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[larryc]

Friends: I need some financial/real estate advice. As many of you know we are moving this summer. Our house has been on the market 6 weeks with a fair bit of interest (2-3 showings a week) but no offers until yesterday. We pick up the story from the Moving Thread, where Pry said:

Hope everything works out with the house offer, Larryc.

They are being dicks. Our house appraised at $84k (rural Missouri, lowest housing prices in the nation!) but we put it on the market at $79.9k for a fast sale. They offered $70k cash. We were startled by the low offer, but like the cash part, and swallowed hard and offered it for $76.5k. They just came back at $72k with an implication that they will go no higher.

I think we should counteroffer $75k and take whatever they come back with, even if it is still $72k. We have a moving van coming in 10 days and need to get out of there. I would rather not deal with this long distance. It seems crazy to put our feet down over $4-5k.

On the other hand, my wife is pissed. We have put a lot of ourselves into this house over the years--lots of sweat equity, which she feels is being belittled by the low offer. She fixates on the percentage of the asking price that we are giving up. More reasonably, she points out that we have a place to live on the other end of our travels and that our mortgage is only $400/month and says we can afford to wait.

So, forumites, what would you do? I am supposed to call our agent back tonight and let her know. We are going to offer $75k. What if they stick to $72k?

[marlborough]

The hardest part is separating the emotional value from the value of a clean break.  I'd take the lowball and be glad to see the end of things in the rearview mirror of the moving truck.  If the real difference is $4,000-5,000, is the hassle and the risk really worth it?

Can you do something sneaky, like counter-offer $75 but "throw in" a year or two of home warranty (approximate cost:  $500/year)? 

[pedanterast]

Given the current climate, sell.  The dollar difference isn't as great as the percentage difference since you're in such a low-cost market.  And, as you point out, it's time to go. 

[llanfair]

Given the current climate, sell.  The dollar difference isn't as great as the percentage difference since you're in such a low-cost market.  And, as you point out, it's time to go. 

Me too - now's not the time to be gambling with the market.  Besides, look at the few thousand dollars' loss as in investment in your peace of mind.

[dr_starbucks]

How long does it take for a house to sell in your market? Consider the cost in keeping the house should you reject the offer (upkeep, mortgage payments, etc.).

I've bought and sold five houses in the last five years and understand the frustration in the buyer's apparent lack of respect for the hard work in renovating and upkeeping the house. And such work rarely results in increasing the value of the house, unless square footage was added.  Look at it this way: the good and attractive condition of the house, due to your hard work, may have been what attracted the buyers to your house.

[dr_starbucks]

Correction: I bought and sold five houses over the last twelve years. Sorry.

[undisciplined]

Take whatever they offer and get out. We just did this. In our area, the average time on market was 5.5 months. Think about the cost of upkeep while you try to sell. Things are getting worse. Take the bird in the hand.

[verbena]

I think we should counteroffer $75k and take whatever they come back with, even if it is still $72k.

I agree with you ... and everyone else here. This is not the time for you to be taking risks with real estate. Best of luck with this!

[notaprof]

The hardest part is separating the emotional value from the value of a clean break.  I'd take the lowball and be glad to see the end of things in the rearview mirror of the moving truck.  If the real difference is $4,000-5,000, is the hassle and the risk really worth it?

Can you do something sneaky, like counter-offer $75 but "throw in" a year or two of home warranty (approximate cost:  $500/year)? 

Remember, to the buyer it is a house not a home.  It was a home to you and that is much more valuable than a house. What are other houses selling for in the area?  Is yours out of line with what surrounds you?  Are you in a good school district?  Are there other factors that add to the appeal of your house other than your sweat equity?

We had great trouble selling a house in rural south and decided to leave it on the market, it was there a long time with only a couple of offers, about as low as yours in proportion.  Decided to rent it out for a year and try again, even worse luck, plus the wear and tear of "who cares what we do the house, it is not ours" renters.  We had trouble with continuing insurance coverage when the house was empty.  There is the upkeep of the yard, and repairs and payment to the rental agency.  If I had it to do over again, I would take the money and run.  Plus the all cash part is really attractive.  But as they say all the time her YMMV.

Good luck, I'll send some vibes that someone else makes an offer and you get the two in a bidding war that gets you closer to covering the love and care you and your wife put into your home.

[undisciplined]

BTW I don't consider that a truly lowball offer. We received an offer roughly 2/3 of our asking price. That's lowball (and typical in this market). From there we negotiated, coming to settle roughly in the middle. Luckily I had priced the house a good 10k above what I ever dreamed I would get for the place. But it is in an unusual location (location, location, location!) near a large lake, etc. We also sold it as-is after  being absentee landlords for 7 years. It needs a lot of work and we are simply too far away to screw with it anymore. Not having to do any repairs prior to sale saved us a bundle. Mr. Undisciplined was willing to sell it for less than we got--that's why I was put in charge of all the negotiations. In the end, we were happy, they were happy. That's what counts.

[wiley]

How long will it take you to earn the difference after tax (e.g. via summer teaching)?

I'd probably take the lowball offer.

[pink_]

I think I would sell and be done.

[spork]

Tell your wife that the low offer is not about her, or the two of you, or the sweat equity you put into the house.  The buyers are simply trying to get the best deal they can.

What are market conditions in your area and neighborhood?  Any appreciation or depreciation since you purchased the house?  What have prices done recently?  A lot of people are looking at the house, so the market isn't dead.

You put the house on the market at 4.8 percent less than its appraised value.  You counter-offered 8.9 percent less than appraised value.  That's a good deal if home values are holding steady in your locale.  A price of $75K is 10.7 percent less than appraised value, an even better deal.

Anyone with $72K in cash can easily qualify to finance for another $5-10K.  Yeah, the buyers get stuck with finance charges, but that's really minimal for such a small loan.  They could do it as a cash advance on a credit card even.  In a sale you will get your money whether they pay cash or finance -- it doesn't matter.

$400 per month mortgage plus insurance and upkeep X 12 is a little more than $5000 per year.  That means you could wait for almost a year before your net proceeds from a sale then at $76.5 K are lower than a sale now at $72K.

I sold my house at the end of May after it was on the market for a month for my asking price plus $5200 in closing costs.  My asking price was what I paid for the house 18 months before, plus inflation.  So basically I lost $5K on a $175K house, or less than 3 percent.  My house was located in a neighborhood where prices had not declined very much.

The real question is:  what's the value to you of saying bye-bye to the house when you move?

[bread_pirate_naan]

I think we should counteroffer $75k and take whatever they come back with, even if it is still $72k.

I agree with you ... and everyone else here. This is not the time for you to be taking risks with real estate. Best of luck with this!

Larry, I have used my weirding ways to look at your question.  They suggest that your potential buyer is willing to pay more.  I suspect that your buyer has recently come into a great deal of money, which would jive with a cash offer.  Negotiate.

I suspect from the timing of my reading of your post that you have already spoken with your agent.

Good luck.

[kedves]

If it's about money, then it's not personal.  When it's your house, it's so easy for those to become intertwined.  What does your real estate agent say, and how much do you want to move on--those would be my questions.  Six weeks isn't a long time, where I am.  This is specific to your location.

I don't want to get into the arson scenario.  Don't tempt me.