Thanks for visiting my blog - I have now moved to a new location at Nature Networks. Url: - Please come visit my blog there.

Tuesday, October 7, 2008

How not to negotiate the price on a house.

Among all the tons of things going on in my life - as if it weren't busy enough - my girlfriend and I made an offer on a new house yesterday. With the market the way it is, houses just aren't going anywhere - and this one's been on and off the market for at least 6 months, now. The only offers they've had in that period were from us - so clearly this isn't a hot property. Even for us, it isn't a perfect place - but it fits what we're looking for. After a stunning lack of interest on the house, the developer took it off the market for August and September, and just recently re-listed it about a week ago.

Indeed, given the housing market's poor state, the developer has also been forced to drop the asking price by about 10% from their original listed price. Of course, in the way of real estate, it subsequently turned out that the developer was claiming their house was 1,500sq. ft., when it was really closer to 1366sq. ft., so I don't know that they had much choice about dropping the price - but the listing was made with the larger square footage, so I don't even think that was taken into account.

With all that going on, we made an offer about 5% below asking price - which isn't unreasonable for the price per (real) square foot in that neighborhood. (It's actually slightly higher, so it wasn't a low-ball offer by any means.)

In the game of negotiations, you'd expect the developer to counter with a price closer to what he originally had asked for. That way, both parties can converge on something agreeable to everyone. Apparently, that's not what the developer had in mind.

He counter offered at $15,000 above his listed asking price!

Needless to say, after a few rounds of discussions, this deal isn't happening. Fortunately, house prices will only continue to drop, so when we offer again in a month or two, it'll be even lower. (=

I can only shake my head and wonder what's running through the developers mind.



Post a Comment

<< Home