent requires dual agency? 'she does not allow other agents in any way to participate in any of her properties' Is this legal?
    You have to deal with her personally and can't have an agent? Man what state do you live in? I thought this was pretty much gone everywhere if only fairly recently.
    I wonder - realtors? - whether you walk from the house or not - should she be reported to state realtors board? I only ask because I wonder if she's really doing her elderly client any favors. Maybe she is I don't know but you have to wonder. The fact that they changed out the oil tanks makes it sound like they are paying attention - curious situation.
    My math is usually pretty poor but 275 is 15% off listing? If you don't want to wait for the other house and there aren't many of these that you love as much maybe try that and tell the agent you'll wait for the other house if they don't accept.

  • 16 years ago

    the listing agent does not participate in the mls, she is the listing agent and does not allow other agents in any way participate in any of her properties.

    I don't understand this. How does it work? If you're a buyer with an agent and you see a house listed by this agent, what happens? I don't think you can just drop the buyer agent. Wouldn't the buyer agent protest?

    If this is actually allowed by the real estate industry (and it doesn't sound like it is), I can't see how this helps the seller given all the questions here asking if a bonus or increased percentage to the buyer agent is a good idea. If the buyer agent doesn't get any money from the sale, what would be their incentive to show the house to buyers?

  • 16 years ago

    Even if the agent does not participate in the MLS, which is her choice, she still needs to abide by all of the RE rules in regulations of the state she practices in. I would imagine that she would have to allow a buyer to have her own representation, but would not be required to share commission. In this case the buyer would need to compensate their own agent. I agree that an agent that does not participate in the MLS is not doing their clients any favors.

  • 16 years ago

    Yup- she has her own web site, she lists the property and will tell you right off the bat she works for the seller, not you. You do sign a dual agency paper. She does not allow other agents to show her properties. She writes up the contracts. No one has ever brought their own agent in on the deal. She has been in business for over 25 years. We are in upstate NY. Yes we would probably only go to 275k and thats it. Suposedly the seller said he will sell us the house but never came back with an counter offer. We are hoping this week we will hear something.

  • 16 years ago

    Ok, she has to abide by the laws of NYS. She cannot force you into dual agency, you are allowed your own representation. Get a good real estate attorney to look over the contract, and report her to the local RE Board.

    NYS Real Estate Laws

    NYS Board of Real Estate

    try_99 you had me at listed for 3 years and no price reductions I think you called it early!

    happy2bme your story sounds very implausible - "I want to buy a house for $150K more than any other house in my community, I was "forced" to use a Realtor-broker that is not on the mls, I have no representation and the agent won't "let" me have representation (she does work for the seller, not you), etc. What should I do?"

    If your story is in fact true, you report this Realtor, you submit a best and final bid after having a RE attorney review your contract, and you walk if they reject the offer. Do not under any circumstances get financing from anyone associated with this Realtor, do not use an inspector recommended by this Realtor, in other words, have nothing to do with this Realtor period. If you signed a dual agency contract with her already, find out from your Real Estate attorney if you can break this contract. If you cannot, run every piece of paper through your attorney.

  • 16 years ago

    It may be not so much that she won't "allow" you to have representation, but that she won't pay them a part of the commission. At this point you may be best served by an attorney anyway. And I would agree with xamsx not to use any inspector or lender suggested by her.

  • 16 years ago

    xamsx-Thank you so much for the advice. I think she has been in business so long in this town, no one has come to her with their own agent. I did sign the dual agency paper. I do have my own real estate attorney. Any inspector, appraiser etc she has reccomended I refused to use and went out of town for them and the roofer and the masonary contractor etc..and the seller being a trial attorney has refused to sign a disclosure form, so that is why I am also so adement on the inspection etc..when this agent saw the oil tank pipes coming out of the ground, she said not to worry they are fine. NOT I had my inspector go over everything then I had some enviromental company come out, now the seller has had them removed and the dirt around it, new oil tanks are in the basement and a certificate was given to the seller that the grounds are ok and negative of any oil spillage etc that will go to me if we should be the ones that get to purchase the home. Also the seller had some black box with a red light with a screetching noise coming out of it plugged in the upstairs hallway, we looked at the house 3 times and all 3 times we asked what is that thing? Agent said she didnt know? Inspector took one look at it and said "Oh thats to keep the bats out of the second floor" HUH??? So right from the get go I could clearly see the agent wasnt going to tell me other than what I could see about the house 7 bedrooms, 31/2 baths, office, den, lvg room, dinning room, kitchen and 3 car garage...the rest of the findings good or bad was going to be left up to me.. We will wait and see what the counter is, put in our best offer and then call it a day...Thank you again for all of your amazing help!!!