OT home counter offering

NorthWillRiseAgain

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Dec 14, 2004
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Not sure if anyone would be able to help, but here it goes...

We like a house and just put in an offer. The house was originally overpriced considerably and has come down 70k over the last 120 days.

We put in an offer that was 82% ($230k) of the current price(which I feel is low, but was encouraged by realtor). The market in general is hot, but this house will need updates and is an older ranch house.

Seller countered with 10k off asking price, asking 96% ($270k)

I’m not sure where to counter next, as I’m guessing they seem a bit reluctant to reduce?
 

SkerinDallas

Redshirt Freshman
Feb 14, 2010
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Yeah, I would say you are in a good position. If they countered, they probably don't have any other offers. Split the difference and see where it takes you. If it's been on the market for 4 months at that price range, it was likely very overpriced.
 
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Wasker77

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Dec 23, 2014
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If you counter and the sellers counter a second time make sure your second counter is less of an increase than what your first counter was. Example: if your first counter is $10000 more than your initial offer then increase your second counter less than 10 grand. I noticed you got advise to close ASAP. I agree along as you protect yourself. I do not know you but I doubt if you spend close to $300K very often. I also don’t know your market, but my local market is really hot as most of Washington State is and I still would not buy a property without a home inspection contingency. Hire the best home inspector in your area. The Seattle market is so crazy people are buying homes for close to a million or more with no contingencies at all. I personally think this is crazy. Plus there are always those sellers that try everything they can to get out of their existing PSA because they are getting back-up offers for a lot more than the one they have already accepted.

Now is a great time to buy. Interest rates are low. Look at a 15 year fixed. Feel lucky you can buy a home for under $300K. Where I live a single family home in that price range is definitely a fixer.
 

Sinomatic

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Nov 15, 2017
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If you counter and the sellers counter a second time make sure your second counter is less of an increase than what your first counter was. Example: if your first counter is $10000 more than your initial offer then increase your second counter less than 10 grand. I noticed you got advise to close ASAP. I agree along as you protect yourself. I do not know you but I doubt if you spend close to $300K very often. I also don’t know your market, but my local market is really hot as most of Washington State is and I still would not buy a property without a home inspection contingency. Hire the best home inspector in your area. The Seattle market is so crazy people are buying homes for close to a million or more with no contingencies at all. I personally think this is crazy. Plus there are always those sellers that try everything they can to get out of their existing PSA because they are getting back-up offers for a lot more than the one they have already accepted.

Now is a great time to buy. Interest rates are low. Look at a 15 year fixed. Feel lucky you can buy a home for under $300K. Where I live a single family home in that price range is definitely a fixer.

15 year fixed? Just curious as to why? If the money is cheap why not just get a 30 fixed...you then have the option to not pay higher mortgage....after all you can always pay it off earlier.
 

SkerinDallas

Redshirt Freshman
Feb 14, 2010
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15 year fixed? Just curious as to why? If the money is cheap why not just get a 30 fixed...you then have the option to not pay higher mortgage....after all you can always pay it off earlier.

If you can afford the payment, 15 year is always better. You won't be paying near the interest up front that you would be with a 30 year. So, unless you pay the house off in 15 years with a 30 year, you will end up paying more. Might as well just go 15 if you're gonna do that.
 

redfanusa

First Team All-Big Ten
Feb 6, 2009
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If the house was originally listed at $350k, and they're down to $270k, I can see why they might be reluctant to go lower. Yes, they may have been massively unrealistic in their expectations, but there's not much you can do about that. Sometimes you run into an irrational seller, and just have to walk away.

I don't know what your budget is (none of my business). If you really, really love the place, then I would counter at $250k and see what they do. They might not budge, and that's fine. Just walk away. If you don't really love the place, then it might be time to bail as well. It sounds like you're a little bit caught up in the fact that it is a bargain, and that might be influencing your decision making too much.

If you do have a deal at a higher price, REMEMBER you can always go back after the inspection and ask for allowances. If the inspector says the roof is only at 10%, or the HVAC is going to go at any moment, or something else, you may be able to ask the seller to throw in $5,000 (or amount as appropriate) to defray some of the costs. We had a few minor findings with our house, and the seller threw in $3,000 to get it to close. Always hire the best home inspector you can. If there are any issues with the foundation, you may even want to pay out of pocket for a structural engineer.
 

TheBeav815

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You gotta decide if you want the house or you want the price. When we bought our house I was scared to death of getting it bought out from under us and I couldn't re-offer fast enough. In retrospect, I wish I had been a bit more patient and it might have saved me a lot of money.

I ended up re-offering like multiple times within the same day. Couldn't have been more obvious I didn't wanna lose the place. In fairness, they had already gone contingent on it before and it was move-in-ready.

If you wouldn't mind losing the sale, make them sweat when they counter. A couple days of silence will work them over a lot more than any number you can pick.
 

Lincoln100

Defensive Coordinator
Jun 16, 2010
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Both are stuck? That is never the case. I suspect you’re willing to budge, as are they. For instance, if you said “$260,000.00, final offer, take it or leave it, you’ve got 24 hours” I’m betting they take it. How does the price compare to the surrounding properties? If it’s relatively inexpensive, my guess is it is probably a good investment if you’re planning on staying a long while. If you love the location / area, I don’t know that you want to lose the house due to the updates it needs, because that can be done over time (I assume), and that’s not something that bothers me, but a wife might have a much different opinion.
 

Sodakred

Redshirt Freshman
Jul 31, 2018
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15 year fixed? Just curious as to why? If the money is cheap why not just get a 30 fixed...you then have the option to not pay higher mortgage....after all you can always pay it off earlier.
As you can see from the responses there are lots of opinions on this topic. With current rates at my credit union, the 30 year is about 3.8% and the 15 is about 3.3%. Like you I would rather have the peace of mind of the much lower 30 year payment, especially since I have the discipline to pay more on the principal each month.

BTW, I know a lot of people believe Dave Ramsey on the radio is the god of personal finance and he would probably recommend the 15 year option vs 30 always. I am sure he has many good ideas but I tend to think no one has all of the answers.
 

Sinomatic

Junior
Nov 15, 2017
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As you can see from the responses there are lots of opinions on this topic. With current rates at my credit union, the 30 year is about 3.8% and the 15 is about 3.3%. Like you I would rather have the peace of mind of the much lower 30 year payment, especially since I have the discipline to pay more on the principal each month.

BTW, I know a lot of people believe Dave Ramsey on the radio is the god of personal finance and he would probably recommend the 15 year option vs 30 always. I am sure he has many good ideas but I tend to think no one has all of the answers.

That's my view as well.

The 30 gives you the option of the lower monthly payment, you can ALWAYS pay the 15yr type of payment.

The percentage difference isn't a wide enough margin for me.
 

GretnaShawn

Graduate Assistant
Sep 28, 2010
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A note on home inspectors, I had ‘the best’ according to my realtor family member when we bought our first home. He did great and found a ton of stuff (it was an old house). And when we sold the house, the same inspector did that inspection and found a few more things that should have been caught when we bought the house. And then he did the inspection for the house we were going to.

The house we went to was a fixer upper. Like down to the studs fixer upper. We knew it when we bought it. He went over a bunch of stuff we pretty much knew. But he also missed a ton of stuff. Like a ton. Some not his fault, but some obviously missed stuff was. Long story short, we ended tearing the house down completely and building a completely new house. Including the foundation. (Don’t cry for me, it all worked out.)

So yes, home inspectors are a good idea. But they aren’t infallible. If I were to do it again, I would find out what their previous job was (usually a plumber or electrician, etc) and then get a second one done with one that has a different strength/background. They aren’t that expensive and they can save thousands (or hundreds of thousands).

Also, if this is a house you want to be in long term and you love it spend the money (if you can afford it). What does $10k mean to your mortgage? I’m sure I just have a bunch of people a heart attack. But that is only if you really love it and want to stay there. The value of the house depends on what somebody is willing to pay. If you find it worth it, then buy it. And you shouldn’t be worried about reselling it of you’re planning on being there for the long term.

However, if you are ‘meh’ on the house or not completely in love with it or want to sell it in a few years, then try for the deal.
 

T...Chafes

Senior
Oct 9, 2004
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My wife has been a realtor for about 15 years...I know that sometimes low offers can turn off sellers, as almost insults.

Move in dates, ease of transaction (cash vs financing, contingencies, etc), home inspections and other factors can sway a seller one way or the other. So basically the price you are offering may not be the only thing making the deal unattractive to the seller...
 
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NorthWillRiseAgain

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My wife has been a realtor for about 15 years...I know that sometimes low offers can turn off sellers, as almost insults.

Move in dates, ease of transaction (cash vs financing, contingencies, etc), home inspections and other factors can sway a seller one way or the other. So basically the price you are offering may not be the only thing making the deal unattractive to the seller...
I agree, and I think had more to do with contingencies than anything that held it back.

Price was more of just a deal with having to deal with our contingencies IMO.
 
Jun 5, 2020
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Two years ago, we bought a house and I would like to share my experience and how we negotiated the price for almost 12%. The house looked amazing, and we wanted to buy it, but just couldn't afford to pay $310000. One of my friends said that he knows a company that provides building inspection services, and they could help me. We hired them, and they found all the effects, and it gave us a huge negotiation power. If you want to know what company I am talking about, and would like to hire them for a Total Home Inspections, then check their site.
 
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dinglefritz

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Jan 14, 2011
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As you can see from the responses there are lots of opinions on this topic. With current rates at my credit union, the 30 year is about 3.8% and the 15 is about 3.3%. Like you I would rather have the peace of mind of the much lower 30 year payment, especially since I have the discipline to pay more on the principal each month.

BTW, I know a lot of people believe Dave Ramsey on the radio is the god of personal finance and he would probably recommend the 15 year option vs 30 always. I am sure he has many good ideas but I tend to think no one has all of the answers.
15 year versus fixed rate might depend a little bit on your time horizon to retirement BUT man 1/2 of one percent really adds up quickly. IF you're intent on building equity, 15 year is the way to go. The last home loan I took out was a 7 year fixed at 2.35% with a small balloon that I was sure we could pay off. The question for me right now is whether or not it's a good idea to be carrying debt or not. I think our economy is headed for whiplash. Homes are money pits and while they were always our parents' best investment I'm not sure that will be the case going forward. Between property taxes and maintenance they're expensive to own. Personally I favor owning the minimum reasonably nice home you can afford and then investing the rest in other vehicles. Long term I like good dryland farm ground. They aren't making any more dirt and the world's population continues to grow.
 

dinglefritz

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Jan 14, 2011
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Turns out, we stuck at 252k, seller is stuck at 265k, so we’ll let it sit for now. Sucks, as I do want it but it needs too much currently to pay that. Thanks for the input, I guess we’ll see if we get back in on it later.
Patience can work well in home negotiations. Unfortunately in this market the house might be gone tomorrow. As a rule most people over price their homes by about 10% and usually are not willing to go below that unless motivated by a cash offer. Cash is king.
 

TruHusker

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Sep 21, 2001
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You talk about all the work the house needs, that will add up quickly. I just did a kitchen and did everything except countertop and new cabinet doors myself and it was a lot of money, I was amazed at how it added up and it is not a huge kitchen. If you are buying a "fixer upper" that is one thing but if it needs a lot of work you can be talking 50k easily.

As for the difference in 15/30 year loans, I looked up current rates, yours may vary, but 15 year is 2.53 and 30 is 3.25 by a nationalise lender. payment is 1,336.40 versus 870.41 and total interest paid is 40,552 versus 113,348, which to me is huge. I always advise going 15. Human nature being what it is, people find a way to out off paying homes early and target that money elsewhere. What seems like a big payment now won't seem so big in 5-10 years.

One thing I have learned in buying homes both personal and rental is if I can't buy at my price point I walk and never look back.
 
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jmliehr

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Nov 1, 2009
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You talk about all the work the house needs, that will add up quickly. I just did a kitchen and did everything except countertop and new cabinet doors myself and it was a lot of money, I was amazed at how it added up and it is not a huge kitchen. If you are buying a "fixer upper" that is one thing but if it needs a lot of work you can be talking 50k easily.

As for the difference in 15/30 year loans, I looked up current rates, yours may vary, but 15 year is 2.53 and 30 is 3.25 by a nationalise lender. payment is 1,336.40 versus 870.41 and total interest paid is 40,552 versus 113,348, which to me is huge. I always advise going 15. Human nature being what it is, people find a way to out off paying homes early and target that money elsewhere. What seems like a big payment now won't seem so big in 5-10 years.

One thing I have learned in buying homes both personal and rental is if I can't buy at my price point I walk and never look back.

On the other hand if you were disciplined enough to invest the $467 monthly difference in the stock market and gained 5% average annual return you would have about $124K in 15 years and $390K in 30 years. Assuming home value appreciates at 3.5% annually the 30 year homeowner would have 124K in the market, 210K in equity and owe $125K at 15 years where the 15 year mortgage guy would have 0 in savings but would own his house with $335K in equity so we’re talking $1K difference. If we expand out to 30 years both have a house worth $560K, if mr 15 year invested his now freed $1336 a month for the next 15 years in stocks with 5% returns he’d have $359K in savings, but mr reliable 30 year kept plugging his $467 all 30 years and now has $390K in the bank coming out $31K ahead before we even begin to discuss his mortgage interest deduction should he be able to take it.
 

huskerfan66

Head Coach
Dec 8, 2004
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Not sure if anyone would be able to help, but here it goes...

We like a house and just put in an offer. The house was originally overpriced considerably and has come down 70k over the last 120 days.

We put in an offer that was 82% ($230k) of the current price(which I feel is low, but was encouraged by realtor). The market in general is hot, but this house will need updates and is an older ranch house.

Seller countered with 10k off asking price, asking 96% ($270k)

I’m not sure where to counter next, as I’m guessing they seem a bit reluctant to reduce?
Offer 250k and give them 6 hrs to respond
 

TruHusker

Offensive Coordinator
Sep 21, 2001
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On the other hand if you were disciplined enough to invest the $467 monthly difference in the stock market and gained 5% average annual return you would have about $124K in 15 years and $390K in 30 years. Assuming home value appreciates at 3.5% annually the 30 year homeowner would have 124K in the market, 210K in equity and owe $125K at 15 years where the 15 year mortgage guy would have 0 in savings but would own his house with $335K in equity so we’re talking $1K difference. If we expand out to 30 years both have a house worth $560K, if mr 15 year invested his now freed $1336 a month for the next 15 years in stocks with 5% returns he’d have $359K in savings, but mr reliable 30 year kept plugging his $467 all 30 years and now has $390K in the bank coming out $31K ahead before we even begin to discuss his mortgage interest deduction should he be able to take it.

"If" is the operative word. There is a road paved with great intentions and we know historically, people do not do as you have outlined. Likewise, the savings between 15 and 30 years is real, not presumed.
 
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