How should I respond to a counter offer on a house we like when they didn't drop their asking price much?

Question

They are listed at $299,900 and countered our offer of $272k (including $4k closing costs) with $295k. That doesn't make it look as though they will budge in their asking price. It's a pity, because while the house is in great condition, it's not worth the same prices as a new house (which are selling as low as $300k), since it's 12 years old, and it's smaller. They are asking $162 feet per square foot, essentially, and the going rate in that community seems more like $145. We'll make a response to their counter at $178k and see what happens next. That is pushing the limits of what we can afford, and according to what our agent has shown us, is reasonable. The house has been on the market for only 42 days, and admittedly it is very well maintained and tastefully decorated and landscaped. I would hate to have to give up on this house. Should we stand firm and see what they do, or give up and go back to looking for a house we even remotely like?

Answer 1

You can always counter back with the same price, or have your realtor let the owners know your last offer was final.  And since there are sooo many homes to choose from at any given time, just walk away. Once this house sits on the market another 2 months, the owners may come back and accept your offer.

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Answer 2

It may be that they can not afford to go lower.  They may owe too much and not have much wiggle room.  If you feel comfortable paying what their counter is then go for it.  If you feel that it is overpriced, walk away.

Answer 3

I just had a recent experience.  We bid on a house that was 330K.  We put our first offer at 305K with a 5K closing credit.   Because we low balled them, they were smart and came back and said, we aren't going to change the price but we'll give you the 5K closing credit.  That showed us they weren't willing to budge that much off their price. We then went in with a Firm 320K with 5K closing credit and got the house.

The key is to find that magic number the seller is thinking of.  Think about it like you were the seller.  Check the tax records and see what they bought it for.  If they look like they have equity in the home then try to follow their logic.  They put the house for sale for basically 300K probably thinking they would like to get 285 or 290.  When they saw your low ball offer they decided not to budge to show you they weren't interested in going that low.

You said 278 was on the high side of what you can afford.   I would probably go in with a firm bid at that price letting them know that is the highest you are willing to go.  Make sure your realtor adds in a paragraph of why you think that's a good bid.  You can list things that are wrong with the house or things you will have to change or just state that you are not comfortable paying more in a declining market.  Don't mention anything about not affording more.

Be prepared to walk away from the house.  If they say no, you tell them the offer stands if they change their minds.  If they sit out there for another 30 days with no other offers they might come back and take yours.  If that happens, keep looking.  You might find something else that you love.

Good Luck and I hope you get the house!!

Answer 4

What is the assessed value of the property?  What are other similar properties selling for?  Is it a corner lot?  Does it have a lot of nice upgrades such as replacement windows, vinyl siding, etc?  

If they asked $299,900 and you countered with $272,000 you asked for a $27,900 price reduction, which is quite large.  (It may be $31,900 - not sure what you meant by including $4K in closing costs.  Does not mean you offered a price of $272,000 and asked for the seller to pay $4,000 in closing costs or did you offer $276K, asked for $4K in closing costs, essentially reducing the asking price to $272K or did you mean something else?)  Anyway, you can make the offer of $278K and see what happens.  A lot of factors go into this - how anxious are they to sell, have they had many offers, would they be taking a loss if they sold if for less than asking price, etc.  Trust your agent - that's why you hired him/her and hope for the best!  Don't take on more than you can handle though - if you are pushing your limits of what you can afford, maybe you should step back and rethink.