Author Topic: Need opinions ASAP about an offer on our house!  (Read 10642 times)

kolorado

  • Bristles
  • ***
  • Posts: 368
Need opinions ASAP about an offer on our house!
« on: March 29, 2012, 10:13:38 AM »
I really want some honest opinions about the house we're selling. We're moving to CO in a few weeks for hubby's work. This is the listing:
http://www.coldwellbanker.com/property?propertyId=251265570&brandType=CB&mode=detail
Here's the Zillow, which I don't trust as accurate since up until the time our house listed, they had our neighbors house labeled with ours as one property with our combined home details mixed in together as one page.
http://www.zillow.com/homedetails/532-Rieck-Ave-Millville-NJ-08332/38410215_zpid/
Our realtor says comparables sell in the $95K range. What's hard to gauge from comparables is the desirability of our street. Nothing stays for sale long on this street if you cared to dig into the Zillow records.
We've been offered $80K. No way, no how. I'd rather turn it over to a management company to rent out than sell for that. Am I being crazy?
At a 1% rate of appreciation from our purchase price to now : $84K
2% = $93K
3% = $103.5K
We're asking $99K. Admittedly, we haven't done too much to the house besides basic upkeep, adding a storage shed, replacing the roof, replacing all the carpet with hardwood and vinyl and having vinyl windows put in. Actually, that now sounds like a lot.
The house will be a $650 a month drain on our income($250 of which will be building up principle)while we rent for a year in CO. We have enough savings for a 20% down payment on our next house without needing the principle from this one and enough credit for another mortgage while still carrying this one. We owe $55K on this house.
It's only been on the market a couple weeks but we've only had one showing.
What would you do as a seller? What offer would you make as a buyer? How hard is it to be a long distance landlord?

ShavenLlama

  • Stubble
  • **
  • Posts: 132
  • Location: Orange, CA
Re: Need opinions ASAP about an offer on our house!
« Reply #1 on: March 29, 2012, 10:37:10 AM »
What are the rents in your area?
Are there a lot of rentals?
What is the going rate for a mgmt company in your area?

My (totally non-professional) opinion is to rent the place out until the market improves. $80K seems low compared to the couple of properties I clicked on. It appears that you have a huge lot compared to your neighbors, but they have bigger homes?

Also, you mention renting for a year in CO. Are you moving back after? Do you want to deal with having to find a place all over again when you do?

And finally, Zillow is crap for comps, at least in my area. But that could be because property values are so drastically different even from one block to another.

kudy

  • Pencil Stache
  • ****
  • Posts: 945
  • Age: 37
  • Location: RV Traveling the U.S.
Re: Need opinions ASAP about an offer on our house!
« Reply #2 on: March 29, 2012, 10:42:16 AM »
Seems likely they are sending a really low offer to get the negotiation started in their favor - nothing stopping you from counter offering 90?

kolorado

  • Bristles
  • ***
  • Posts: 368
Re: Need opinions ASAP about an offer on our house!
« Reply #3 on: March 29, 2012, 11:08:51 AM »
We will be staying in CO. I've looked up property management companies and can only seem to find two, each over an hour away. I must not be searching right. We could rent the house out for $1000-1200 a month according to Trulia and Zillow. I have a ton of relatives and friends in the area that might also be able to manage the property for me if I do some asking and digging. There aren't a lot of rentals in our area. There are almost none to get into our elementary school district which is the best in the county. This house was a rental before we bought it.
The only thing stopping me from countering and selling for $90K is running the numbers. Since we're only losing $450 a month every month it sits unsold, sacrificing what I believe to be the value just to be rid of it fast seems foolish. We don't "need" the money to force the sale. It'd have to sit unsold for almost two years to get down to a $90K value sale.
Our realtor suggested a counter offer of $95K to which they would probably counter $90K. It just seems to dadburn early in the life of the listing to go down that much. Am I wrong?
My realtor(assigned by the company as part of the relocation package)isn't as interested in selling as I would like and really wants me to go down to $90K and unload it. She was giving me the interest data over the last couple of weeks and I don't know if she was confused or trying to pull one over on me but she said the interest was 88 views the first week, 168 the next and 23 the third week and that it proved interest was dropping off. When I pointed out that the third week only started yesterday she started stammering. Yeah, I can count.
Here's the Trulia page(only comparables are downtown which is rundown and not safe):http://www.trulia.com/property/compare/3079294570-532-Rieck-Ave-Millville-NJ-08332#map-for_sale
Thanks so much for the opinions so far! It helps to talk it out and see what everyone's experience can bring to my dilemma.

C99

  • 5 O'Clock Shadow
  • *
  • Posts: 11
Re: Need opinions ASAP about an offer on our house!
« Reply #4 on: March 29, 2012, 12:02:35 PM »
I don't think it makes sense to base the sale price on desired appreciation from the purchase price or the amount of upgrades you've done.    It really has to be based on what comparable homes are selling for.  If you think $95k is low, discuss with the realtor.  Can you see the sale prices on those other homes on your street?  Are they really significantly higher?

However, if she's accurate in her assessment of $95k, then I can understand her recommending you take $90k and be done with it.  Doesn't mean you have to do it though-- going below comp is just a way to speed the sale.  I certainly wouldn't take $80k yet since you're not needing to sell ASAP.

Speaking as a buyer I have to say it's comical to see listings well above comps in this market.  Those homes sit unsold for months and months, then they finally start dropping the price. 

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28242
  • Age: -999
  • Location: Seattle, WA
Re: Need opinions ASAP about an offer on our house!
« Reply #5 on: March 29, 2012, 01:50:33 PM »
If you could, and you had the money, would you buy that exact same house right now for 80k?
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

ShavenLlama

  • Stubble
  • **
  • Posts: 132
  • Location: Orange, CA
Re: Need opinions ASAP about an offer on our house!
« Reply #6 on: March 29, 2012, 02:07:08 PM »
Sounds like you need a new realtor. Do you HAVE to use this lady?

If you could rent the place out for over $1000, and your costs are $450 to own, it sounds like a no-brainer to me.

Use your excess to pay off the mortgage ASAP, and sell when the prices are more in your favor.

And tell Mr. LowBalls to suck it!

gangr

  • Guest
Re: Need opinions ASAP about an offer on our house!
« Reply #7 on: March 29, 2012, 02:33:27 PM »
Of the 279 MLS views, I assume a few have materlized into actual showings, and one of the showings has materialized into an offer. Assuming that is correct and based upon your ability to get a prop mgr and the rental rates you stated, I'd counter at $97.5k to show that you are willing to deal, but on a more realistic basis.

If you can't find a managment company, can't actually get the $1000 rental rate for a 2 bed 1 bath, and you have to try to manage a NJ home from CO, it might change my strategy.

kolorado

  • Bristles
  • ***
  • Posts: 368
Re: Need opinions ASAP about an offer on our house!
« Reply #8 on: March 29, 2012, 02:39:04 PM »
If you could, and you had the money, would you buy that exact same house right now for 80k?

I don't know what you're really trying to ask with this question. The obvious answer is yes because that's a steal of a price and I love a bargain. But if I could find this exact same house in CO at this asking price I would jump at it. I would offer less just to see what the owner would do but would be willing to pay the $99K.

~Yes, we have to use this realtor. It's part of the relocation bonus given to us. She's actually very good and very experienced but used to dealing with homes in the bigger cities with much higher values. Bungalows in the bumpkins aren't her best thing.

~There's no way we'd accept an offer of $80K. The person who made the offer came with an entourage of people to see the house and lives a couple streets away. Many people show interest in this type of house to keep aging relatives or fledgling youngsters close to home but with some independence. I don't blame them for wanting a bargain but that offer is insulting.
What I'm really in a quandary about is whether to counter offer anything and if that counter offer should be any lower than $95K. I wanted to price the house at $106K to allow room for bargaining but eventually settled on an aggressive price to start to generate more interest.

~If anyone thinks my I'm expecting more than the comps would suggest I hope they would tell me so. I want honest opinions!!

velocistar237

  • Handlebar Stache
  • *****
  • Posts: 1422
  • Location: Metro Boston
Re: Need opinions ASAP about an offer on our house!
« Reply #9 on: March 29, 2012, 03:28:30 PM »
If you really feel insulted, you could counter with $110K. Or just ignore it. You haven't been on the market long enough for that kind of offer. Ask them how many months their offer is good for.

It's really hard to evaluate comps, but I would say that $99K sounds very fair.

As far as property management goes, I would hit the yellow pages or ask a local landlord if they know anyone. Maybe a landlord would be willing to do it?

TheDude

  • Bristles
  • ***
  • Posts: 467
Re: Need opinions ASAP about an offer on our house!
« Reply #10 on: March 29, 2012, 04:00:43 PM »
Never, I repeat never be insulate by an offer. This is business. Counter with 98K and they will get the point. You never know maybe they are still interested at 95k and just thought they would try something lower first. Being insulted in my opinion is just silly and doesn't help anyone in the situation.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28242
  • Age: -999
  • Location: Seattle, WA
Re: Need opinions ASAP about an offer on our house!
« Reply #11 on: March 29, 2012, 04:14:57 PM »
If you could, and you had the money, would you buy that exact same house right now for 80k?

I don't know what you're really trying to ask with this question. The obvious answer is yes because that's a steal of a price and I love a bargain. But if I could find this exact same house in CO at this asking price I would jump at it. I would offer less just to see what the owner would do but would be willing to pay the $99K.

There's an interesting quote.  It goes like this:
"Every day you don't sell, you are choosing to buy."

If you have an asset with an offer for 80k for it, and you think it's worth more, by not selling it for 80k, you are choosing to buy it for that 80k you could have.

If you had 80k, and you would purchase that same home for 80k, then you shouldn't sell it for that price.  If you would purchase it for 99k, then you shouldn't sell it either!

I think though your answer of "yes, I'd pay 99" isn't true, otherwise you wouldn't be selling it for that.  Cause then you'd be keeping it.

For example, if I had a Gizmo valued (to me) at $100.  So if someone offered me $50 for mine, no way.  It's worth $100 to me.  If someone offered me $200, sure.

If they offered me $100, then it's a tossup, right?  If you're actually genuine in your "I'd buy at 99k" then you shouldn't be selling at 99k.

So I think you need to think through what it's actually worth, to you.

So get real honest with yourself now.  You own that house.  An identical one goes up for sale next door.  They're asking $99k.  Would you make an offer to purchase it?
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

kolorado

  • Bristles
  • ***
  • Posts: 368
Re: Need opinions ASAP about an offer on our house!
« Reply #12 on: March 29, 2012, 04:41:20 PM »
If you could, and you had the money, would you buy that exact same house right now for 80k?

I don't know what you're really trying to ask with this question. The obvious answer is yes because that's a steal of a price and I love a bargain. But if I could find this exact same house in CO at this asking price I would jump at it. I would offer less just to see what the owner would do but would be willing to pay the $99K.

There's an interesting quote.  It goes like this:
"Every day you don't sell, you are choosing to buy."

If you have an asset with an offer for 80k for it, and you think it's worth more, by not selling it for 80k, you are choosing to buy it for that 80k you could have.

If you had 80k, and you would purchase that same home for 80k, then you shouldn't sell it for that price.  If you would purchase it for 99k, then you shouldn't sell it either!

I think though your answer of "yes, I'd pay 99" isn't true, otherwise you wouldn't be selling it for that.  Cause then you'd be keeping it.

For example, if I had a Gizmo valued (to me) at $100.  So if someone offered me $50 for mine, no way.  It's worth $100 to me.  If someone offered me $200, sure.

If they offered me $100, then it's a tossup, right?  If you're actually genuine in your "I'd buy at 99k" then you shouldn't be selling at 99k.

So I think you need to think through what it's actually worth, to you.

So get real honest with yourself now.  You own that house.  An identical one goes up for sale next door.  They're asking $99k.  Would you make an offer to purchase it?

Don't make me think any harder today! ;) I wouldn't need the house next door because I have this one, why would I need two unless I would rent one out? And I actually said I'd purchase this house in CO, not here since we're moving. But again, that would depend on comps in CO. If that house was set down in a neighborhood of $60K houses I'd offer less. Looking at the comps for the area I can confidently say that $99K is a fair price for here. It's set in a neighborhood of $175K houses.
I still don't get what you're trying to tell me about me not wanting to sell it for less than $99K since you seem to be advocating that I make this into an emotional decision. I do understand that I am choosing to purchase it if I don't take the offer. I admit there are a lot of emotions tied into why I don't really want to sell it. My family and history and heritage are here in South Jersey. My husband and I have spent out entire married life and had three kids from this house. We are following my husband's job, not mine. Not being in control of something is hard for me. But when we priced it we weighed the data logically. I want to choose the best financial route for managing the property whether that be selling or renting.

Mrs MM

  • Administrator
  • Bristles
  • *****
  • Posts: 367
Re: Need opinions ASAP about an offer on our house!
« Reply #13 on: March 29, 2012, 07:00:09 PM »
Hey - I didn't get a chance to read all the other comments, but my first random thoughts are:

- don't trust zillow for home valuation
- your realtor should provide you with very detailed comps for your home and be able to explain all the numbers... this includes showing you what sold, but also what didn't sell (expired and withdrawn listings).
- your realtor should advise you on how to negotiate this.  Many people come in with lowball offers.  If you don't like the first offer, you can counter with the list price or not much below.  This sends a message that you think the offer is ridiculous, but you're willing to negotiate at a higher level.
- how long has your home been on the market? Is this your first offer?  If it's newly on the market, then you have more leverage.  If it's been sitting around a while and this is the first offer, then the price may not be right (or it may not appeal to a buyer for another reason)
- negotiations can get personal and emotional sometimes -- try to leave that out of it.  Don't be offended by a low offer - this is an opportunity to sell your home!
- lastly - what is your realtor doing??!!  :)  I have to bring this up again... do you trust your realtors opinion? If you know what your home is actually worth (current market value) based on real concrete data, then all you have to worry about is negotiating to get to that value. 

Ben

  • Stubble
  • **
  • Posts: 123
  • Location: SC
Re: Need opinions ASAP about an offer on our house!
« Reply #14 on: March 29, 2012, 08:02:59 PM »
Who makes more money- the realtor that quickly sells 5 or 6$100,000 houses for 5-10% below fair market value or sells 1-2 $100,000 houses for fair market value? He/she has to work about as hard to make either of those happen...

The correct answer is that the realtor who sells lots of houses at bargain prices makes a lot more, since he/she collects a percentage of the sales price. The $5-10k you are fighting for only adds up to a couple hundred dollars in fees to her, but could cause many hours more work for her. Her incentives encourage her to get you to sell quickly and move on to sell more houses.

Research shows that realtors leave their OWN home on the market for a lot longer than the average homes they sell, and tend to get closer to the asking price.

It's not really a matter of unethical behavior, but it's a matter of misaligned incentives that you should be aware of when consulting with a real estate agent. They make the most cash when lots of homes go on and off their books quickly, with minimal sales effort, but should be willing to work with you if you are stubborn and are in no hurry to sell.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28242
  • Age: -999
  • Location: Seattle, WA
Re: Need opinions ASAP about an offer on our house!
« Reply #15 on: March 29, 2012, 08:38:41 PM »
I still don't get what you're trying to tell me about me not wanting to sell it for less than $99K since you seem to be advocating that I make this into an emotional decision. I do understand that I am choosing to purchase it if I don't take the offer.

The opposite.

You're making it emotional, by basing it on your purchase price + slight appreciation.  What makes you think it's worth that, other than you'd like to make your money back and a slight return?  That's emotional.

I'm advocating actually quantifying what it is worth, and then deciding if you would make the same purchase, because that's what you're choosing to do by not selling at that price.


Don't make me think any harder today! ;) I wouldn't need the house next door because I have this one, why would I need two unless I would rent one out?

Exactly.  Your original post says something about how you'd rather turn it over to a property manager and rent it than sell it for that price.  In the latest post you said:
I want to choose the best financial route for managing the property whether that be selling or renting.

So let's quantify it in real terms.  If you could buy that exact same house, next door to yours, and rent it out, would you?  Run the numbers. If so, it could make sense to keep it as a rental.  If you wouldn't, then why would you consider doing it with the one you already own, other than the emotional not wanting to take a loss on it?

You're worried so much about it being a great price or not, but the way to truely evaluate an investment is to look at if you'd purchase it right now at that price, because that's what you're doing by not selling.

So, for example, let's say I buy a stock.  The price drops a ton.  Would I buy that stock now?  If no, then why am I not selling?  Better be a pretty compelling reason.

If you would buy that same house for 80k as a rental, good, then hold out for a higher offer and/or make yours a rental - because you're basically purchasing it for 80k by not selling it.  If you wouldn't buy it at 90k, and you get an offer for 90k, take it (that's assuming you've negotiated it up as high as you can to that, obviously), even if you think it SHOULD be worth more.  It likely shouldn't, if you can't get more. The market sets the price, and if you don't get higher offers and you wouldn't buy at that price, that's a good price point to sell at then.

It's a different way to think about it, but once you "get it," it helps a lot in making decisions.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

kolorado

  • Bristles
  • ***
  • Posts: 368
Re: Need opinions ASAP about an offer on our house!
« Reply #16 on: March 30, 2012, 06:06:49 AM »
I still don't get what you're trying to tell me about me not wanting to sell it for less than $99K since you seem to be advocating that I make this into an emotional decision. I do understand that I am choosing to purchase it if I don't take the offer.

The opposite.

You're making it emotional, by basing it on your purchase price + slight appreciation.  What makes you think it's worth that, other than you'd like to make your money back and a slight return?  That's emotional.

I'm advocating actually quantifying what it is worth, and then deciding if you would make the same purchase, because that's what you're choosing to do by not selling at that price.


I realize I must have given that impression when I showed some figures on appreciation with the offer we got. Those are numbers I ran after the offer. We did NOT use appreciation as a factor in choosing our asking price. We solely used the comps, neighborhood sales and values and the realtor's advice.
Of course it'd be nice to get more than we put into it but we'd get that with the $80K offer so no loss will occur. I don't think it's emotional at all to want the true value out of an item I'm selling, that just makes financial sense. The true value cannot be determined by one offer from one potential buyer after only two weeks on the market. How can one buyer's opinion outweigh the data our realtor provided? If I give up $20K in house value just to be rid of it forever, it's the same as my husband putting in half a year of work. Getting closer to our asking price would be like getting over 3 years of income from making it a rental. And as a rental, if I turned the income into paying down the mortgage, there'd be only 6 years left on the mortgage until the income would more than double. It'd be foolish to decide to give all that up so soon before really knowing if we've valued our house too high. It's numbers, not emotion.
I'm running into snag when trying to run numbers on turning this into a rental. I know what to rent it for and how much it takes to upkeep this place. What I don't know is how much to pay a property manager or how it will affect our income and taxes.  As a long distance thing with added regulations and hassle with the taxes may make it not worth it to me as much of our income from the property may be lost in lost tax credits due to higher income. Things I need to research!
I don't think it's a fair exercise have a MMM reader determine what we'd spend for something to set a value for selling. If we get everything at 50-75% less than what everyone else is paying it brings what I'd sell for to a ludicrously low level even if I didn't use those specific percentages.
Thanks for all the advice and opinions everyone! We're leaning toward countering very high. My hubby loved that idea!

Ben

  • Stubble
  • **
  • Posts: 123
  • Location: SC
Re: Need opinions ASAP about an offer on our house!
« Reply #17 on: March 30, 2012, 06:27:15 AM »
Arebelspy,

It's not quite the same, since there are costs associated with buying and selling a home. There is a spread equivalent to costs incurred by selling and moving + costs incurred by buying and moving. For example, selling at $80K = $80k - .06*(80k)  realtor fee= $75.2k - moving costs/time = ~$73k

Buying at $80k = $80k plus any closing costs/fees associated with a mortgage), plus whatever you value your time invested in buying/selling, plus if you attach a risk premium to buying an unknown vs. keeping a known quantity = perhaps $85k-90k

It could be quite logical for her to be unwilling to sell at $90k, AND unwilling to buy at $80k. I know a lot less about real estate than you do, so my estimates could be either generous or conservative, but whether the spread is $5k or $15k, it's something that should be considered- action is more expensive than inaction when you have to pay for action.

Incidentally, this is one of the reasons that index funds usually outperform more active stock investment strategies- less buying and selling.

Also, Kolorado, beware of using what you paid for something vs. what it's worth to influence your decision (which it sounds like you already are doing a good job of already) http://en.wikipedia.org/wiki/Sunk_costs

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28242
  • Age: -999
  • Location: Seattle, WA
Re: Need opinions ASAP about an offer on our house!
« Reply #18 on: March 30, 2012, 08:20:56 AM »
Ben, right.  All costs need to be counted for in the decision to buy and sell. Good point.

If I give up $20K in house value just to be rid of it forever, it's the same as my husband putting in half a year of work... It's numbers, not emotion.

The above two statements don't match at all (among others).  What does how much work it would be for your husband to make that same amount of money have to do with what the house is worth?  Nothing, it's just an emotional thing.  It's hard to separate them though, I know.

Not trying to attack you, just pointing out that there is, and will be, almost inevitably, emotion tied into it.  :)

That's okay, just recognize that and try to see it, rather than ignore it.

I'm running into snag when trying to run numbers on turning this into a rental. I know what to rent it for and how much it takes to upkeep this place. What I don't know is how much to pay a property manager or how it will affect our income and taxes.  As a long distance thing with added regulations and hassle with the taxes may make it not worth it to me as much of our income from the property may be lost in lost tax credits due to higher income. Things I need to research!

Property manager will be roughly 10%.  You also know what maintenance/upkeep is as owner occupied.  It will be different for a rental (likely higher, as tenants won't take as good of care of things as you do).  Plus there's vacancy to factor in, credit loss, etc.  MMM wrote about the 50% rule of thumb at one point, I'd check that out, then start plugging in your more exact numbers to narrow the range, figure out your operating expenses, NOI, and then ROI to see if keeping it as a rental makes sense.

I don't think it's a fair exercise have a MMM reader determine what we'd spend for something to set a value for selling.

No, none of us can set a value on it for selling for you.  We're merely providing different ways to look at and think about the situation, in the hopes that one of them may help you.


How can one buyer's opinion outweigh the data our realtor provided?

Because it's not one buyer, it's also all the other ones not making offers due to the price.

Now I'm not saying it's only worth 80k.  You may very well be able to sell for 105k.  I would counter very high (likely 99k, original asking price) with this buyer.  But accept that with one offer in two weeks, your price may be high, regardless of what the comps and your realtor are telling you.  Two weeks is a short time frame.  But if it goes on like this, it may be an indication that yes, the market knows more than - and should outweigh - your realtor.  And I was further pointing out that by not selling at 80k, you're choosing to buy at 80k (+ fees).  It's a different way of thinking that is hard to fully grasp.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

kolorado

  • Bristles
  • ***
  • Posts: 368
Re: Need opinions ASAP about an offer on our house!
« Reply #19 on: March 30, 2012, 09:15:28 AM »
Ben, right.  All costs need to be counted for in the decision to buy and sell. Good point.

If I give up $20K in house value just to be rid of it forever, it's the same as my husband putting in half a year of work... It's numbers, not emotion.

The above two statements don't match at all (among others).  What does how much work it would be for your husband to make that same amount of money have to do with what the house is worth?  Nothing, it's just an emotional thing.  It's hard to separate them though, I know.

Not trying to attack you, just pointing out that there is, and will be, almost inevitably, emotion tied into it.  :)

That's okay, just recognize that and try to see it, rather than ignore it.

.... It's a different way of thinking that is hard to fully grasp.

I am having a hard time grasping your opinion that I'm tying emotions into the price set. I see my husband's time of half a year as an asset. The house is an asset. They each have a value and should both be weighed into the decision. At our income level, every month of work and every asset must be very carefully managed to reach our retirement goals. At this point in the life of the listing it's too hard to tell if the value we assigned to the house is realistic or not. I just don't want to do something stupid that would end up with my husband working longer. I see it as having Super Bowl tickets in my hand and I am reasonably offering them for $200. But someone lowballs me for $160 only to turn around and sell them for $200. That was stupid of me because the buyer was out there, I just wasn't patient enough. With real estate it's hard to know where patience ends and repricing begins. This is my first shot at it and I want to do it right.
I am trying very hard to understand what you're trying to teach me here. Maybe it will hit me tomorrow. ;) But thank you for wanting to help me. I appreciate it.
Thank you everyone!
And after doing some research on landlord and property management laws and tax stuff in NJ, and running all the numbers and percents, keeping the property to rent out is 99% a no-go. It would take at least 5 years to ever see any kind of return on the investment(breaking even or a smidge of profit every year) for heaps and heaps of hassle. If I do decide to be a landlord it should be a local place that I can manage to increase the profit.

kolorado

  • Bristles
  • ***
  • Posts: 368
Re: Need opinions ASAP about an offer on our house!
« Reply #20 on: March 30, 2012, 03:59:21 PM »
An update, I did call our realtor and make the counter offer of $98K. I received another offer of their top price of $85K. Interestingly enough, it's not a person who lives a couple streets away like the paperwork says, but an immediate neighbor. Another neighbor was interested in our house a couple years back for an aging relative but they haven't asked to see the house.  They also expressed interest in just buying a piece of our property that backs into their property for $10K.
It's weird, $80K sounded horrible but $85K doesn't sound so bad. Maybe I gained some perspective today? Hmm.
We have another person coming to see the house tomorrow. I don't how long I can sit on an offer but being that they're my neighbors, I know they've had their eye on the property for a long time and may still be interested in it after a small elapse of time. I wouldn't want to bet on that but it's not unlikely.

herisff

  • Stubble
  • **
  • Posts: 111
Re: Need opinions ASAP about an offer on our house!
« Reply #21 on: March 30, 2012, 04:22:02 PM »
I don't how long I can sit on an offer but being that they're my neighbors, I know they've had their eye on the property for a long time and may still be interested in it after a small elapse of time. I wouldn't want to bet on that but it's not unlikely.
Your realtor should be able to tell you how long you can think about it. You should have 2 to 3 days, and may have up to a week.

Selling or buying a house is a business transaction. Offers and counteroffers are the norm. When I am buying a home, I give a lowball offer but expect a counteroffer. As a seller, I set the original price to what I would like to get, but counteroffer down to what I am willing to accept. You just need to know how low you are willing to go (or how high, if the buyer) before you walk away from an offer and tell your realtor an absolute no to a bid.

MMM

  • Administrator
  • Stubble
  • *****
  • Posts: 181
    • Mr. Money Mustache
Re: Need opinions ASAP about an offer on our house!
« Reply #22 on: March 30, 2012, 07:51:45 PM »
I don't how long I can sit on an offer but being that they're my neighbors, I know they've had their eye on the property for a long time and may still be interested in it after a small elapse of time. I wouldn't want to bet on that but it's not unlikely.
Your realtor should be able to tell you how long you can think about it. You should have 2 to 3 days, and may have up to a week.

Selling or buying a house is a business transaction. Offers and counteroffers are the norm. When I am buying a home, I give a lowball offer but expect a counteroffer. As a seller, I set the original price to what I would like to get, but counteroffer down to what I am willing to accept. You just need to know how low you are willing to go (or how high, if the buyer) before you walk away from an offer and tell your realtor an absolute no to a bid.

Agreed.

Around here we usually have 24 hours to respond.  It should tell you the deadline date and time on the counter offer.  Also, since you came back nearly at asking and they went up $5K, it seems like they might be willing to do more.  I would counter at something you would be happy with, but is a bit of a compromise (ie. not $97K).  Good luck!!

-- OOPS!!  This is Mrs. MM, by the way.  Was logged into MMMs account - sorry honey!  :)

kolorado

  • Bristles
  • ***
  • Posts: 368
Re: Need opinions ASAP about an offer on our house!
« Reply #23 on: April 03, 2012, 06:04:12 AM »
For anyone who is interested and following my little saga, we did make another counter offer to the offer of $85K. After reading all your helpful suggestions/thoughts I went back to the drawing board and researched sales prices in our area and created a range of prices based on square footage and condition. It was actually impossible to do this with the comps my realtor pulled so I found other online resources for home values and sales to use in my research. I tried to look at everything, including this house, as a buyer and think about the highest I would offer for this place right now which would be the lowest possible number I'd sell for.
Homes in my neighborhood have sold for $105-110 a square foot in the past six months although most are "valued" at $125-140 a square foot and all are twice the size of ours. The smaller the house, the higher the cost per square foot BUT the house has to be in very good condition. A tiny house of about 550 sq ft down the street sold last year for $135 sq ft but it was ship-shape. Our house in in good condition but not very good. Nothing major wrong and move-in ready but a large amount of puttering on minor things is needed(dadburn kids!).
Our asking price was $122.50 sq ft. Their counter offer was $105 sq ft and that's probably why it didn't sound too bad to me, it's in keeping to some extent with local and recent sales prices. So we counter-offered at $113 sq ft. We'll see where that goes.

James

  • Handlebar Stache
  • *****
  • Posts: 1680
  • Age: 47
  • Location: Rice Lake, WI
Re: Need opinions ASAP about an offer on our house!
« Reply #24 on: April 03, 2012, 07:59:15 AM »
Our asking price was $122.50 sq ft. Their counter offer was $105 sq ft and that's probably why it didn't sound too bad to me, it's in keeping to some extent with local and recent sales prices. So we counter-offered at $113 sq ft. We'll see where that goes.

In reading the whole progression of this thread, I can see you developing the right sellers mindset through your posts.  You really seem to have come to terms with your situation, and are ready to consider this the business transaction it is.  I think you are the right track, good luck with the negotiations!
« Last Edit: April 03, 2012, 09:29:02 AM by James »

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28242
  • Age: -999
  • Location: Seattle, WA
Re: Need opinions ASAP about an offer on our house!
« Reply #25 on: April 03, 2012, 08:55:47 AM »
Our asking price was $122.50 sq ft. Their counter offer was $105 sq ft and that's probably why it didn't sound too bad to me, it's in keeping to some extent with local and recent sales prices. So we counter-offered at $113 sq ft. We'll see where that goes.

In reading the whole progression of this thread, I can see you developing the right sellers mindset through your posts.  You really seem to have come to terms with your situation, and are ready to consider this the business transation it is.  I think you are the right track, good luck with the negotiations!

+1.  Quite a sensible way of approaching it.  Hope they accept. Good luck!  :D
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

MMM

  • Administrator
  • Stubble
  • *****
  • Posts: 181
    • Mr. Money Mustache
Re: Need opinions ASAP about an offer on our house!
« Reply #26 on: April 07, 2012, 11:49:41 PM »
Oh Man.. it looks like the last update on this thread was four days ago. We're in suspense! What's happening NOW?? :-)

Also, even more importantly - Congratulations on moving to Colorado! :-)


MacGyverIt

  • Stubble
  • **
  • Posts: 233
  • Location: Not in a tropical, underpopulated location. And that's just wrong.
  • What Would MacGyver Do?
Re: Need opinions ASAP about an offer on our house!
« Reply #27 on: April 08, 2012, 08:27:15 AM »
For anyone who is interested and following my little saga, we did make another counter offer to the offer of $85K. After reading all your helpful suggestions/thoughts I went back to the drawing board and researched sales prices in our area and created a range of prices based on square footage and condition. It was actually impossible to do this with the comps my realtor pulled so I found other online resources for home values and sales to use in my research. I tried to look at everything, including this house, as a buyer and think about the highest I would offer for this place right now which would be the lowest possible number I'd sell for.
Awesome research but sheesh! You are doing all the realtor's work yet they'll still make a commission.

Wonder if there is way to sell by owner but still get your listing into the real estate databases? (probably too late this round but good to know for future endeavors).

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28242
  • Age: -999
  • Location: Seattle, WA
Re: Need opinions ASAP about an offer on our house!
« Reply #28 on: April 08, 2012, 09:42:21 AM »

Wonder if there is way to sell by owner but still get your listing into the real estate databases? (probably too late this round but good to know for future endeavors).

Yes, there are real estate services that will list on the MLS for you for a few hundred dollar fee.

You'll still have to pay the buyer's agent 3% plus the other closing costs, but it'll save you the 3% (or 2% if your Realtor is nice) of your seller's agents commission.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

kolorado

  • Bristles
  • ***
  • Posts: 368
Re: Need opinions ASAP about an offer on our house!
« Reply #29 on: April 08, 2012, 06:49:39 PM »
I have to use the realtor as part of my hubby's relocation "bonus". They're giving us half a year's pay for moving and paying for all our expenses/movers to get out there so we're following their rules.
So the update is there is not update. I have not heard back on our counter offer. We've had only three showings in the 25 days it's been listed. We did drop the price by $4K on the day we made the counter offer. I also listed the house on Facebook and Craigslist trying to get some interest. It's just as well people aren't beating down the door to see the house just now. I have moving to do. ;)
The movers will be here in a week and the lockbox is going on the door for future showings. I've been as busy with house puttering as a temporarily single mother to three children can be. Today I took down shelves and decor from the walls, patched holes and painted the areas. My dad came over to help fix my dishwasher. The chopper had to die out just now. I actually have protection for that under the home warranty I bought through my realtor but I'd have to pay an $80 fee. The part is only $18 and our labor is free so I chose DIY and learned some stuff about dishwashers. My dad also mowed the yard for me. I was trying to hire someone to come do it and my dad got upset enough about me spending money that he came over with my brother in law and got it done. I wonder where I got my frugal ways? Ha!
At the end of the year, if the house remains unsold, we'll be $4095 poorer. In a way it won't make a dent in our day to day finances because my husband's increased pay will cover it. But it's still technically a loss since we could be saving the money.
I was actually a little surprised when we got the rental home my husband applied for. He looked at 30 some houses and saw this one on the day it became available. He and three other people applied. I don't know how a landlord looks at data on a tenant but it's clearly not from the angle of housing=1/3 of income. They would have had to include our mortgage here in that and we'd be way over. We'll be paying about 45% for housing until our NJ house sells.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28242
  • Age: -999
  • Location: Seattle, WA
Re: Need opinions ASAP about an offer on our house!
« Reply #30 on: April 09, 2012, 08:12:47 AM »
I don't know how a landlord looks at data on a tenant but it's clearly not from the angle of housing=1/3 of income. They would have had to include our mortgage here in that and we'd be way over. We'll be paying about 45% for housing until our NJ house sells.

No, they likely didn't include that.  Ideally (for them) they would, but they probably just looked at their rent and divided it by your income.

Congrats on getting the (rental) house you wanted!
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

tooqk4u22

  • Handlebar Stache
  • *****
  • Posts: 2209
Re: Need opinions ASAP about an offer on our house!
« Reply #31 on: April 09, 2012, 01:36:45 PM »
Hope all goes well with the move and sale.  Two thoughts that come to mind:

1.  South Jersey values declined about 15% from the peak, which sounds about when you bought your house (2006-ish) - prices are back to about 2003-2004 level generally.  Millville and other areas that are far south NJ maybe were hit harder although maybe not in Millville as the ongoing upgrades to the university and area have helped.  Take $84k plus cost of major improvements (roof) completed and x 85% (assuming timing is right).  If it is in that zone it is probably a reasonable (not necesarily good) offer - you could wait but if what you want is far above this number then it probably won't happen.  If $85k is still on the table you should probably take it. 

2.  You mentioned a relocation package, if the it includes them picking up the cost of the realtors commisions that is 5-6% and many times such relo packages expire after six months. If that is the case and your sale takes longer than six months then you will have to absorb the commissions - don't focus on the sale price focus on the net amount. 

Good luck. 

kolorado

  • Bristles
  • ***
  • Posts: 368
Re: Need opinions ASAP about an offer on our house!
« Reply #32 on: April 09, 2012, 04:42:04 PM »
We bought the house in 2000, well before the peak, for $74500. We did the roof ourselves and spent $2000 on it. We replaced the windows for $4800. We replaced all the carpet with hardwood and vinyl for $1200. We added a shed to the property for $1000 and raised garden beds last year for $200. Those things I would say were improvements. Otherwise we've spent about $3500 on regular maintenance in paint, appliance repair and replacement, fixing damages and the like.
And hubby's employer isn't directly paying the realtor's commission, they just got kick-backs for sending us agents. It's in the paperwork for the bonus that those things help them defray the cost of moving us and if we go with someone else or do it ourselves we void all our benefits. Moving us out there is twice the expense of a realtor's commission so we went with their plan.
Does anyone have any thoughts about keeping the utilities on? I'd planned to have everything shut off next week since the house will be vacant. Everything was off when we bought it, I thought that was normal. We're selling the house with a 1 year warranty so I think that tells people that stuff will work and we're not trying to trick them. But now I'm reading articles that say power-less vacant homes scare away potential buyers and make them think there are serious problems with the house. ???

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28242
  • Age: -999
  • Location: Seattle, WA
Re: Need opinions ASAP about an offer on our house!
« Reply #33 on: April 09, 2012, 11:11:11 PM »
It could be okay to have them off, but you'll need to get them turned on for an inspection.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

tooqk4u22

  • Handlebar Stache
  • *****
  • Posts: 2209
Re: Need opinions ASAP about an offer on our house!
« Reply #34 on: April 10, 2012, 09:31:28 AM »
Based on timing and DIY work it sounds like you are priced, or willing to accept a price, that is appropriate.  However, you are still at the mercy of a slow market but now is the best time of year to sell. 

I would leave the power on and the fan from HVAC system on....people will be turned off by no lights or stuffy stale air and will think they can get deep discount if house is vacant and power off...it screams I need out quick (not the case for you but perception means more than reality). 

Also it seems that houses are like living things...and tend to fall apart or have more issues when there is no activity for an extended period of time.  I don't think there is concrete evidence of this but it does seem to happen, not sure why but I am sure several of the readers could give expamples. 

kolorado

  • Bristles
  • ***
  • Posts: 368
Re: Need opinions ASAP about an offer on our house!
« Reply #35 on: April 27, 2012, 07:03:04 PM »
Another Update :)
Well, the first potential buyer did not budge from their offer of $85K and we didn't budge either at our counter of $91.5K so that fell through.
We packed up and moved last week and are now in CO.
Luckily we had two showings the day after the move(so glad I spent the time painting and cleaning those last few days!)and got another offer, again for $80K. We countered again at $91.5K to which they countered at $85.5K. We stood firm and they accepted. Yes! So the house should be sold at $113 per square foot. Closing should be in in less than 3 weeks.
After paying the realtor and the mortgage balance we should walk away with almost exactly what we put into it in mortgage principle and improvements. That would make our price of "rent" over the years to be $527 a month. That is exceedingly awesome for NJ. :D
So all in all the house was listed 6 weeks with 6 showings that I knew of(maybe some after we left on the 16th?)and two interested buyers with offers. I think that's pretty fantastic in today's market so I'm pleased. My hubby's brother has been trying to sell his house in IL for 5 years now. Only 16 showings and not a single offer in all that time. Yikes.
And now that I know we won't be supporting two houses in taxes, mortgage/rent and utilities and I can breath easier and save more for the house we will buy out here. We have a one year lease here with the first month prorated so it's more like 11 months and a few days. House shopping will commence in about two months. Until then I will be exploring neighborhoods and areas and just trying to get a feel for the areas we'd prefer.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28242
  • Age: -999
  • Location: Seattle, WA
Re: Need opinions ASAP about an offer on our house!
« Reply #36 on: April 27, 2012, 08:48:55 PM »
Congrats!  Good luck getting it closed!
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

James

  • Handlebar Stache
  • *****
  • Posts: 1680
  • Age: 47
  • Location: Rice Lake, WI
Re: Need opinions ASAP about an offer on our house!
« Reply #37 on: April 29, 2012, 03:08:37 PM »
Great to hear it worked out well for you!