Real Estate Blog - "But that’s less than what they paid for it!" Is it really a LOWBALL?

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"But that’s less than what they paid for it!" Is it really a LOWBALL?

Yesterday I submitted an offer on a house for my buyers. The listing agent thought perhaps it was an April Fools' joke.

It wasn't.

The house has been on the market for almost 10 months. The current owners have only had the house for just about two years. So, for almost half the time they've owned the house they've been trying to sell it!

The offer was approximately 10% below the current asking price and 5% below the sold price two years ago when the market was hot. The current owners repainted the entire house in very bright colors. I know they've done some other work, but most of that was deferred maintenance. I did run a buyer's analysis and came very close to the number in the offer.

So, who's joking here? Just a few points I wish I could tell the sellers...

•1. The price you paid has nothing to do with the value in today's market.

•2. Things you consider improvements may be objectionable and unattractive to other buyers.

•3. If your house has been on the market for 10 months it may be time to consider a price reduction.

•4. It's an offer!

Another note... the house is almost vacant and has been for months. The heat is turned WAY down in most of the home. The listing says "motivated!"

Posted by Debbie White on 04/02/2008 11:34 AM

Comments (10)

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10 Comments on "But that’s less than what they paid for it!" Is it really a LOWBALL?

APR

2008

Listings containing the phrase " motivated" are that way for a reason ! Sellers have to come to grips with reality.

I am having a similar experience. We offered more than what the sellers (realtors) paid for the home 2 years ago -- and they have been sitting on the offer for a week! Obviously, they are NOT as motivated as they said they were.

To complain about an offer 10 months after it's initial list and call it motivated is somewhat, well, lack of a better word, ignorant. Maybe that's not the word but you know what I mean.

I have the same thing going on with me. Leave it to me to find the ONLY home that has appreciated in the last 2 years. However, I must say the listing agent is very professional and doing a superb job.

I think sellers are living in denial. They shouldn't let any offer pass them buy, because the buyers have many other homes to choose from.

Good luck with the offer Debbie. Did you submit your analysis with the offer? Sometimes you have to "help" the other agent. I was recently on the other side of the transaction. A propsective buyer offered $40K less (on a $190K listing) than the asking price. We had already reduced the property. The prospective buyer had determined his own comps using Zillow or something. I reran the comps here which indicated that we were indeed priced below the competition by about $30K. I sent them back to the buyer's agent who sent them along to her client. We'll see how things go.

Don

Bill - That's kind of what I thought!

Joan - Thanks for letting me know I'm not alone. Perhaps we should advise our buyers to move on.

Johnny - I can think of a few words, but I don't think they are allowed here ;-)

Audrey - While I do feel for the listing agent (the one they used when they purchased) I just want to scream!

Debi - Denial. That's it. Perhaps Johnny and I should switch to that word!

APR

2008

Boy, that's a familiar story. Selles still holding out hope of finding a buyer willing to pay late 2005 prices in early 2008. Hmmm, I see a problem with that train of thought. Good luck with that one, Deb.

We have a few sellers going to closing wiht cash to pay the difference! Real estate can sometimes not be any different than stocks! I purchased Lucent a few years ago at $53 a share and sold it for $2.75! Not every piece of real estate is going to appreciate!

Jesse - Glad to see you back. Yeah, the counter was a joke. Back to house hunting.

Jim - Some people haven't caught on. It's going to get better, but it may be a while.

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