Quote:
Originally Posted by DoubleF
Why not be as bold to identify a specific house that might be receptive to a stink bid in Auburn Bay or Cranston and throw a bid lower than 8%? IIRC, January and February are low sales months. Maybe if there's a house that has been on the market for a few months already, drop a stink bid, if they counter too high, walk, but say if they change their mind in a month about your offer, to let you know.
The worst that could happen is that the other party says no to your offer. The best case scenario is that you might be able to get that home you want within your budget. I have a friend who took out the other party at the knees for an inner city home with this approach. He knocked off around $150K by dropping a stink bid early in his search and stuck to his guns when the owner contacted him a month later. I don't think you can knock of $150K, but perhaps you might be able to knock off enough to be within your budget if you find someone willing to tango.
Is it also allowable to ask the realtors to talk to one another to see if certain arrangements could facilitate a price drop?
Some families are ok dropping the price to delay the possession date to something a bit later so that they have less headaches in rushing out of the home. Some might be ok renting the place for a few extra months after the possession date while they prepare to leave. I hear stories of some families selling their home, paying movers to put everything in storage and hanging out somewhere temporary for a few months. Usually it's a situation where someone is moving away and wants to make sure they have ample time to sell the home so they're not sitting on an empty house after they leave or sometimes it's someone prepping to get ready to move into a house they're building.
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This strategy has to be used very carefully though. You run the risk of simply pissing a seller off where they will just ignore you. If you had a preference to this specific house, negotiations have started on the wrong foot and chances are you won't be getting it for what would have been attainable had you come in with a proper offer. To me a proper offer is an offer with justification. Whether or not the seller agrees with the comparables or logic used, it is at least a reason you reached the number you did. I also don't believe he has the benefit of time on his side to wait people out.
As you say, Jan and Feb are slow as it is and when you combine that with the tighter lending rules as well as excess inventory still floating around from the last 12 months, it makes for a slower than slow time period.
If you are pulling numbers out of a hat based on a 8% below asking method, you might get an offer accepted on a place which was already 5% overvalued and therefore not the deal you thought you were getting.
If you are offering on a property which has minimal equity, chances are you are wasting your time. The bank won't physically let those people sell without writing a cheque for the balance. Someone in a position to write a cheque for 10, 20, 30+k usually isn't in as much of a desperate situation.
Assuming you are primarily focussed on the deal and the house itself comes second, there are strategies to find and narrow in on these places without having to go through the process of viewing, writing and being rejected.