So last night I received an offer for my listing on 1535 E Cheyenne Street in Gilbert (here is a link to the property). This home is a rehabbed property that an investor bought three months ago for $191,000 in foreclosure. The home has been on the market 28 days and we’re asking $237,900. We put new granite countertops, travertine bathrooms, new carpet, paint, appliances, fixtures and landscaping. Here are the details of the buyer’s offer:
- $200,000 Cash Offer
- Contingent on the buyer’s home closing (their home is under-contract and through the inspection phase)
- $5,000 Earnest Money
- 12/3/2008 Close of Escrow
Essentially, the buyer’s came in $38,000 below asking price or 16% (FYI the area is selling at 96% of asking price). Obviously, the buyer and buyer’s realtor know that we paid $191,00 for it, so for them to think we would sell it for anywhere close to $200,000 with only 28 days on the market is just ridiculous.
Now, I see this as a positive situation and I don’t take offense to a lowball offer like some agents do. The question is, how would you counter this offer?
There are two notions of thought that I consider in this situation. The first is that you counter at a firm price and say that you’re not here to play games…take it or leave it. The second is that you come down to a price that is close to what you would settle for, therefore leaving a little more room for negotiation.
What are your thoughts? I’ll drop a post tomorrow to let you know what I countered at and what my rational is…
{ 1 comment… read it below or add one }
I would take it. As a buyer that has capital sitting and i’m in a short term lease, I have seen homes here in the west side go for 73 a foot.
If a seller doesnt like my offer, and doesnt want to play “games” then I move on to the house next door with the same layout and a for sale sign. Be happy you got a offer.
If not, hopefully another offer will come down the line, all the while your seller is making payments on a empty property.