Is This Negotiation, or Being Punked?
November 4, 2011 8:21 PM Subscribe
Is this a game of real estate chicken or what?
My husband and I recently put an offer in on a house.
(We own a house already, but we bought it from people we knew, FSBO, so there was no real estate agent involved, and no real negotiations.)
The house is listed on MLS for $100,000. We decided to offer asking, less a rebate for closing costs, so our net offer was $97,000. We had discussed this with our mortgage agent, so she wrote our pre-approval letter with $100,000 as the amount to be financed.
The seller counter offered $110,000. No concessions, no rebates, and 10% more than the listed asking price. The seller also expressed concern that we had only been pre-approved for $100,000, but the letter was written this way because we discussed the asking price and our offer with the mortgage agent- we could have had the letter written for more or less as needed.
We are baffled by the seller's counteroffer. Is this normal, or is the seller playing chicken with us, or what?
A friend offered a theory that the seller has had a change of heart and is just waiting out the contract with the real estate agent, but we found this confusing as well- couldn't the seller just take the house off the market? Can a contract with a real estate agent actually obligate you sell a house that you don't want to sell? (And, I think this is pertinent, the seller actually has moved and lives out of state now, so it's not like selling the house is going to mean being homeless.)
I'd love any insight from someone who is more experienced with real estate dealings, because we are utterly confused by this seller's actions.
My husband and I recently put an offer in on a house.
(We own a house already, but we bought it from people we knew, FSBO, so there was no real estate agent involved, and no real negotiations.)
The house is listed on MLS for $100,000. We decided to offer asking, less a rebate for closing costs, so our net offer was $97,000. We had discussed this with our mortgage agent, so she wrote our pre-approval letter with $100,000 as the amount to be financed.
The seller counter offered $110,000. No concessions, no rebates, and 10% more than the listed asking price. The seller also expressed concern that we had only been pre-approved for $100,000, but the letter was written this way because we discussed the asking price and our offer with the mortgage agent- we could have had the letter written for more or less as needed.
We are baffled by the seller's counteroffer. Is this normal, or is the seller playing chicken with us, or what?
A friend offered a theory that the seller has had a change of heart and is just waiting out the contract with the real estate agent, but we found this confusing as well- couldn't the seller just take the house off the market? Can a contract with a real estate agent actually obligate you sell a house that you don't want to sell? (And, I think this is pertinent, the seller actually has moved and lives out of state now, so it's not like selling the house is going to mean being homeless.)
I'd love any insight from someone who is more experienced with real estate dealings, because we are utterly confused by this seller's actions.
Response by poster: The agent told us that ours was the first/only offer made. I don't know if the agent is allowed to lie to us, though.
posted by Leta at 8:39 PM on November 4, 2011
posted by Leta at 8:39 PM on November 4, 2011
I am not a real estate agent or anything but in my experience that is the real estate equivalent of f u. Like they are so insulted and horrified by your offer they counter offer higher. Which makes no sense over $3K but people are stupid. It's also possible the sellers are fine but their agent is stupid. When I bought my house I actually called the sellers directly. They had no idea the shenanigans their agent was pulling and they put a pretty quick stop to it.
Also in my experience agents and brokers lie to you all the time, they also talk to each other about stuff they're not supposed to. If something smells shady, it probably is. Buyer beware and all that.
posted by fshgrl at 8:41 PM on November 4, 2011 [9 favorites]
Also in my experience agents and brokers lie to you all the time, they also talk to each other about stuff they're not supposed to. If something smells shady, it probably is. Buyer beware and all that.
posted by fshgrl at 8:41 PM on November 4, 2011 [9 favorites]
Here (in Canada), I was told that if a prospective buyer offered the asking price, and that the seller refused it, the seller had to pay the same commission to the real estate agent(s) as though the sale had gone through - my understanding was that, in effect, the real estate agent(s) had done their job and they were thus owned what was agreed upon in the contract.
For the sake of $3000, I would just call their bluff and offer the asking price.
As for why they did this... perhaps they had a change of heart ... or perhaps they have another offer in the wings from someone they know, and which bypassed their real estate agent and they are looking at getting out of the contract they sign with that agent...
posted by aroberge at 8:51 PM on November 4, 2011 [1 favorite]
For the sake of $3000, I would just call their bluff and offer the asking price.
As for why they did this... perhaps they had a change of heart ... or perhaps they have another offer in the wings from someone they know, and which bypassed their real estate agent and they are looking at getting out of the contract they sign with that agent...
posted by aroberge at 8:51 PM on November 4, 2011 [1 favorite]
Response by poster: Huh. My impression of this real estate agent has been pretty good, but this is just so weird that I have no decent gauge of who (if anyone) is the trustworthy party here.
posted by Leta at 8:52 PM on November 4, 2011
posted by Leta at 8:52 PM on November 4, 2011
I have complete contempt for people who act like this, and I don't doubt you'd be in for some nasty surprises about the house's condition if you did buy it, given their determination to take advantage wherever they find it.
I'd send them a note saying 'How novel to find ourselves bidding against the seller! Congratulations; as far as we are concerned, you've bought yourself a house." and then not respond to any further communication.
posted by jamjam at 8:57 PM on November 4, 2011 [19 favorites]
I'd send them a note saying 'How novel to find ourselves bidding against the seller! Congratulations; as far as we are concerned, you've bought yourself a house." and then not respond to any further communication.
posted by jamjam at 8:57 PM on November 4, 2011 [19 favorites]
I'm selling a house right now, and the frustration level is at a max, i know how the seller feels, that "rebate" stuff is an insult, like I can't figure out that a 100k offer with a 3k "rebate" isn't just an offer for 97k!
You offered 3k less than the asking price. They are telling you, nope, we're not accepting that, now our price is 110k.
If you really want the house, and it's worth 100k, make the offer without the "rebate", if it's not worth that to you, the seller has sent the message that, "hell no, you can't have it at that price!"..
posted by HuronBob at 8:57 PM on November 4, 2011 [1 favorite]
You offered 3k less than the asking price. They are telling you, nope, we're not accepting that, now our price is 110k.
If you really want the house, and it's worth 100k, make the offer without the "rebate", if it's not worth that to you, the seller has sent the message that, "hell no, you can't have it at that price!"..
posted by HuronBob at 8:57 PM on November 4, 2011 [1 favorite]
Just an idea could it have been something as simple as a Typo? Is the seller a flipper with more than one property on the market and confused prices? Or have they recently dropped the price and forgotten. Just bought a house from a flipper who had only dropped the price the week before and she was a pain at negotiating as she kept saying I just dropped the price, and we're like not our problem, we're offering on the the price you are asking not what it was last week, what it was before is not our problem.
If they aren't dropping I'd suggest it was a big FU and to just walk away. We had to do that to 2 houses that just weren't open to negotiations, though we came in with a waaaay lower offer than yours and the sellers refused to even budge on price at all, we may have deserved it (85K offer on a 100K house - well it had been for sale for over a year). It's a buyers market and how ever much you like this house there are heaps more out there.
posted by wwax at 9:01 PM on November 4, 2011
If they aren't dropping I'd suggest it was a big FU and to just walk away. We had to do that to 2 houses that just weren't open to negotiations, though we came in with a waaaay lower offer than yours and the sellers refused to even budge on price at all, we may have deserved it (85K offer on a 100K house - well it had been for sale for over a year). It's a buyers market and how ever much you like this house there are heaps more out there.
posted by wwax at 9:01 PM on November 4, 2011
Response by poster: Yeah, I went against my better instincts with the rebate thing. The mortgage agent talked us into it. It's an FHA loan, and apparently this is just how they work. We could get a conventional mortgage, but the FHA down payment was so small that we went for it.
But, honestly, I don't really understand the offense over offering 3% less than asking. We very sincerely felt we were making a reasonable offer, and I don't really think we got a reasonable response.
And, no, unfortunately, there is no way it could have been a typo.
I'd be fine with paying another $3K, but with this wacky-ass response, we are both really hesitant to submit another offer of any kind.
I am "eh" about the house itself, this is all about location, location, location. In that aspect, we won't find a more perfect spot for us. But I'm not offering $10K over list price, especially not now.
posted by Leta at 9:08 PM on November 4, 2011 [1 favorite]
But, honestly, I don't really understand the offense over offering 3% less than asking. We very sincerely felt we were making a reasonable offer, and I don't really think we got a reasonable response.
And, no, unfortunately, there is no way it could have been a typo.
I'd be fine with paying another $3K, but with this wacky-ass response, we are both really hesitant to submit another offer of any kind.
I am "eh" about the house itself, this is all about location, location, location. In that aspect, we won't find a more perfect spot for us. But I'm not offering $10K over list price, especially not now.
posted by Leta at 9:08 PM on November 4, 2011 [1 favorite]
If it makes you feel better I was heartbroken when we couldn't get the first house we wanted to even consider negotiating but a couple of months later we found a much nicer house for the price we wanted in a great area so in the long run I'm glad it happened.
I'd walk away if the seller is being such a dick this early on god knows what other tricks he is going to pull, because a 97K opening offer on a 100K house seems very reasonable to me. If you'd said you loved the house then I'd have said just suck it up and offer the 100K but as you seemed a bit meh on it I'd suggest moving on. Not that I'm a huge house buying expert, I've only bought 2 houses in my life(in 2 completely different markets & countries) so make of my comments that what you will. Good luck with the house hunting.
posted by wwax at 9:18 PM on November 4, 2011 [1 favorite]
I'd walk away if the seller is being such a dick this early on god knows what other tricks he is going to pull, because a 97K opening offer on a 100K house seems very reasonable to me. If you'd said you loved the house then I'd have said just suck it up and offer the 100K but as you seemed a bit meh on it I'd suggest moving on. Not that I'm a huge house buying expert, I've only bought 2 houses in my life(in 2 completely different markets & countries) so make of my comments that what you will. Good luck with the house hunting.
posted by wwax at 9:18 PM on November 4, 2011 [1 favorite]
What am I missing here? A buyer insulted by an offer that is $3000 lower than asking price? In a time when houses can be on the market for years without selling, your offer was not an insult, it was a gift.
My theory: by offering pretty much their asking price, you signaled that you REALLY want the house. So they thought, "hmmm, they must really want it. Maybe we can get another 10k out of them."
posted by jayder at 9:19 PM on November 4, 2011 [5 favorites]
My theory: by offering pretty much their asking price, you signaled that you REALLY want the house. So they thought, "hmmm, they must really want it. Maybe we can get another 10k out of them."
posted by jayder at 9:19 PM on November 4, 2011 [5 favorites]
Dear seller, thank you for your considerate counteroffer. Based on your asking price of $100k, our final offer is $94k.
posted by cogat at 9:23 PM on November 4, 2011 [25 favorites]
posted by cogat at 9:23 PM on November 4, 2011 [25 favorites]
Response by poster: What am I missing here? A buyer insulted by an offer that is $3000 lower than asking price? In a time when houses can be on the market for years without selling, your offer was not an insult
This is *exactly* how we feel about it! Right down to the "what are we missing?" part. This house has only been listed since May, so it's not like it's been for sale for an extraordinary length of time, but we made our opening offer in good faith.
We are not in a bad position here. We don't have anything invested other than our time. So no worries there.
Thanks, everyone, for your responses. I felt like such a bumpkin- Duh, what? is not a good feeling to have in business transactions. Good to know that the seller's response truly was odd.
posted by Leta at 9:28 PM on November 4, 2011
This is *exactly* how we feel about it! Right down to the "what are we missing?" part. This house has only been listed since May, so it's not like it's been for sale for an extraordinary length of time, but we made our opening offer in good faith.
We are not in a bad position here. We don't have anything invested other than our time. So no worries there.
Thanks, everyone, for your responses. I felt like such a bumpkin- Duh, what? is not a good feeling to have in business transactions. Good to know that the seller's response truly was odd.
posted by Leta at 9:28 PM on November 4, 2011
I want to change my long winded post to be just what cogat said.
posted by wwax at 9:30 PM on November 4, 2011 [1 favorite]
posted by wwax at 9:30 PM on November 4, 2011 [1 favorite]
This house has only been listed since May, so it's not like it's been for sale for an extraordinary length of time
That's a pretty long time. They should have taken your offer. It's not chicken, they don't want to sell. Screw them, you made a solid offer and they said no. Walk away.
posted by bitdamaged at 10:06 PM on November 4, 2011
That's a pretty long time. They should have taken your offer. It's not chicken, they don't want to sell. Screw them, you made a solid offer and they said no. Walk away.
posted by bitdamaged at 10:06 PM on November 4, 2011
Response by poster: Holy shit, you guys, I was just dicking around with some mapping and real estate sites, trying to get a bead on the going rate out there (it's a very rural area, so not a lot of houses in the immediate vicinity) and I was Googling the addresses that popped up within a three mile radius.
It turns out, the house we made an offer on is 1.5 miles away/two houses down from an address that, inexplicably, has three adult men living it, all with various last names, all three of whom are on the the SOR for criminal sexual conduct with a child under 13.
I have little kids.
So now I'm starting to think that maybe this was the universe just doing me a solid.
I'm just going to consider this a bullet dodged and move on. And be sure to do my due diligence next time. Sweet christ on a cracker.
posted by Leta at 10:45 PM on November 4, 2011 [14 favorites]
It turns out, the house we made an offer on is 1.5 miles away/two houses down from an address that, inexplicably, has three adult men living it, all with various last names, all three of whom are on the the SOR for criminal sexual conduct with a child under 13.
I have little kids.
So now I'm starting to think that maybe this was the universe just doing me a solid.
I'm just going to consider this a bullet dodged and move on. And be sure to do my due diligence next time. Sweet christ on a cracker.
posted by Leta at 10:45 PM on November 4, 2011 [14 favorites]
Yeah, bullet dodged.
I hate offering on houses. A good part of that is because it's a business transaction--and no one selling ever views it as such. If I offer you $80K on your $100K house, I'm not saying you're a bad person, I'm saying your house is worth $80K to me today. It's an offer. It's worth responding to, even if it's just underlining your asking price. Maybe I'm testing the waters, maybe you can assuage my fears of the bad well or maybe I'm just a cheapskate.
Sounds like your sellers are set to chase the market down. There's a house up the road the seller started at $1.4M - he could have got $900K, then, I think. He has relentlessly chased the market down, and is now at $650K, on a place which would assuredly sell in the $500s. But he has lost at least $400K plus mortgage payments plus opportunity cost by not recognizing which was the wind was blowing.
posted by maxwelton at 12:50 AM on November 5, 2011 [1 favorite]
I hate offering on houses. A good part of that is because it's a business transaction--and no one selling ever views it as such. If I offer you $80K on your $100K house, I'm not saying you're a bad person, I'm saying your house is worth $80K to me today. It's an offer. It's worth responding to, even if it's just underlining your asking price. Maybe I'm testing the waters, maybe you can assuage my fears of the bad well or maybe I'm just a cheapskate.
Sounds like your sellers are set to chase the market down. There's a house up the road the seller started at $1.4M - he could have got $900K, then, I think. He has relentlessly chased the market down, and is now at $650K, on a place which would assuredly sell in the $500s. But he has lost at least $400K plus mortgage payments plus opportunity cost by not recognizing which was the wind was blowing.
posted by maxwelton at 12:50 AM on November 5, 2011 [1 favorite]
Other matters aside, you made an offer for $97k. They countered with a price higher than the asking price.
That's not a real offer. If they were serious about wanting to sell this to you, they'd have made a counter between your $97k and the $100k list price. A seller raising his price once negotiations have started is a sign that they aren't negotiating in good faith.
F*ck 'em.
posted by valkyryn at 4:54 AM on November 5, 2011 [1 favorite]
That's not a real offer. If they were serious about wanting to sell this to you, they'd have made a counter between your $97k and the $100k list price. A seller raising his price once negotiations have started is a sign that they aren't negotiating in good faith.
F*ck 'em.
posted by valkyryn at 4:54 AM on November 5, 2011 [1 favorite]
I had some weirdness buying a house years ago and the selling agent eventually suggested (off the record of course) that we walk, because the owners were getting divorced and one half didn't really want it to end and selling the house was sort of the final thing to happen before the relationship was completely dead. He was concerned that we might need the sheriff to get her out of the house.
So you never know what is going on...
BTW, 4 years later when we moved again I listed my house with that agent. One good turn deserves another.
posted by COD at 6:39 AM on November 5, 2011 [1 favorite]
So you never know what is going on...
BTW, 4 years later when we moved again I listed my house with that agent. One good turn deserves another.
posted by COD at 6:39 AM on November 5, 2011 [1 favorite]
FHA loan? Maybe the seller doesn't want an FHA inspection on the record??? Good luck finding the right home!
posted by Lesser Shrew at 6:50 AM on November 5, 2011 [2 favorites]
posted by Lesser Shrew at 6:50 AM on November 5, 2011 [2 favorites]
If the molester angle hadn't appeared, I would just counter their counter with a lower amount like $95,000. If they are playing mind games, that's how you win. I think the person who said that since they got nearly their asking price, they wanted to see if they could squeeze you for more, is correct.
posted by gjc at 9:31 AM on November 5, 2011
posted by gjc at 9:31 AM on November 5, 2011
I wonder if the seller knows you have kids and countered crazy to deter you.
posted by Feisty at 11:15 PM on November 5, 2011
posted by Feisty at 11:15 PM on November 5, 2011
Could the sellers just be inexperienced?
When we were selling for the first time, we got a good offer on our house. We kind of panicked and counter-offered, but perhaps we should have accepted, as the entire market went cross-eyed and fell over dead a few months later. This was a Learning Experience for us as sellers, quite obviously, but those buyers were the ones penalized.
posted by wenestvedt at 7:42 AM on November 8, 2011
When we were selling for the first time, we got a good offer on our house. We kind of panicked and counter-offered, but perhaps we should have accepted, as the entire market went cross-eyed and fell over dead a few months later. This was a Learning Experience for us as sellers, quite obviously, but those buyers were the ones penalized.
posted by wenestvedt at 7:42 AM on November 8, 2011
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posted by JimN2TAW at 8:36 PM on November 4, 2011