Dear Monty: We made an offer on a home through our agent that is $400k overpriced at $1.3 million.
Our agent researched the comparable sold homes in the area.
They recently listed the house.
They rejected the offer.
Sixty days later, we tried again, removed several contingencies and left the price as before.
Their agent responded, telling our agent he was not presenting our offer because the seller was disgusted with our original offer.
The seller’s agent is not returning our agent’s calls.
We have learned that the seller never lived in the home and rented it out.
We don’t want to give up, because the house is the best we have seen.
What can we do to rekindle the negotiation?
Monty’s Answer: The best way to rekindle the relationship is to raise your offer, maybe considerably higher, to get their attention at this point.
You may have to pay more than the house is worth if it is the best house you have seen.
That could be why they are attempting to get more.
Here are a few possibilities that may be occurring, and understanding them may help you devise a course of action:
- The agent may not be keeping up with the recent market changes.
Changes in the real estate market are often slow to be noticed.
Still, the market changes rapidly when interest rates rise below 3% or above 6%. - It is possible that the seller knows more about neighborhood values than the agents.
I have seen many examples over the years where that has happened. - The owner may have overpaid for the house, or may have overspent on making improvements.
If there is a large mortgage on the property, selling for less could mean the seller brings cash to the closing. - Sometimes, a personal relationship with the seller will influence an agent’s judgment.
The agent erred in not communicating the offer.
Sellers often change their minds. - Either agent may have made a mistake in choosing comparable sales.
Improper valuations are common in real estate because judging comparables is subjective, and some agents are not very good at it.
Most agents have minimal experience with appraisal requirements and appraisal theory.
Options to consider
• Wait till after the first of the year. It may take more time for the seller to realize that the market is rejecting their offering. Their motive for selling will influence their decisions.
• Keep looking while you are waiting. A new property that you like even more may appear.
• Move on. You may be wasting your time and your energy.
• You contact the seller directly. The property tax bill is mailed to the owner and may be a public record. If available, send the seller and the agent a conciliatory note and the comparable sales you used to determine your valuation. Direct contact with an already agitated owner is risky and could further damage your chances of reopening a dialogue.
Richard Montgomery is the author of “House Money – An Insider’s Secrets to Saving Thousands When You Buy or Sell a Home.” He advocates industry reform and offers readers unbiased real estate advice. Follow him on Twitter at @dearmonty or DearMonty.com.