Paper Money - Paper Tales

Saturday, October 28, 2006

Competing To The Bottom!

Here’s another “sign of the times” post from GardenWeb’s Buying and Selling Homes Forum. Look at the numbers; Agent says $325,000, they list $319,000, reduce to $299,900, offer at $285,000 - $2000 cash back, still the deal goes south!!

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We have been in our house for three years, and the builder is still building in our neighborhood. We have been on the market for 90 days, average DOM is about 140 for the neighborhood. When we listed, the price that several realtors came up with after doing a CMA was $325,000. We listed at $319,900 in the hopes of distinguishing our house from the other re-sales currently for sale. Other sellers started dropping their prices in our neighborhood shortly after we listed, and we are now at $299,900, which is the lowest priced re-sale of our model in the neighborhood and lower than the builder's current base price for our model (we also have many upgrades).

The lower price has generated many more showings, and we got an offer over the holiday weekend. The buyers seemed to be extremely concerned about a quick close (less than 4 weeks), so much so that they made sure that we would be willing to close that fast before they would actually make an offer.

Their offer was $285,000, and they wanted $2000 back for closing costs. They were also planning on 100% financing. We countered at $299,900 with $2000 back to them at closing. We would have come down on the price a little bit for the counter offer, but the closing costs seemed important to them since they were doing 100% financing. We also expected them to counter that, and were willing to come down a little bit, but not more than a few thousand, especially because their closing date would require us to pay for storage and temporary housing.

Well, they refused to respond to our counter offer, so our realtor told us to give them our "best price offer". We told them $294,000, with $2000 back for closing costs, take it or leave it. Last we heard (two days ago), they were still considering our house, but were leaning towards buying our model new from the builder, which they had priced out at $320,000.

What??? First, they needed a fast close and 100% financing, now they can spend almost $30,000 more, wait 6 months for a new home, and have the $15,000 deposit that the builder requires? I don't get it. Since we haven't heard back from them, I'm assuming they decided not to buy our house, and I'm beginning to wonder if we can possibly compete with the builder.

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