Home Buyer Conundrum ... advice please!

[Italiahaircolor]

My husband and I listed our home for sale 29 days ago...

We had a man come through yesterday, and he wants the property. He has been our only showing, so we consider ourselves lucky. Problem is, he wants (according to our agent, who is also his agent) to offer much less than our asking. Apparently his financing has been all over the place and his approval has dropped in the last couple of months for whatever reason. He found this out as they were sitting down to write a formal offer...he walked away to sort things out, but is still dead set on the house.

We listed the home slightly above our bottom line, and we don''t want to "give the house away"...that was always our thing.

We have had our eye on a certain property...which was the driving force in selling our home. It was a foreclosure way below market value. We loved the condo, the community and wanted to move there in the worst way. Sadly, however, we found out that the property went into closing contingency yesterday...the bank is still accepting back up offers, but for the most part it has been sold.

We know in this market it is bad business to turn away a buyer...and if this guy can work his stuff out, he very may well buy our home for our bottom line after negotiating with him. He actually found our agent by finding our property...he''s very serious. But the problem comes in with the fact that he needs to be moved in by April 1st...which isn''t exactly a quick closing, but it''s not long either....and we don''t have anything else to buy. Nothing.

We''ve looked at other homes, but I haven''t fallen in love like we did with the condo in the clubhouse community. We are very picky. My husband wants to open our search to larger homes...but I don''t want nor do I think we need anything large. My husband feels that we''d find something amazing if we weren''t closed off to all options...but my issue is that I don''t want to be responsible for caring for a larger home. I also don''t want to be rushed. I''m scared, to be perfectly honest.

We''ve heard rumblings that other foreclosures from the builder may be going on the market...but since the bank doesn''t flood the market, the timeline is all questionable.

So....

 

[meresal]

This guy sure has alot of demands for being the "buyer".
1. VERY low price
2. HAS to be in by set date...

HUGE Red Flag: MOST people's approval amount goes UP the longer they wait to buy a house. If the bank lowered it, then there has to be a legitimate reason.

I would not even bother with this guy. More than likely, I can see the funding falling thru at the last minute anyway, or he backs out because he wasn't successful in bullying you and your husband into the lower price.

ETA: Instead of taking the house off the market, have you thought about lowering the asking price just a little to try and bring in more people?

 

[Italiahaircolor]

I did question why the financing lowered...apparently he is recently divorced and that effected it. But, unlike what you said, financing can go both up and down all the time...if you open a credit card, it may go down...if you close open accounts or pay off balances, it may go up. It''s a funny thing. I trust that my realtor wouldn''t be wasting our time if this wasn''t solid...she knows how we operate. But, like you said, this guy does appear to have a lot of "demands"...this is a buyers market and buyers are bolder now than ever before because they can get away with it.

If he really wants the house and can come up with the cash...so long as we have somewhere to go, we can work it out...but its the "no where to go" part that makes me want to pull the house all together. Which is really why I want advice....

I''m not interested in lowering the price right now. I''m priced incredibly fair for our area and our home, I am probably below fair market value when all is said and done. I really believe the reason we''ve had almost no showings is due largely impart to the holidays. We listed right before Christmas, that''s a tough time.

 

[Hudson_Hawk]

If you can sell the house for a fair amount that''s in line with fair market value, then I think you have a good deal regardless of his financing issues. Would you consider renting in a month-to-month situation until you found something you like more? Also, is there any chance of approaching the bank to express your interest in other properties?

I agree, I question whether this guy is even going to get the financing he thinks he''s going to get. I''d hate to see the deal fall through in the end, but I''d also hate to see you miss out on your chance to get rid of the house.

If you don''t mind me asking, how far off the listed price is he? There''s a big difference between listing for $150k and getting an offer for $99k and listing for $500k and getting an offer for $450k.

 

[VegasAngel]

Just throwing this out is your house listed as appointment only? If so that will limit the number of showings.

 

[Hudson_Hawk]

Actually Italia, this might be a good rental property opportunity. If he''s having financial issues due to his divorce or whatever reason (and these days it could be a minor infraction that cause the bank to pull back) and he loves the house, would you consider renting it to him? How dependent are you and DH on this sale for your next purchase? Sorry, I''m sure you mentioned that in one of your previous house posts, I just can''t remember.

 

[Steel]

Congrats on getting an offer!

If I were you I would bite his hand off. Take the offer.

My reasoning is this. I sold a few years ago just before the market turned in the public eye; it had already gone down but nobody would acknowledge it. Agents suggested we sell for 30k ish more than the price we sold. To buy our house back now would cost us 80k less than we sold. I felt at the time that I could get 5k ish more than the offer if we pushed our buyer. I sat down and worked out that if I jinxed the sale I would potentially lose getting that level of offer again plus I would have to make each mortgage repayment until it did sell. So I thought that at a min of 6 months on the market (being optimistic) at €800 was €4800. That was the extra payment I wanted our buyer to make (to satisfy my greed). So I took the offer and am delighted I did. There are similar houses for sale there for 80k less than we sold.

As far as you are concerned I would put your living accommodation concerns to the back of your mind. Just rent until you get the perfect house. But offload your home asap. Who cares if the agent / buyer are playing games. Accept the offer but demand an early exchange. You can close for April if it floats his boat but get him locked into that sale.

And look at all types of house. I don''t know if you had a wedding dress thread but I imagine you thought you would like x type of dress and found another that was juuust right. It is the same with houses. If you don''t look you won''t know. And then your DH will be entitled to wave his ''I told you so'' waggy finger at you.

Good luck!

 

[NewEnglandLady]

I don''t think you have anything to lose by negotiating with this guy.

The only two risks here are that a.) he won''t come up on his price and b.) his financing might fall through.

It sounds like he''s bound and determined to buy this property and there is nothing wrong with you sticking to your guns. Let''s say he offered 10% or something under asking--just counter at something really high--like 2% under asking. This will let him know that you''re willing to negotiate, but nowhere near his price. If he''s serious, he''ll come up, if not, then you''ve stuck to your guns and lost nothing.

In terms of the financing falling through, just be sure to take backup offers in case that happens. By taking backup-offers at least you can protect yourself in case his fnancing falls through again.

I agree that the lack of foot traffic may be due in large part to the time of year. Still, this guy is the only potential buyer right now, which makes it less risky for you to try to negotiate. The buyers that are looking right now are probably much more serious about buying than the open house foot traffic-type buyers you get in the spring and the summer. And inventory is just going to keep growing now that we''re passed the holidays...

Was the foreclosure the main reason you guys put your condo on the market? Now that it''s off the table (though the financing could still fall through--it happens often with foreclosures), are you less interested in selling the condo?

 

[MichelleCarmen]

I'd sell to the guy and look for a rental. I am confused though. . .I though you lived in a townhome, not a house?

How many sq feet do you have now? With our 2,400 sq foot home and two kids, it is a lot of maintainance, plus we have a 1/4 acre yard (which is A LOT for where we live). Most of the neighbors in the newer homes in the same area have the postage stamp yards. As a full-time employed woman, why not look for a larger place and hire a housekeeper and yard maintaince (some of my neighbors hire teenagers to mow their lawns during the summer)? Wouldn't you rather have a larger home than end up finding yourself cramped into a small place?

Our last home (townhome condo) was 1,900 sq. feet and it is AMAZING how much better that extra 500 sq. feet feels (we have four bedroom 2.5 bath) We also have four people. . . so that comes out to 600 sq feet per person.

Also, if you plan to have kids, keep that into account. Master bedroom for you, one for a child (or two if you plan to have two bedrooms) and another for an office.

 

[Italiahaircolor]

Right now we are in condo...I''d be buying another condo if I could get the dream home. But it looks like we''re not getting it, so my husband wants to go balls to wall...5 bedroom, 4.5 bath the whole "nine yards"...

I am going to work with the buyer I believe. No reason not to. If it doesn''t work, it doesn''t work, right? But at the very least, we tried...

 

[MichelleCarmen]

Do you plan to have kids? Five bedrooms seems excessive unless you do! One major downside of a large home is heating such a large residence. Five bedrooms is going to make your furnace work 24/7 to keep all those rooms warm.

Since ours is so big, I only turn the heat on around 3:30 after the kids are home from school. During the day, I wear sweaters and if necessary, a fleece jacket rather than crank up the heat.

My husband and I already talk about downsizing as soon as the kids move out.

 

[meresal]

If it were my personal decision, I would not look for a bigger house just to find "something". Do you have any idea what his offer is going to be? How much lower than asking is he talking?

I agree with NEL, that maybe foot traffic will pick up after the season. Isn''t it somewhat like a blizzard in Chicago right now? To go from Christmas season into constant snowfall, I would guess that this is not "ideal" house-hunting weather?

 

[lucyandroger]

I would at least wait and see what the buyer''s offer is. If you think you can come to a fair agreement, then I think you should sell your current place, move into temporary housing and take time to really explore all of your options. Maybe a "medium" sized SFH would be a good compromise or a larger condo. I think it would be nice to have lots of time to look around and fall in love with another place.

 

[steph72276]

I would go ahead and negotiate with him....it can''t hurt to set your bottom line. However, is it the norm that the realtor would represent both the seller and the buyer? It seems like a conflict of interest....does she know what your bottom line number is?

 

[dcgator]

Date: 1/8/2010 2:57:25 PM
Author: steph72276
I would go ahead and negotiate with him....it can''t hurt to set your bottom line. However, is it the norm that the realtor would represent both the seller and the buyer? It seems like a conflict of interest....does she know what your bottom line number is?

The "norm" depends on the state. Each state has different rules regarding the abiltity of agents to act as a buyers agent but also work with the a seller. Example, in Florida (I know I am in DC, but I have a FL realtor license), it is legal for an agent to both have a seller, and then find his own buyer to purchase his property. They are called a transaction broker. However, at the point that an agent is representing both buyer and seller, their fiduciary duties change from full discloser to limited disclosure, among other things. At that point, the agent is working under the duty to present all offers and act in a a fair and dilligent manner for both parties.

Beyond the legality, I agree with the majority of posters here. Go ahead and proceed with negotiations. If the guy can''t make the financing work, then you are no worse off than you are now. You can also word the contract to cover yourself from his inability to secure financing, such as put in contingencies like paying for moving costs, etc. (ask your agent). IMO, if you can get an agreeable price on your place, it will likely cost you a lot less to rent in the current market (just check out the incentives some apartments are giving or take advantage of any rentals within your same building) than paying mortgage or dealing with value declines due to foreclosures in your building.

Going into your new place, don''t feel rushed either. Take the time to find a place that you AND your husband can both agree on. Perhaps the solution would be to opt for a townhouse with little to no maintenance but the extra room your husband is looking for.

Either way, GOOD LUCK!

 

[Mrs Mitchell]

I didn''t vote, because my preferred option wasn''t there. I''d carry on with the buyer you have, but with caution and not too much optimism. Meanwhile, I''d widen your search for a new property, beyond just looking at bigger homes. I''d look at every type of home possible in any area you''d live in. You might be surprised at what you fall in love with. I wouldn''t base it on property size, either. Just look at everything and anything until you find one that feels like home. It might be somewhere that on paper, you''d never have considered in a million years. A wildcard!

Jen

 

[lyra]

I said look at larger houses but that''s not totally what I think. I think you should work with this buyer, and if it all goes through then great--you are free to purchase your dream home when you find it, as soon as you find it. Renting on a month-to-month lease sounds like a good interim compromise for you since you want to be able to move on something as soon as you find it, and having your house sold is the best way to be able to do that and would make financing a breeze. (I think I remember you also own a condo you''re renting out). You never know when another property might pop up. Having this one sold is a major bonus to you. Good luck!

 

[steph72276]

DCGator, thanks for clearing it up. I was just seeing the possible conflict of interest there if Italia had mentioned to the agent her bottom line b/c said agent could then instruct buyer to bid that amount. But anyway, hopefully it will all work out. I also like the idea of renting month to month so that you can properly search for a new home without feeling rushed into something. Perhaps corporate rental type places that are furnished and just put your things into storage for a bit?

 

[Bella_mezzo]

I would sell if his financing wotrks out/gets locked in and look for a place you love. If you dont find anything you love, move into a month to month rental. It''s tough to find a buyer right now and if he will pay your bottom line price do it. You''ll be in a great position come spring when more properties hit the market!

 

[somethingshiny]

Date: 1/8/2010 4:23:31 PM
Author: Mrs Mitchell
I didn''t vote, because my preferred option wasn''t there. I''d carry on with the buyer you have, but with caution and not too much optimism. Meanwhile, I''d widen your search for a new property, beyond just looking at bigger homes. I''d look at every type of home possible in any area you''d live in. You might be surprised at what you fall in love with. I wouldn''t base it on property size, either. Just look at everything and anything until you find one that feels like home. It might be somewhere that on paper, you''d never have considered in a million years. A wildcard!


Jen

Completely agree!! The only house I''ve ever fallen in love with I wouldn''t look at for 6 months. When I walked through the door it was instantaneous "This is home."

 

[Italiahaircolor]

Thank you everyone for your advice and suggestions!

We are going to wait until we receive a formal offer before getting our hopes up. If, for whatever reason, he can''t pull it together I don''t need to be disappointed over that as well.

I am heartbroken, really, over the condo being sold. I knew in my head that this was a strong probability, but I never really let my mind go there because I loved it so much. Letting it go is hard because I am scared nothing else with make me fall in love like it did...but, it''s gone so I have to start looking elsewhere.

We''re going out this afternoon with our realtor and my mom. We''re going to see approximately 4 houses. Another condo...and three homes. I picked the condo...DH picked the homes. I guess at this point I have nothing to loose by looking...who knows maybe I will like a large home. I mean, it was always in "the plan"...but it was a different plan...I never thought we''d go into a custom home in a new community. I thought if we bought a home we''d be buying an old historic and rehabbing. But, I keep chanting to myself "be open, be open"...so we''ll see...

Thanks again, all!

 

[Hudson_Hawk]

Good luck Italia!! House hunting sounds like so much fun.

 

[Italiahaircolor]

Well, we're back...

We saw three homes today...that's all I had the mental capacity for. Never made it to the fourth!

The only one that stands out in my mind was absolutely beyond words beautiful.

The home is located in our target zone. Although in a different neighborhood than we originally planned.

It was amazing. Flag stone accented exterior. 4 bedrooms, 4.5 bathes...each room had its own, including a nicely appointed powder room. The floors were all walnut, with inlayed tumbled marble in the entry way. It had a beautiful office with french doors, a healthy amount of built-ins and room enough for both my DH and I to have our "area". The kitchen was ... out of this world ... two toned cabinetry, thick granite tops, top of line SS appliances. There was a butlers pantry

with two beverage centers--one for wine, one for beverages. The master had a doored off sitting area with fireplace and coffee bar. The bathrooms were perfectly appointed with glass tiles and high-end finishes. One of the other rooms was considered an "in-law suite" with a hotel-style mini kitchen and small sitting area. No one had ever lived in this house, a builders spec home being sold off so the builder can move on. It was a fantastic price for the detail...It wasn't "huge" around 4,000sq without the basement (give or take) but was carefully planned out and you can tell a lot of pride went into the design and crafting of the home.

We loved it. What's not to love, right? But it just reaffirmed the fact that I'm not ready for a house of that magnitude. It was just to-to much. On a smaller scale I would have written an offer in the kitchen...but walking away felt right. I don't have enough furniture to fill the house. The rational part of my brain told me that even furnishing the house would be a large fortune and no small feat. I walked away knowing that if we ever needed a house that size, that would be fine...but right now it's just the two of us with a handful of Chihuahua's...we have no children, and our rare out of town visitor hardly calls for hotel-style accommodations.

Back to the drawing board...but at least I appeased the DH. I think we're both on the same page...that there must be a happy medium. We're fortunate to have the ability to look at several different price ranges...but we need to be realists. I would be so much happier in a smaller home, another condo hopefully!

 

[MichelleCarmen]

Best of luck, Italia. My dh and I were talking this morning about financial goals and we both are 100% in agreement that after the boys move out, we''re going to downsize to a home around 1,200-1.500 square feet. Dh wants a timberframe and I''m okay with that. Since we''re in the NW, there is lots of waterfront property around and we''ll buy a lot and build.

A 4,000 sq foot house sounds way too high maintaince! Too much space for two people!

 

[somethingshiny]

I agree that 4000 sq ft is too much. DH and I were just talking about this last night. We live in a small home now and we''re expecting a baby. A family of 4 will be tight in an 1100 sq ft home! BUT, we figure that there is really no need for anything larger than around 2500 well-designed sq ft (without including basement). Anything bigger than that and I''d be overwhelmed with the daily upkeep ( I''ll never be so lucky to have a maid!) A friend of mine has a home that is probably between 3700-4000 sq ft and just walking around it is a chore! She does have an indoor pool, so I wouldn''t turn it down!, but it''s a lot of house!

Good luck as you continue your search. If nothing else, seeing homes that don''t fit the bill help you to KNOW what you really want/need.