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One particular counter

June 7th, 2006 by Kenric

I received three counteroffers. Two I’ve pretty much decided are not going to happen. However with this one I think I may have a small chance in getting.

The house (HO#3):
2300 sf, 4br, 2ba, 2ca garage, pool
Asking $400k, claiming its listed at $30k below market, reduced from $425k to $400K.
Has been on the market for 97 days

My offer:
I offer $350k sight unseen with $10k earnest and 2 week close

Their counter:
$390k, I must see the house, no frig, I pay for appraisal

Because of the stipulation that I must see the home I went to view this home. Now I don’t know if the realtor made that stipulation because he knew the home was “special” or if that just bothered him. But, let’s just say that this home was very colorful! We are talking blue kitchen walls and doors, green living room, red bedroom, etc. And they weren’t the nice “in” colors, they were bright and bold colors. The pool was so small that I wouldn’t even consider it a pool, I’d say it was a large spa. You could tell that the homeowners did some remodeling themselves because some stuff wasn’t to code and some just has to go. In any case, after seeing the home it made me think my offer was too high!

I compared this house to the same model asking $410k (HO#6) which has also been on the market a long time. The $410k house had granite counters, a den, larger yard, neutral colors, fireplace, etc.. And those people can’t even get $410k for their house! So how could these owners expect to get $400k for theirs?

The selling realtor kept alluding to the fact that the house appraised at $430k and that at $390k you are buying real cheap. I keep countering that if this house was worth $430k you wouldn’t be selling it for $390k after 97 DOM. I also counter that the nicer house can’t even sell at $410k. The more I talk to them the more I think I’m overpaying at $350k. However, I do come up $5k on my counter because I need to move rather quickly and I can fix all the problems with this house rather cheaply. But I also wrote a short letter with my counter in hopes that I would knock some sense into them. The key is to stay unemotional although it’s hard to do even for an investor when you are talking about your primary residence. But at this point I don’t care if I do or don’t get this home. Here is my letter.

Dear Selling Realtor:I thank your buyers for submitting their counter offer. I would like to bring up a few points as to why my offer is where it is. I like the home and its layout and appreciate the fact that it appraised for $430,000. However, with your sellers having moved out of town, I was wondering if they understood the Phoenix market and its over abundance of home inventory. Many homes here are not selling near their appraised value due to the 47,000+ homes on the market. About 37% of the homes in the Phoenix area have reduced their initial asking price.

Many sit on the market with no offers because the sellers aren’t aware that we are in a slowdown and that many buyers are sitting on the sidelines. In reality, if this home was worth its appraisal value, the home would have sold a long time ago. In this subdivision alone there are over 130 homes on the market, when looking at homes in my price range there are over 37 alone for me to view.

There are a couple homes that have similar floor plans and better upgrades (neutral colors, granite counters, all appliances, washer/dryer, fireplace, larger backyard) that are asking $400,000-$410,000. When I compare this home to those, I cannot possibly pay close to their counter offer price. Please show your sellers the other listings in the subdivision and have them compare these homes to theirs.

I have viewed the home this morning and I realize that it has been modified to suit the previous owner’s needs and tastes. I would still like to purchase the home at my counter offer price.

I would like to stress that the reason I have such a quick closing date on my offer is because I have to move out of my home on June 25th. Two weeks is the minimum time that I need to ensure that I can close. I have to purchase a home by this weekend or else I will have to start looking for a home to rent. I only bring this point up because I would hate for your sellers to call me back at a later date willing to negotiate because it will truly be too late for me. Thank you for taking time to read this.

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