Should we be kicking ourselves?

phoggieNovember 19, 2010

We have had our house on the market for 3 months...and had our first offer a couple days ago, after lowering the asking price by $22,100. Our offer was still $50,000 below our already lowered price and they wanted a 3 month contingency....we countered with another $20,000 lower than our previous amount, but would not do a contingency for that long. Our neighbor has taken a contingency and she is so sorry. Her house was showing regularly and since the listing shows up as a "contingency", she has had no showings at all.

Ours is not a case of "have to sell", but rather a want to sell and down-size....but we do have some "wiggle room" in our price point. The market is very slow here for higher quality large homes, so now I am kicking myself thinking maybe our first offer might be our best offer.

Did anyone have their first offer the best/only offer you have had on your home....and did you take it? Did you take a contingency when you sold your home?...or would you take one?

Second guessing and nervous....but thanks for your replies.

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susana_2006

I was selling about 5 years ago -- more of a seller's market. The first offer was the best offer. It fell through, as did a few others. Finally sold the house 10 months later about $60,000 less. Good luck
I agree the contingency is a can of worms -- can turn into a game of dominoes.
Susan

    Bookmark   November 19, 2010 at 11:05AM
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chisue

I'd avoid the contingency too. Don't kick yourselves; you'll loose your balance and fall down! Three months is *nothing* in this RE market.

We'll understand the circumstances better if you use percentages, rather than dollar amounts.

    Bookmark   November 19, 2010 at 1:49PM
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ncrealestateguy

Most agents don't show homes that are contingent... I don't fully understand why. I let my clients decide that.
So, at least your showings will continue and you may wind up with another offer. If not, in 3 months, have your agent call the buyers, or buyers agent, and continue negotiations from there.

    Bookmark   November 19, 2010 at 8:18PM
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jane__ny

We sold this year. Our first off was a low-ball and we refused with no counter. We got a second offer from other people and we countered 1% below our list. Third offer was below and we negotiated back and forth and reached a point of $5,000 difference and we both wouldn't budge. Both Realtors agreed to split the difference to make the sale. At the time of closing, the buyers paid the $5,000. The agents didn't have to pay anything.

I would not consider a contingency at all. That was made clear when we listed. I would not get involved in that. We didn't have to move either. The area where we lived was high demand and we had many showings. Took us 5 months to accepted offer. Looking back, I now consider ourselves lucky. I'm not sure I would take the chances I did today. The market is different now.

Jane

    Bookmark   November 20, 2010 at 1:12AM
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phoggie

Well, at least it is good to know that none of you like a contingency either....so now I feel a bit better about that.

We originally listed our house for $342,000...after two months lowered it to $319,900. The low-ball offer was $268,000 and the three month contingency. DH said that our bottom dollar (at least for now) is $290,000 and no contingency.....an this was rejected.

Our house is a custom built (DH was the architect/contractor)...9 years old but in very good shape....4090 SF, 4 Bed, 3 1/2 Bath...ranch with full finished walk-out basement and 3 car garage. We are in a military town, so houses in that price range don't sell well.

Thanks for all of your support....and appreciate it.

    Bookmark   November 20, 2010 at 11:58AM
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ncrealestateguy

Phoggie,
Did they reject the price, or the lack of a contingency? Your agent should have found out. If it was just that you would not give them a contingency, then keep them in contact...when and if there house sells, they may still be your buyer.
If I have a client that wants to consider a contingency, I advise them to verify that the potential buyers home is priced to sell, and that the buyers are agreeable to a certain amount of a price reduction every certain amount of time. You never want to pull your house off the market and not have control over the factors that are needed to get you to the closing table. You need to have as much control as possible in any transaction.

    Bookmark   November 21, 2010 at 7:13AM
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chisue

I'm not sure if you are saying that $290K is what you MUST get. It it is, then your price at $320K leaves you some margin with which to bargain -- maybe too much margin. What if you broke the $300K barrier? (I'm hoping for a bidding war.) Is your house being shown? What kind of sales activity do you see in town?

Sorry for the lost 'new listing' impact and two months of good weather wasted while you sat at $342K, but that's water over the dam.

    Bookmark   November 21, 2010 at 11:28AM
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phoggie

ncrealestateguy....they rejected both our counter price ($290,000), as well as us not holding a contingency for them. We told them they could list their house and if ours has not sold, we would entertain another offer.

chisue.....I had to laugh at your saying not to kick ourselves because we might fall down. We feel that $290,000 is our bottom dollar for this house. I felt that $342,000 was too much to list it for in the first place, but that is what the realtor and DH thought it was worth for the amount of square feet.....the $319,900 is much more realistic. The army base here is building a new huge hospital and new doctors coming here....but it will be a couple years until completed....hope we don't have to wait that long~~~

Thanks to all....I need all the support on this very stressful time in our "older years".....just too bad we built such a big house in the first place.....word of wisdom to the younger people...we get older, health worsens, finances change, so keep that in mind when building or buying.

    Bookmark   November 21, 2010 at 12:15PM
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kats_meow

In general I wouldn't accept a contingency. But....we have our house listed now and it is very slow on any sales around here right now. When the listing expires we are taking it off until after the first of the year and maybe until February or March. So if I was offered a 3 month contingency right now I would probably take it. On the other hand if it was in May there is no way I would take a contingency.

    Bookmark   November 22, 2010 at 1:19AM
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leewil

If it is not urgent you can afford to wait, maybe you can get back to that first offer, if the party has not found something else yet.... Perhaps if the economic climate changes a little you get better offers ?

    Bookmark   November 22, 2010 at 4:02AM
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terriks

I think that the odds are greater that you would be kicking yourself if you had accepted a low offer with a 3 month contingency. I think that telling them to come back with an offer after their house is on the market (or better yet sold!) was the perfect response. Why should you wait around while they ready their house for sale, and try to find a buyer?

    Bookmark   November 22, 2010 at 11:56AM
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swhite10

I'm feeling that way now, phoggie. We got our first offer today after 6 months on the market. They came in with a low-ball offer and we countered half-way in between list price and their offer. They rejected it. We have a minimum we will accept, they have a maximum they will pay--gotta' draw that line in the sand somewhere! Anyway, while I'm disappointed that they didn't accept our counter-offer or even come back with their own, I'm not devastated. It will sell eventually. Thankfully we're not in dire need to unload it. Good luck!

    Bookmark   November 29, 2010 at 5:57PM
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jane__ny

Hang in there. I posted earlier about our experience with low-ball offers. The people who eventually bought our house made the second low offer 3 months before we eventually closed with them. After turning our counter down, they reappeared in October and made a new offer, still below what we would accept. I wrote about the rest in my previous post.

I assume the buyers continued to look around but wound up back at my house 3 months later. So, you never know.

Jane

    Bookmark   November 29, 2010 at 9:34PM
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beware

Will be listing our house in a couple of months and want to understand the anti-contingency thinking. If the contingent offer can be bumped (these agreements can be written to be very much in the seller's favor, i.e. they can bump for virtually any reason), why don't sellers like contingencies, and why would contingencies turn off RE agents or other potential buyers? Why would it hurt to look at a house that has a contingency agreement? As the potential buyer, you could bump them. Why not just see the house?

Is this at all a regional thing? We lived in the South years ago and don't recall an anti-contingency bias. Now in a different part of the country and I hear there is such as bias. Don't get it.

    Bookmark   November 30, 2010 at 9:57AM
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terriks

When there are tons of homes on the market buyers tend to put those with contingencies at the bottom of their lists. They don't want to look at and fall in love with a home that they may not be able to purchase because it is under contract with a contingency.

    Bookmark   November 30, 2010 at 12:16PM
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ottawavalleygardener

beware: if I understand the US term "contingent" correctly, it's the same as a conditional offer in Canada. So if I'm a seller and the buyer's offer is made on the condition that the buyer sells his/her home, then I can't just take on another buyer. My house is "conditionally" sold.

Maybe it's not the same in the US? But I wouldn't be that interested, as a buyer, in looking at a home that is conditionally sold.

    Bookmark   November 30, 2010 at 12:40PM
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phoggie

swhite~~I'll be thinking of you and hoping you have better luck in the future. I am like you....disappointed, but not devastated...but sure raises the stress point for awhile.

If I were a buyer, I would NEVER even want to look at a house that has a contingent offer on it because you know that someone else already has the first offer pending...and as terriks said, I would be so disappointed if I really liked the house and couldn't get it because of the contingency.

I guess I learned from our neighbor....she took a contingency and after it showed up on MLS listing that way, she has not had any other lookers....so she is sitting there wondering if the other people's house will sell or not....otherwise, she is back where she started and may have lost other buyers because of it.

It is getting cold in Kansas now....I have a nice warm house...just not the city I'd rather live, but not desperate to move either, so maybe the spring time will bring more interest...hope so.

Best of luck to the rest of my fellow sellers~~

    Bookmark   November 30, 2010 at 7:19PM
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phoggie

Well, here we are....still no offers...and no showings, for that matter. It is cold and the economy here stinks!

swhite....have you sold yet? I hope you are fortunate and have done so.

What is anyone's experience taking your house off of the market for a couple of months and relisting it? Is there a time limit when you can relist and the "days on the market" starts over again? Is that a wise thing to do?..or would we perhaps miss a sale if someone comes in the meantime?

Thanks to all of you...and we are just hangin' out in KS!

    Bookmark   December 22, 2010 at 12:39PM
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dreamgarden

We have friends who have had their house on the market for over two years. They paid 175k in 2000. Initially listed it for 279k in 2008, then lowered the price several times to 199k. Finally took it off the market a few months ago. Taxes are 7k a yr. Both parties (divorced) have moved to other houses. We feel bad for them that they are stuck making mortgage, tax, utility payments on a place neither is living in. Not sure what they plan to do next.

If I had to sell a house, I'd wouldn't buy until I sold what I have. Or, I might rent to a tidy relative.

    Bookmark   December 22, 2010 at 1:22PM
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orv1

Where in the world do you live that a 200k house has 7k in taxes? My house is valued at over twice that and our annual taxes are slightly less than 2k.

    Bookmark   December 22, 2010 at 11:27PM
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chisue

Yes, those sound like whopper taxes. Taxes are about 1.5% of market (not appraised) value on each of two properties we own.

    Bookmark   December 23, 2010 at 2:35PM
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mom270

@orv1 - Maybe it's the NY metro area. Our taxes are crazy high. I don't think you could buy a residential unit of any kind with taxes of less than $2K/year. Where is that? The south?

    Bookmark   December 23, 2010 at 3:13PM
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kellyeng

My property tax rate is 2.37% of appraised value (just a little less than market) in Central Texas. I thought mine was high . . .

    Bookmark   December 24, 2010 at 9:39AM
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orv1

Mom270, I live in Stone County Missouri, the same area that Jed Clampett was from.

I could see the taxes being that high in the NY metro area but I would have wonder what kind of house you could buy for 200k in that area?

    Bookmark   December 24, 2010 at 11:22AM
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qdwag

200k in the NYC area gets you a 2 car garage,no house attached ;)

Or it gets you a home that needs to be leveled

    Bookmark   December 24, 2010 at 1:14PM
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phoggie

orv l

With taxes like that, we might all be moving to Stone County, MO~~ WOW, you are lucky!

    Bookmark   December 24, 2010 at 6:14PM
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orv1

Looking out my back door, we like it here.

    Bookmark   December 24, 2010 at 6:53PM
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bh401

We sold our house in July and closed in August. We were on the market for almost 2 years. Listed at $329 dropped to $319 and sold for $306. Our first offer was so low it pissed me off. We werent in finacial distress we just wanted to build a new one. We completed that one in 2001. Had a contract with contingency but if we got another offer they had 48 hours to lift the cont. or we could sell to the other buyer. Extended contract 3 months. They still couldn't sell their house. (2 deals fell through on theirs.) Let contract die, gave up on selling, put down walnut floors through the whole downstairs. 2 months later they sold their house and still wanted ours.
Patience, Patience, patience! We had it sold for $300 before contract died. We split the cost of the new floors with the buyer. So $306. Selling is a long hard road right now and yes there are people out there that will offer you next to nothing because they think you have to sell. If you have patience the right buyer will come along.

    Bookmark   December 24, 2010 at 10:02PM
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phoggie

orv1~~

I know your area....and in fact, have cruised on that paddle boat....but can not believe your taxes are that low.
What is the secret of your county for revenue?....tourists?
Beautiful view...and happy for you.

    Bookmark   December 26, 2010 at 11:50AM
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orv1

"What is the secret of your county for revenue?....tourists? "

Beats me, I just pay what the bill says. I'm sure tourist's taxes accounts for a lot of it. There are also a lot of vacation homes here, I've heard they are taxed at a higher rate but I'm not sure about that.

Overall our rural areas have a more affordable real property tax than the cities.

    Bookmark   December 26, 2010 at 12:59PM
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chisue

phoggie -- The Sunday Chicago Tribune reports that the dam is about to burst: Banks are preparing to foreclose on the estimated 1.2 million defaulted mortgages they've been carrying. Advice to serious sellers is to do what's needed to sell *before* this huge glut brings down prices even further in the next two months.

    Bookmark   December 26, 2010 at 3:03PM
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dreamgarden

"phoggie -- The Sunday Chicago Tribune reports that the dam is about to burst: Banks are preparing to foreclose on the estimated 1.2 million defaulted mortgages they've been carrying. "

Would be interesting to know if this has anything to do with it.

Does WikiLeaks have dirt on Bank of America, too?
"In a Forbes magazine interview posted online this week, WikiLeaks' Julian Assange said his outfit plans a "megaleak" regarding a major U.S. bank in early 2011. The release includes tens of thousands of documents and would reveal unspecified unethical behavior, he said."

A link that might be useful:
www.mcclatchydc.com/2010/11/30/104515/does-wikileaks-have-dirt-on-bank.html#ixzz19GpxNQD2

    Bookmark   December 26, 2010 at 8:18PM
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dreamgarden

Sorry, I forgot this:

"Bank of America makes for a large target. It has nearly 300,000 employees spread around the world and plenty of ex-executives let go after acquisitions and cost-cutting moves. Lately, the bank has faced questions about its handling of home foreclosures. It also inherited losses and legal troubles from its Countrywide and Merrill Lynch purchases."

www.mcclatchydc.com/2010/11/30/104515/does-wikileaks-have-dirt-on-bank.html#ixzz19GqV88FG"

    Bookmark   December 26, 2010 at 8:20PM
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phoggie

OMG, this is scarey!!!...as if the market isn't bad enough already! We do have an "interested" buyer (or should say his wife) and they plan to list their house soon. We have come down a huge amount, so now it is time they come up a little to meet our price.

    Bookmark   December 29, 2010 at 11:49AM
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shenandoah

I would amend the previous poster's advice: If you have patience -- and cash reserves -- THEN you can wait for the right buyer to come along. In the meantime, you're pouring money down a deepening well.

We sold our home four months ago, at a price only slightly higher than we paid for it 13 years ago. The loss of value was a shame, but we were ecstatic to find a buyer (a demanding and difficult one, like most these days...), as the process of selling took us over 15 mos. all together and with my husband out of work we had virtually zero $$ left in the bank to pay the mortgage on the day we signed the contract. As 2010 winds down, we find even more reasons to feel lucky. Home prices in our city -- B of A's headquarters, no less! -- have dropped steadily since we closed, as unsold inventory has grown. I don't know what kind of economic factors you must weigh in your area, Phoggie, but if our recent experience is anything to judge by your best bet is to price your house as low as you think you can bear economically (and be prepared for the buyer to offer well below that), and get out of this killer-market quickly. A jaw-dropping price will generate a straight-up offer, and you can avoid contingent contracts. They can be a total nightmare and don't always result in a deal, as we found out on the first house we sold. Meanwhile, while waiting on the buyer to come through, you've lost time and opportunity.

Good luck with this situation. You say you have an 'interested' buyer. Yes, in all fairness and justice, your buyer should come up in price now that you've chopped your asking price. But in order to sell your home you may have to drop your idea of what's fair and go for what's effective -- what's going to get you to the closing table. If it were me, I wouldn't dither!

    Bookmark   January 3, 2011 at 9:00PM
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