Please help me with my next offer
I submitted my really low offer, along with the short sale addendum suggested by the listing agent, who is also mine, and got a verbal rejection/counter.
My offer was a little less than 50% of what I think ARV would be. I think ARV will be $135-140K
This house is approx 1900sq ft. Comps for houses a little more than half the size (1000 and up) are available, and run from 89K to 135K in similar nearby neighborhoods. One 1238 sq ft house with 1 car carport around the corner in a better location sold recently for $126900.
This house is so large because someone took the large 2 car carport and turned it into living space. So where other houses have a carport or 2, or a 2 car garage, this has neither.
The agent said they really do not want to do a short sale. Neither do I, so that’s good.
In their verbal counteroffer, they said they will drop about 5K off, that they would rent it instead of selling, and now we’re only 91K apart.
I will have the agent tell them to put their counter in writing, as per the contract.
I did include a POF (that shows more than what my offer was) and a cover letter that includes that there are no inspections and no contingencies included, that I have funds available, that it will be owner occupied. This is a property that was listed about 5 months ago and has had 3 lookers, and only my offer.
In my counter to them (offer 2) I plan to increase my offer by about 5K, and include a list of the major repairs as I see them, but still not ask for either inspection period or contingencies. According to the agent, there are no recent comps to include, though there have been recent sales. I will ask for clarification.
The necessary repairs as I see them account for only a small fraction of the difference. I have been in a few houses in that subdivision, and just to bring it up to neighborhood standards on the inside will require about 40K, in my very uneducated opinion. Based on what I think I do know, just tiling the floor all the same and painting will be about 20K, the rest is remodel of kitchen, both baths, and the other work, as well as unforeseen problems.
According to the agent, they owe 12,000 less than the list price, and have only the one mortgage. If the house were in good condition, in today’s market, it would still not sell quickly at what they owe.
The agent that even if they rented it as is, its condition is so poor that any renter would destroy it further.
They bought in Nov 2004, when the market was still going up. Prices have fallen.
Any suggestions on my next offer?
Thanks,
you should work on condensing your message. I read it but it is too long to comment effectively. You seem to know what is going on, and if that is the case the excessive amount of information seems... excessive.
sorry, mark
The owners owe a very high amount to the lender and this will restrict your ability to negotiate until and unless the vendor has deep pockets to take the loss.
According to you this is not a foreclosure or a short sale. So who is going to take the loss? Definitely not the bank at this stage.
The gap in the asking price and your offer is so large that it will be impossible to close the gap by increments of $5000.
You should firstly condition the real estate agent as to where you are so that he can get you a realistic feed back from the vendor. Based on the feed back you should make up your mind if it worth your time and effort to pursue the deal.
Praveen
Thanks. the agent had been talking with them about doing a short sale. Since there has been so little activity, she wanted me to include that addendum so they might change their minds. Bad move on my part.
I will call her Monday and discuss it with her.
Thanks.
Ofgift
I think you make your next offer on a different house. From what you say this one is clearly very over priced. They're setting the price based on what they owe, which is absolutely irrelevant. These sellers are in fantasy land. Move on.
Thanks, Jon. I will.
Ofgift
Mark, this guy is asking for help. If you have a problem with the length of his post, then don't read it or comment on it. Please try to be helpful when answering someone.