Profile picture for pxlchk1

Ever successfully negotiated with a seller who's pricing way too high for the current market?

I've been watching our local market for the past couple of years. It's the same story over and over. Really high (high being a double entendre!) original asking price, then drop, drop, drop, it ends up around 100k less and finally sells.

So here I am, finally found the right house for us, right where we want to be, the style of home I've admired since I was a little girl, and the sellers (shocker) think they have the one home in America that wasn't touched by the recession. It's heartbreaking because I know after we move somewhere else, they'll drop the price into a range more in keeping with the market.

Has anyone ever gently and successfully gotten a seller who's emotionally attached to an unrealistic price to come down and realize the market conditions? They just had a broker open house and all the brokers advised their price is too high. What can we do? Anything? So sad...
  • April 11 2010 - Brookfield
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Answers (21)

I agree with Scott the best thing you can do for the seller is bring a CMA with all the evidence showing what the Market is willing to pay for a property.  The best thing to do is all of your homework on a property and bring as much information on the market for that area as you can.  The more research you do and can present to a seller the stronger of a case you will have for the Market Price.  The price may not always be what the seller wants to hear but it is a price that explains what the Market is willing to pay for that property at the particular moment.  

Good Luck

-Sean
  • May 28 2010
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Unfortunately this is too often the case.  Your move was the correct one.  You should always focus on the house and not the seller.  If they refuse your offer then you should refuse their home.  It is only fair that you find the perfect fit, which in this market should be fairly easy to do.
  • May 27 2010
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Profile picture for egelandgroup
pxlchk1,

Great question.  I have been successful, but often the overpriced homes (homeowners) are not realistic & it takes take for them to come in line with their true value.

If the sellers will not listen to reason there is not much one can do...you cannot make them sell, but if your agent can give data to support your price it can only help.
  • May 27 2010
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Profile picture for SoCal Engr
That makes sense to me. It may well be a "if we get this much, we'll go sailing - otherwise, we'll stay put" type of situation.

Either way, congrats on finding your house by avoiding the "this is the only house for me" trap.
  • May 24 2010
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Profile picture for pxlchk1
"Has anyone considered that the seller is fully aware of the market values, but is not in a position to sell for less?"

I know the owner originally purchased the home in the low-mid 100's about 15 years ago. They told me they refinanced last year and that was what they were basing the value on. They're selling their house in order to go live on a sailboat and travel the world. It could be that they based a lot of their plans on cashing out of the house at a certain amount.
  • May 24 2010
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Profile picture for SoCal Engr
Good for the OP. I'm glad you got what you wanted, and it sounds like in the same area and with additional "goodies" as well.

Just out of curiousity...

The basic assumption is that the seller has their head in the clouds with-respect-to the value of their home. Has anyone considered that the seller is fully aware of the market values, but is not in a position to sell for less?
 
If the seller is not under any immediate pressure to sell, then it is entirely possible that they are trying to get out of the house under a very narrow set of conditions.

Of course, this also begs the question of "why did the realtor accept an overpriced listing", but we all know that the highly ethical RE profession would never take on a listing at an unrealistic price with the intent of pressuring for price reductions after the listing has been secured.
  • May 24 2010
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Profile picture for pxlchk1
Well here's our update:

We found nearly a duplicate comp in the same area priced at 309,900 (the original home was at $389k) that has central air, newly refinished full bathrooms, and brand new appliances. -All improvements that the other home did not have. We're closing on 6/30.

So there's my lesson! Break up, move on, and date a new house who will treat you better. ;)

Thanks to everyone for your wonderful feedback! Hopefully this thread will helps others as well.
  • May 24 2010
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If the seller is not motivated to sell, then no amount of logic, market analysis, statistics, charts, graphs or anything else will convince them otherwise. What you basically have is a seller with a FSBO mentality. He thinks he knows more about the market than a realtor. He thinks this is still 2004 and not 2010.
  • May 24 2010
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It really depends on the motivation of the sellers...

The one thing that your agent can stress is everything breaks down to one factor which is PRICE PER SQ. FT.

If all of the comps don't support the sellers price per sq. ft.  have your Buyers Agent emphisize that this home, even at the higher price will need to appraise out.

If the comps are all lower then go to the listing agent with your CMA information and support your cause with the comps.  Ask why you should pay more per sq. foot above and beyond what the home is worth if the comps don't support this price?

Also, an appraiser will be using the similar comps.  It must appraise out in order for a lender to loan on this house.  If you do pay more, it may not appraise out and the homeowners still will not get their asking price...

I'm hoping these homeowners will come to their senses!

Best of luck!
  • May 24 2010
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Profile picture for jean214
I experienced the same problem with the owners of a condo for which I wrote a lease-option contract. I rented for a year, and at the end of that year, the market would not support the purchase price I put in the contract. I made an offer about 11% lower than in the original contract, which was significantly below what the owner paid, because they stupidly overpaid for a flipped condo that had been boosted in price by a greedy developer. The owners insisted that the condo was worth what they paid, period. I ended up walking to more than 100 condos in my development, placing hand bills in the doors of all one-bedroom condos in buildings that were of interest to me, and bought one at a price I felt was fair. The owners of the other condo, where I lived and from which I did not want to move, rented to another, less desireable tenant for less money; she dumped them, and they are still on the market, now three-plus years later.
Long story short, ignorance and stubbornness cannot be overcome. Look elsewhere. It's a buyer's market--make it work for you.
  • May 24 2010
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ok here is the answer--  have all your friends write lowball offers that make yours look great.  make sure the seller signs off on all rejections-- to make sure their agent is representing themm...*** joking******   just kidding.

get cans of spray paint and write on garage ( overpriced )

maybe , have your agent beat up thier agent???

**********  all jokes *****************


yes its common in all markets , even when its a hot market...

keep looking...  and have their agent call you when they waste more time and realize the true value...
funny, they may sell it for a high price, but it will go bad when the appraisal is low...  then you may get it??  There is a better one out there...
Always is!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  • May 23 2010
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This is why a Comparative Market Analysis works well. It shows the Sellers how much the comparable homes in their areas sold for in the last 3 months, what their competitors are trying to sell their homes for and how long they've been in the market AND more importantly, those homes that expired because the owners were too stubborn and priced them too high for the market.  If after reviewing it with them and determining what their motivation is for selling, hasn't made common sense kick in, then there's little that can be done. Do they want to sell quickly or do they want to be one of the last homes to sell? The longer a home is on the market, the less they will get in the end, especially once they've passed their golden time, which is within the first 6 weeks the home is on the market.

If they have overimproved their homes and put more money into it than the neighborhood is worth, that's too bad and hopefully they enjoyed their overimprovement but the truth is that the condition may be important for a quicker sale due to competition but it doesn't mean that it's going to warrant any more money than the market will allow.

Further, if it doesn't appraise for what they ask, then a lender is NOT going to breach that gap, so then the Seller must lower the price to the appraised value or the Buyer will need to pay the difference up front.

Maybe you could write them a letter stating how much you admire their home and ask if they would be willing to negotiate the price based on what the home appraises for. That is, if you're willing to pay the appraised price. When I purchased a home, we got an appraiser out and whatever the appraisal came in for is what we bought it for, as agreed between us and the Seller.

Is there are Realtor for the home? If so, make an offer and add that appraisal contingency to the contract.


  • April 12 2010
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Profile picture for sunnyview
I love your note. Send it direct to the owner by mail and write it in a pretty blank greeting card. It cannot hurt to show the owner that you are a real person with a family. While it is true that it might soften your negotiation room if repairs are needed, the answer you have now is no. I say give a shot. Some agents do not relay offers to sellers as you might hope they would and I think letting the seller know that you are not an investor out to lowball and make a buck off them is important. PS It really is a pretty house :)
  • April 12 2010
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Profile picture for pxlchk1
On the advice to send the owner a nice note telling her how much we love the place, this is what I just sent off. Whichever way things go, I think it leaves things on a nice tone.

Dear (owner),

I got the call from Laura this morning that our offer ($349k w/
closing fees) was refused. I am completely empathetic to your
position. We're kind of in the same boat (no pun). I love your home
very much and can really picture my family there, but at the end of
the day we can't get a bank to appraise it for what you're asking.
Heck, I wish I had the money to make up the difference, negative
equity or no! I certainly meant no disrespect with our offer and
really hope there are no hard feelings. If there is an opportunity to
discuss in the future I would very much welcome it. It's a beautiful
house and I've always dreamed of a place just like it.

However things work out, very best wishes for your future. I've told a
few people about your boat plan and it's universally agreed upon as
incredibly cool. I hope you intend to upload photos of your adventures
somewhere. It would be a very interesting read.

Take care!

Sincerely,
Alana
  • April 12 2010
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Profile picture for pxlchk1
Hi everyone,

Thank you so much for the thoughtful follow ups.

Here's the link to the property on Zillow.

And here's their MLS listing (with an asking price of $389,000).

They initially had the home up as a FSBO and I approached the owners on my own. About a month passed, they signed up with an agent. I approached them afterward, but they advised me that the listing agent would now have to take a reduced fee because we established a relationship before they signed their contract.

I teamed up with an agent I've worked with in the past after my initial conversations and offer with their listing agent. (I know this was where I went wrong but I thought the seller would be more flexible without a seller agent fee. Stupid.)

I have a feeling now that the seller's agent is not passing my communications over to the seller. Why would she? She's not getting the dual agent fee (I made it clear that I was not utilizing her as a dual agent) and whatever fee she does get if I buy the house will be slashed. My last offer was extremely reasonable. I offered $349k plus closing costs, but the offer price would be contingent on the bank's appraisal. I got a curt phone message from the seller's agent this morning that was a flat out shut down. She said, "I just spoke with the seller. They will NOT be taking your offer. Also, I got a call from [my agent] this morning and am confused why he would be calling me. Good luck."

Yeesh. I've been very, very respectful and openly appreciative of the home this entire time. I did provide a stack of comps that my ex-husband (a local broker) provided me as well as the full chart view of Zillow. I expressed multiple times that I sympathize with the seller's position, that I understand it's a process to come to terms with selling your home for less than you believe it's worth, but that we are very interested and it is our first choice.

Outside of seeing what our agent can do, I think I'm going to have to emotionally let go and just let whatever happens, happen.
  • April 12 2010
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Go ahead and make an offer based on what you think the current market is. Have your agent supply comps with the offer and pre-approval.
 
Write a nice handwritten letter to the sellers telling them how much you like their home and look forward to raising your family there. Thank them for taking good care of it and promise to be good caretakers. Let them meet you and your family in person.

Keep your fingers crossed. Be ready to keep looking.
  • April 12 2010
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Nothing in the original post suggest the poster's agent has not already provided an answer, CMA or other substantive guidance on the issue. The fact remains that this particular seller like so many others is over-priced and the listing agent has, like so many others, failed to properly guide their client.

I agree with "Scottsdale" have your agent provide an honest CMA with an approval letter and offer. The seller can always say no, but they might say yes. For all anybody knows, they might be talking "price reduction" right now and you may luck right into it.
  • April 12 2010
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Profile picture for expatinasia
janehendy hit the nail on the head - patience is a virtue.  Too, don't fall in love with a home - it won't love you back.

When I found the home I wanted, I gave him a low-ball offer and, when he realized the realities of the market, he finally accepted.
  • April 12 2010
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Patience is the key for the sellers & buyers.IF the sellers really DO want to ssell they will have to come to a reality price/one that is what a buyer is willing to pay. " Good things come to those who wait" or so the saying goes. I truly believe that the you will get the right house at the right time at the right price...but you gotta wait for it!
  • April 12 2010
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Dear Ms pxlchk1,
Not knowing the market or neighborhood where your 'dream is' nor if you are working with a buyer's agent who has a reputation for being a tough negotiator, this is challenging to answer.  The agent from Scottsdale was right on by suggesting you get your agent to do their homework and create a CMA (comparative market analysis).
With the substantial decline in the market over the past 3 years, what is far more important is to list only SOLD properties that are comparable.  We are critiquing your agent which is not appropriate, because they should have had the experience or training to deal with your situation and provided an acceptable answer.  Here in Sarasota, FL, for the 1st 2-3 years of this dcline sellers were not willing to accept reality.  Most owners think their properties are worth more than the market dictates and only after 3-6 months of inactivity, if they are motivated to sell, will accept their agent's recommendation to drop the price.

If they are not motivated to sell or are upside down on their mortgage (Short Sale), their agent hopefully has been trying to make a 'market adjustment' (reduction) in asking price.

Have you with your agent submitted a written offer accompanied by a pre-approval letter?  If I were your buyer agent, I would write a cover letter requesting it be read to the seller clarifying agent's research of sold properties and perhaps printouts of those properties differentiating subject property for the one you are interested in.

If you like your agent but are not satisfied with their ability to make progress and get feedback, I would ask to speak to your agent's broker (manager).  We don't have specifics on your dream home including asking price and what your offer would be.  Perhaps your agent is not communicating well with you what in their estimation based on sold properties  is a fair range for an offer.

As Scottsdale recommended, you may have to wait 3-6 months or longer until the seller does adjust the price to the market. I am interested in what city you live because I would be surprised if in the past year there hasn't been reductions in over-valued listings compared to the 2005-09 period.  I wish you well.

Randy Schweitzer
Coldwell Banker
Sarasota, FL
  • April 11 2010
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This is a situation where the Seller simply does not understand that they cannot control the market.  I think this seller will eventually come down to reality, but only after much angst.

Have your agent produce a good CMA and present it to the Seller/Listing Agent and start the negotiations.  Another option is to have the home appraised and present to the Seller (I do not really like this because of the cost) this way they will see an independent opinion.

I think if you keep the negotiations alive eventually you will prevail, but it could take a while.
  • April 11 2010
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