Emily -

Just because permits weren't pulled doesn't make the basement useless.  Your buyers will be able to benefit from the work that was completed so it shouldn't be completely removed from your comp figures.

Don't present too much to the sellers, they could feel like you are insulting them further and be unwilling to negotiate.

Also, guide your buyer, ask them if they "really want THIS house" or "really want a good deal" and work from there, don't be afraid to work on your buyer as much as the seller.

Emily,

Ryan gave you some good advice above.

Others ways to strengthen an offer at times (other than price) can be additional terms, i.e. the term of the escrow, since the sellers have already moved, they could be making payments on two homes = more expense. The possibility of shortening contingency periods (providing you have them) the amount of the earnest money deposit are a few examples. It's not always just the price.

Good luck and let us know your outcome.

Remember, it isn't always the price. Especially for those seller that have to move for one reason or the other. The terms are to be looked at seriously, ie. cash vs mortgage, house to sell, the date that it will close, sooner is always for the most part better that later, flexibility on this is good.  You need to look at the "whole picture"

Good Luk,

Patricia Aulson/Seaciast/NH,ME/MA 

Emily,

I am not sure what customs you have in your area, but it would be greatly off-putting to me to receive a letter for my sellers with those elements you just described. 

Instead, I would focus on your buyer's ability to close cleanly and quickly.  After all, the sellers are sitting and waiting for a sale which may never happen; the current buyers may not be able to sell their house.

If you still want to include a letter, focus on the positive.  Instead of pointing out that the permits that were not pulled on the basement, tell the sellers that your buyers have made a thorough investigation of the improvements and accept its status.  Even describe what your buyers love about the property.  Sellers can be more emotional than you may think.

I believe your instincts are correct about reframing the offer without asking for improvements.  Tell your buyers to consider that in the purchase price.  And again, sell it as a clean, easy-to-accept offer.

Also, I would not include the comps to the sellers, but offer your work to the listing agent as reference for her or him to use.  Which brings up another qurestion... have you talked to the listing agent?  What can she or he tell you about what type of offer would benefit the sellers?

I think your buyers are in a stronger position than it looks at first glance.  If your buyers do not need to sell a house before closing, well, you know what they say about "a bird in the hand....."

The term back up offer comes to mind as the seller probably cannot rescind once accepting that contingent offer unless there is a right of first refusal in that contract. 

Are the first buyers paying cash from the proceeds from the sale of their house?  It seems with the information provided, the other contract will not close due to the inability to appraise.  

You may want to submit an offer that is attractive to the seller, but it seems if you are offering more than it is worth, your buyers may end up in the same situation the current buyers are heading towards.  Assuming your buyers know the value of that house, are they willing to pay the cash difference between sales price and appraisal price?  I haven't seen that in a few years since doing real estate in Vegas.   

In today's market, there are plenty of home for sale that will more than likely fit your buyers needs.  This is really our best time, as buyer's agents, to get the best purchase price for our clients.  I feel, and let me reiterate, I Feel, there is no reason we should be making any offers over current market value. 

Good luck and have a Fabulous Real Estate Day!!!

I think all of these suggestions are GREAT!! 

JOY - I am going to just give the comps and the letter to the listing agent instead of submitting it to the sellers.  And I am going to get the buyers to reframe the offer.  I think I will also tell them what the buyers really like about the house!

I stopped by maybe a bit after the fact.  You can use some of your information.  Interior modifications by the seller that are not structural usually do not require permits.  So as others have advised the quality of the work may not be to professional standards but can not be dismissed if it looks good.  The inspection would give you a clue. 

The real bargining power is terms...you can get a lower price with better terms.  Consulting the buyers could give you the discount you want based on time value of money.  Nice post Emily...give us and update.

it's a little cheesey, but you might consider having your buyers write a short note about why they want the house.  I once had buyers win in a "tie" situation (though both below asking) because they were newlyweds buying their first home, just as the sellers had been.  Sometimes if they're more comfortable with where a house is 'going' they're willing to give a bit more. 

Hi everybody - Okay, we revised the offer and submitted it and were rejected within fifteen minutes.  That's not a good feeling to have put so much time and thought and effort into writing the contract in a way that it would be the "least offensive" and also a very fair price.  I did not enclose a letter - I did enclose comps for the realtor only.  Oh well. 

Emily,

Hold your head up high; your gave your client your full attention to making the offer work.  They were well represented.

We cannot always know what is in the mind of the seller or the advice that they are given.  But, if we try to think for them, and suppose we know the answer, our clients can lose.  We must try our best whenever the client wants us to represent them.

Well done, Emily! 

Joy
joy@northwestelegance.com

JOY - Thanks for the support!  I really appreciate your advice and follow-up!

Emily,

In my opinion, your clients have the upper hand in that rejection.  According to your extensive research on those comps, they could have been tied up for a month with a property that would not have appraised. 

Now Emily, put on that positive energy cap and find a home that they can get below market.  I'll be talking with you soon!  I hope.....  

Hope you had a filling Turkey Day! 

Yes Emily, Its true, working with buyers,however sincere, who are not ready to close for any reason is difficult. Working with buyers with a home sale contingency is brutal. I have three buyers now that I have had their homes on the market for more than a year. Their home are priced below appraisals, and still no go.SO why would anyone accept an offer from them that might in any way tie up their property. Even with a right of refusal. On the letter of refusal, please have an attorney or very experienced agent draw one up to fully go thru all the kick outs. Its amazing how many loopholes are in a badly constructed contract addendum such as this.    Further, nothing you do in Real Estate is a waste of time if you are learning from it. I assume you are representing the-buyers on their home sale, maybe you should start there & work all out to get a solid offer on the first house, then you can go shopping without contingencies....Best Wishes

Emily,

Sorry I missed this one. There are several things that I look at when I evaluate an offer from a buyer, The price is usually the last. (unless it is an obvious "lowball", which doesn't seem to be the case here.) I think you did everything as well as could be expected under the circumstances. How much help was your OM or your Broker in helping you. I often run these types of things by them when I have a doubt.

Talk to you soon and good luck with these buyers, (I would KILL to have a buyer to work with right now. :) )