Are we being played?

turtleshopeJune 7, 2012

On Monday we looked at and made an offer on a townhouse. It was not yet on the market. We were told two weeks before that the seller had met with her agent, and the asking would be $392k, and that it was updated (built 1960). There are many townhouses of that age, style and similar location in the development, and none have sold in the past year for more than 375k -- that one had new kitchen, BAs, windows, etc. Inventory, however, is low, and we were willing to offer more than the comps would suggest, depending on the actual condition.

When we went to see it, we were told the asking was $410. The AC had broken the week before and would be replaced. The bathrooms were updated, it had a new roof, newer windows, etc., but the kitchen was original and it had some cosmetic problems in other areas.

We offered $395 on the understanding the AC would be replaced. On Wednesday we were told the AC would cost $20k to fix, and they were firm at $410k, and if we didn't take that it would be listed at $427k. 20k seemed high for AC, so we asked to see the estimate.

In the meantime my agent and I quickly got ballpark, generous estimates, both of which came in at 10k max. And it turned out there is were no estimates, just the seller was afraid it would cost that much.

I increased our offer to $400k to try to keep the deal alive (we have been looking for 5 months now, and though we don't need to move, we would like to).

In the late evening, I talked to my agent who said they countered with $400k, but would not replace or repair the AC.

This morning, I was composing our response which said $390k with AC as is, or $390k plus the cost of the new AC, based on at least 2 written estimates, mutually agreed on (I don't always take the lowest bid). While I'm tweaking the wording, I see that the agent has listed the property this morning for $430k (love Redfin!).

I went ahead with the counter-offer as described above. Waiting to hear back.

Am I right in feeling jerked around?

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Sounds like you've gotten into a bidding war with yourself. Why on earth are you bidding up a property $25k over what anything else has sold for? Is it that special?

You aren't getting jerked around, you are just negotiating really poorly.

    Bookmark   June 7, 2012 at 12:07PM
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The sellers have nothing to lose by listing. If you were interested at $400k, they probably think someone else might pay more. We bought a house before it went on the market, but it worked because our sellers felt that not having to prep and show the house had some value. Your sellers are willing to go through the hasle of showings for weeks/months to get a few more dollars. Either pay what they want or wait a few weeks and offer $395 again or lower!

    Bookmark   June 7, 2012 at 12:42PM
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Withdraw your offer.

    Bookmark   June 7, 2012 at 12:49PM
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You're in a shopping frenzy and not thinking clearly for no good reason here. 4 months of looking is nothing when you don't "have" to move. Wait the six months for it to come down to the 370 it ought to have been listed at and then make an offer at 350. And in the meantime, look at other complexes as well as the new units that will come on the market in this complex. You're really shooting yourself in the foot by being impatient here.

    Bookmark   June 7, 2012 at 12:50PM
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Partly it's supply & demand, there are very few listings in the area (walking distance to work). Partly it's pressure from DH to be done with the searching; he doesn't care about money.
Other units of the same model and age but with updated kitchen & floors are listed at 450 (but unlikely to sell for that, DOM 29 so far). A larger fully updated one with master bath sold for above $500 (under contract for about 6 weeks, hasn't closed), and a smaller one in the same complex is expected to close soon, likely at $400. Never thought the large one would find a buyer above $500.
SO there seems to be upwards pressure on prices, with the low inventory.

    Bookmark   June 7, 2012 at 12:53PM
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I would step back unless you have an extra-compelling reason for that specific property. Your early interest is probably what drove up the list price. 4 months is not a long time to look unless you are looking under duress.

    Bookmark   June 7, 2012 at 12:57PM
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Let it go.
They are approaching summer with no working AC in a townhouse that are usually crap for air circulation because of how they are boxed in. People will step 2 steps in the door and turn and leave. That price is going to drop like a stone as soon as the heat hits.

    Bookmark   June 7, 2012 at 1:33PM
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IF you do go ahead with this offer (and it sounds as if you shouldn't) make sure that you have an appraisal contingency in your contract! That way if the property does not appraise for the (inflated) selling price you can back out without penalty.

    Bookmark   June 7, 2012 at 2:22PM
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Wow, I hate to pile on, but I'm with everyone else. You're getting jerked around, but you're allowing yourself to be. The seller is getting googly-eyed at the offer-before-it's-on-the-market, and bumping the price up. You should have offered $375K based on the comps and then (perhaps) go up during negotiation if you really really love the place.

If you're lucky, the seller will remain googly-eyed and reject your offer. Let them sit with the other unsold ones until they get reasonable on the price.

If there are others on the market, why have you not made offers on those? How do they compare to this one? What's so special about this one that you're willing to pay $25K+ over market value?

    Bookmark   June 7, 2012 at 5:07PM
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There are two others on the market, both in poor locations on busy streets. One is priced at 350 and needs tons of work, has been on the market about 5 months. The other, on the market for one month so far, is priced at 450 and has everything updated.
In fact, I learned that it is solely on the basis of this listed unit that they arrived at the new price of 430 -- not on any comparable sales.
The AC unit was serviced and now runs. But must be near end of life; definitely looks old.
So we are out of the deal, well and good I say.
I want to thank everyone for telling me I'm a dope! Seriously, it was what I was thinking but DH, left to himself, would pay asking price every time.

    Bookmark   June 7, 2012 at 7:00PM
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I'm still in shock that it would cost 20 grand to 'fix' the AC. We just replaced the central AC and heat in a house (1700 sq ft) for under $5,000.....


    Bookmark   June 7, 2012 at 7:09PM
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Maddielee, it seems that number was a figment of the owner's imagination, but through the broken telephone of seller-agent-agent-buyer it came across at first as an estimate. The brand in question, Spacepak, is known to be pricey.

    Bookmark   June 8, 2012 at 7:55AM
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Turtleshope, good for you for withdrawing your offer. I think you felt in your bones that they were playing hardball with you. If this is how you were treated at the beginning of the process, something tells me the entire process of dealing with these sellers would have been a nightmare for you.

I know looking for a home isn't fun for a lot of people, but proceed calmly and go with your gut feelings if something just doesn't feel right even if you can't put your finger on it.

    Bookmark   June 8, 2012 at 8:46AM
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Well, the story went on. On Monday my agent called and said there were multiple offers on the weekend, but the one that was accepted had fallen through (lack of anticipated parental financing). Did we want to make an offer too, along with the three others?
I said yes, as it seemed to me that the market must be changing. I went back to 400 with the AC not replaced.
On Tuesday he comes back with a counter of 410. And it seems there is only one other bidder.
I'm still having trouble trusting their agent, and wondering if it is all for real. Then I think of my friend, who has been looking for a place in the same neighbourhood but was giving that up, I thought. She also felt previously this townhouse layout might not work for her family. But I had suggested she look at the place.
I email her and sure enough, she is the other bidder (the remaining party dropped out). I withdrew my offer, because she is a good friend (wanted to withdraw her own offer), she has sold her current house, and her young daughter just loved the yard. (We don't have kids, and are not selling).
I promised her I would find a better place eventually that would make her jealous!
The market value? I suppose that will be for the bank's appraiser to figure.

    Bookmark   June 14, 2012 at 2:56PM
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"he doesn't care about money."


Don't tell anyone this, & don't let him tell anyone;
don't even let him speak to a seller or seller's agent.

    Bookmark   June 14, 2012 at 4:30PM
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Hey, I don't even let him speak to our agent, LOL !

    Bookmark   June 14, 2012 at 4:33PM
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OK so you decided to back off - which was a good thing. Then you got lured back in with "multiple offers" - oh no someone is going to take this house from me - I will bid again even though I already decided to get out. What the heck? BAD idea. So you took the bait, placed another offer, one party backed out, the other party ends up being someone you know. You not wanting to bid against your friend is very honorable......but you actually cost your friend money by getting back in. Too bad the friend can't back out and claim the lowest price now that your offer and the other party's offer is now meaningless. I know it doesn't work that way. Too bad for them - great for the sellers and the realtors. I would NEVER get into a bidding war. You never know if the realtors are really being honest or if another offer exists at all.

    Bookmark   June 14, 2012 at 6:10PM
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I was happy when I thought you got out!

Then you not only got back in, but you got into a bidding war with a friend... jacking up her cost... sheesh!

    Bookmark   June 14, 2012 at 7:07PM
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It seems you could be played by anyone and everyone, including yourself. And you have a husband who does not care about money. Unbelievable!

    Bookmark   June 15, 2012 at 12:50AM
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I thought the property might sit there unsold for a month and then we might make another offer. It seems to me the value was higher than I thought; the location is better than the others of similar condition that have sold, and it has a better yard & better parking situation. What is the value? What the market says it is.
My agent suggested that my friend should lower her offer, and I passed that on, but they did not take up that suggestion.

    Bookmark   June 15, 2012 at 3:58PM
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