JSDB
<3
Member since 1/13 1329 total posts
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Re: Bidding on a house you think may be overpriced
We bid on a bunch of overpriced houses (and looked at other overpriced houses) with varying results. Here's some of our experience -- sorry this may get long :)
House 1: we and my parents (who lived in the neighborhood) thought house, which was relatively new on the market, was overpriced and came up with a max amount we would pay for it ($50k less than asking). Our first bid was $100k less than asking with the hope that we would meet in the middle and end up where we wanted to be. As expected, sellers were offended by our offer but dropped their price about 25k which we still thought was overpriced. We came up 25k. We assumed we would continue inching toward the midpoint and end up at our max price, but they came back to us and said they werent sure they really wanted to sell and needed time to think on it. We moved on to other houses eventually and they never got back to us. 9 months later the house ended up selling for $5k more than what we were willing to pay for it, so maybe it wasn't as overpriced as we thought but we were very close.
House 2: This house was also relatively new to the market, similar in size and style to house #1 and priced the same as house #1 but needed substantially more work inside, although it had great curb appeal. We liked it initially but upon going back with my parents were scared away by how much work it really needed and the asking price, which we thought was way way overpriced. We considered making an offer but knew it would have to be much much lower and the seller made it clear he was firm on price so we didnt bother. We went back to see it again a month later and again were scared off by the price and how much work it needed. The realtor was clearly getting desperate as she called us after our second visit and basically begged us to put in an offer, any offer, and told us to completely disregard the asking price. I think she was trying to give the seller a reality check. But, we couldnt really come up with an offer we would make on that house -- we thought it was overpriced by at least $100k, maybe more, and kept looking. It did end up selling 11 months later for $105k less than what the seller was "firm" on when we saw it.
House 3: House #3 was again overpriced. (see a pattern here?). It was listed for $50k more than houses 1 and 2, but for various reasons was probably worth $50k more than house 1. We figured that like house 1, it was about $50-60k overpriced. So, again, we put in an offer of $100k less than asking. (DH and I found it entertaining at that point). Seller was offended but realtor was more realistic, she knew home was overpriced and I dont know how much of it was an act, but supposedly kept trying to work on the seller and seller did come down on price. (Realtor told us house was originally listed much higher 2 years earlier with another company, got what realtor thought was a great first offer but not close enough to asking for seller so it was rejected, and never got anything close since. House relisted with a new realtor at a more reasonable price but per realtor seller had unrealistic expectations). We ended up negotiating back and forth for a few weeks, inching up and down and getting closer to a midpoint. Just as we were about to agree on a price -- about $55k less than asking and we were something like $2,500 apart -- we stumbled across another house we liked better and could get for a much better price, and ended up walking away. Probably a good thing we did because house 3 sat on the market for 13 months lafter that and then sold for $27k less than what we were about to buy it for.
House 4: our house. We didn't offer $100k below asking this time, but our house had originally been listed for $200k more and was on and off the market for 2+ years. By the time we got around to it seller wanted to sell and we wanted to buy and we agreed on a price in 24 hours ($25k less than asking). There werent really any comps as it was substantially larger than most houses in our area, but needed a lot of work (and the only equivalent houses in size and style were nicely renovated). My parents and the realtor across the street think we got it for a great price, we think we probably got it for a fair price considering the work it needed, but we got it for A LOT less than it was originally listed for.
You really do need to pinpoint an actual value for it, and not a 100k range. Message me if you want to talk more -- I am not a realtor
Message edited 5/16/2014 12:48:24 PM.
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