knowing when to accept an offer

clumsycookJune 23, 2011

My DH and I listed our house on June 1st. We are planning to build and our current house and new lot will be completely paid for next month. We have had two showings and one offer. That sounds great in this housing market, but we are not sure if we should accept the offer. Our house is listed for $98,500 and the offer is for $85,000. I know we can't expect full asking price, but this seems like a huge reduction for a house that was just listed. It is certainly one of the nicest in its price range for our area, but it does happen to be the nicest house in a not so nice neighborhood (other houses are older, smaller and on less private and smaller lots). We are afraid that if we keep giving counter offers, the prospective buyers may be turned off and go elsewhere. They started out with an offer of $85,000, and we countered with $90,000. However, we paid $66,500 eleven years ago and have put around $17,000 in and tons of sweat equity. I know with this time span, some of this work could be considered just upkeep. This is so hard, especially since this is our 1st home sale. I am a teacher though and would love to sell this house and move into a rental quickly before school starts back. I hate the thought of having the keep the house perfect for possible showings with my hectic schedule. I just don't want to miss out on extra equity that can be used to help pay for our dream home. Can anyone offer advice?

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cas66ragtop

I would have countered at $95k - and if they countered again with $90k I would have probably accepted it. You countering at $90k may make them counter again at $87.5k - but of course you don't have to accept it. I have no idea what your house is worth, you could very well be at a very fair asking price to begin with. Even if your house is already a bargain, there are people out there who will still try to get even more of a bargain. It's up to you to decide if this is a fair offer. If you do sell it, at least its out of your hair and you can go on with your life.

    Bookmark   June 23, 2011 at 8:24AM
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maurenemm

I think you have to start the house selling process with a value in your head of what you WANT to sell the house for. And then have another which is what you're WILLING to sell it for. And then when you get offers below what you're willing, evaluate is it work $XXX amount of money to me to just get the house sold now? All of this is assuming you've started out with a good list price.

Also, I found it really interesting to see for houses that sold recently in the area, how did the sales price compare to the list price. Around me, I saw that houses generally sold for 95% of list price.

So, if your list price is on target, I think I'd be very reluctant to accept less than $90K and perhaps would've countered a bit higher. But only you can decide if it worth a few thousand dollars to get is sold NOW rather than later.

    Bookmark   June 23, 2011 at 8:36AM
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Billl

"Can anyone offer advice?"

None of the stuff you listed : what you paid, the work you did, what the list price is etc. have anything to do with what a fair sales price is.

If your realtor hasn't done so already, have her pull all of the recent sales data for comparable homes in your area. A "fair value" will be in line with what other comparable homes are selling for. If homes are only selling for $85k, then just take the offer and move on. If houses are selling for $95k, then don't accept $85k unless you really, really want to move quickly.

    Bookmark   June 23, 2011 at 8:47AM
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cearbhaill

All that matters is how badly you want to sell and what it is worth to you to move onto the next chapter of your life now.

How hard would you kick yourself if you lost this deal over $5K?

    Bookmark   June 23, 2011 at 11:24AM
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weedyacres

I'm not sure that the selling-to-listing price ratio is very relevant. People can list at all sorts of insane prices.

Another way to evaluate whether it's worth it to you to sell now is to pretend you're just living in the house, not selling it. If someone offered you $5000 to keep the house in perfect condition every day for 3 months, would you do it?

    Bookmark   June 23, 2011 at 1:13PM
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clumsycook

Thanks for all of the advice. Well, our community is pretty small so it is hard to find true comps that have sold recently. I searched the county records from Jan. 2010 to present. I found 19 homes that have sold with around the same square footage. I eliminated three that sold for less than $30,000 because I assumed their condition to be horrible. I also eliminated homes that were sold with additional acreage, as my home sits on a one acre lot. I found an average sale price for the remaining homes, and I came up with a figure of $80,972. I can't be certain of the condition of these homes. Compared to what is listed on the market now, my home is in much better condition. Yet, it looks like an offer of $85,000 is not too bad.

Also, this may be strange, but the potential buyer sold us the house 12 years ago. He and his wife are wanting to move back to town and downsize. He knew we made improvements, and could see pics online, but he made an offer before taking a step inside our home which I thought was unusual.

I guess making improvements and having an immaculate home will not get you top dollar in this market, but I guess it will help get your home sold fast. We are ready to move on, and I know how blessed we are to break even instead of taking a major loss like so many others have.

    Bookmark   June 23, 2011 at 3:35PM
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sweet_tea

I think your comps should only look at sales in the past 6 months or past 12 months if not enough homes to compared that sold in past 6 months.

I think your buyer has an emotional attachment to the home. HELLO? I think you should stick with your $90k or maybe go to $89k at next round just to make a concession if you must. the buyer wants this home because they lived there before. They don't want a competing home..THEY WANT YOUR HOME, IT HAS A HISTORY TO THEM!!! NO OTHER WILL DO. this is why the offer came before they went inside.

    Bookmark   June 23, 2011 at 4:04PM
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cas66ragtop

Maybe the original owners hid hundreds of thousands of dollars inside the walls? Or in mason jars in the back yard? Woohoo - you may be sitting on a gold mine and don't even know it! Haha

Kind of strange to make an offer w/o even looking at it first (even if it does have sentimental value). I would definitely stick to $90k - sweet tea is right - they WANT this house really bad. You gotta play this very carefully......you don't want to get too greedy and have them walk, but you also don't want to give into them too much.

In the meantime, you might want to get yourself a metal detector and see whats in the back yard!

Good luck

    Bookmark   June 23, 2011 at 5:01PM
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deaniesue

Agree with above posters. I would stick to 90k or go to 89k. The house hasn't been on the market long....worse case scenario they walk...but doubtful. They want "their" house back.

Don't be greedy, but don't leave money on the table.

    Bookmark   June 23, 2011 at 7:40PM
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adellabedella_usa

You aren't losing money. You have a goal of being settled someplace before school starts. You don't want the stress of keeping up the house for showings. You have buyers that are most likely not going to back out at the last minute. Not having better comps, I would be tempted to take the offer and run. If you lose these buyers, how long is it going to be until you get your next buyer? The house may sit because potential buyers may think you are priced too high. In the grand scheme of life, $5000 isn't that much money. I think you could do a lot worse.

    Bookmark   June 24, 2011 at 10:19AM
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clumsycook

Well we decided to settle on an offer of $86,500. We wanted at least $20k over what we paid for it, and besides, that was the limit the buyer was willing to offer. He may have been bluffing, but I didn't want to take that chance. To be honest, I don't think any other buyers would have offered that much or be qualified to pay. I am happy that he is returning to the home and will be able to enjoy the workshop he built, the grape vines he planted, etc... Besides, the timing is perfect as I think we can close the week before pre-planning starts. Thanks so much for the advice. Hopefully I will be posting on the building homes forum before long!

    Bookmark   June 24, 2011 at 1:11PM
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deaniesue

Congrats!

    Bookmark   June 24, 2011 at 4:51PM
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LoveInTheHouse

I think you did good!

    Bookmark   June 24, 2011 at 11:44PM
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ncrealestateguy

You are a smart seller. Yes, they do have an emotional attachment to the home, but you also have an emotional tie to get moved before school starts again. And the comps showed it at about $85000. You did good!

    Bookmark   June 25, 2011 at 9:32AM
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