I have a listing on a home and i just received a offer that is 10% less than the asking price (i'm in a major metropolitan area, and that equates to ~100K!)

The agent presenting the offer used the following strategy:

1 Found 10 homes that sold in the past 12 months in this zip.
2 Got tax records
3 Computed the % difference between sale price and tax value
4 The the average of the % difference
5 Got the assessed value of this home and applied the average % difference.

A few more notes on his method. He chose homes with similar lot size, same above grade sf (not total finished). He did NOT chose homes that are a similar style (he included ranches and split levels where this home is a classic center entry colonial).

In my experience and understanding, tax valuation and market value often do not correlate at all. While i appreciate his analysis as an attempt to remove the home by home variability, it seems to me that he is blowing smoke by using math as a justification for lowballing an offer.

Yes, there are direct comps for this home based on age, size of lot, size of home, style of home, neighborhood feel, and location for this home.. they are just not on this street (but they're within a 2 min drive).

I want to know if i am missing something with his approach, because my gut tells me to stick to my guns, present my comps and not counter with a lower price.

Can i get some thoughts from some of you generous experienced realtors?!

Thanks in advance,

Waterfront

I'd say first off that comps don't matter...what does your seller think of the price? and where would they like to counter?

You can always spin numbers to justify whatever position you want to have...They offered 100K less than your asking price. What does your seller want to do? What would your advise be to your seller?

Right now, if they sign that offer, their house is sold for $900K (assuming terms are ok with everybody). If they don't, they're going to either counter or walk away. You know your market - what would you do if you were in their shoes but with your market knowledge?

Also...chances are the market's changed a bit over the past 12 months...I wouldn't call year-old comps very accurate...but then again, given the state of the market around most of the country, those older comps are probably skewing things in your favor...not the buyers...

for real...tax comp blah blah blah...tax and market value are seperate in my area. I have a little double wide listing for 37, rather ran down. Last year the county appraised it at 79k! Recent comps sold almost new in the area arent close to 79k. What does your market say? What are the recent solds? Do you have anything to justify with a counter? If not get with the seller.

First of all, i can't repeat on this forum what my seller said...let it suffice to say there was language. Counter? I'd have to talk him into it...and it'd be a hard sell.

I am surprised at the comps they chose. I think I want a feel out chat with the agent about his experience in this particular market area...his office is far away, and the comps are (in my opinion) quite narrow.

We'll see...thanks for your input!

Things to ask the buyers agent.....

Is your buyer purchasing for themselves or is this an investor?

If it's an investor are they planning on fliiping or holding as a rental?

You would think to yourself buyers agents woudl never give out information but that is so untrue?

Donald Trump is the master of gleaning information from people without them even knowing they are giving information away.It's all in how you say things that determines how you get the other party to mistakenly give away part or all of there postion.

Almost everywhere right now it is a buyers market.Why is your seller selling?How motivated is he to sell?

You can justify numbers back and forth by pulling different numbers and waste ALOT of each others time.Bottom line counter back at what your seller wants to do and see what happens.If they are really wanting th eproperty they will come up considerably if not the deal is dead and time to put more energy into other possible buyers.

This is also assuming you didn't take an overpriced listing which in that case no matter what you do it won't sell.

Now it is time to play the game. Have your seller counter back even if only for $1,000 less or even counter back at full price.. It will tell the buyers you want to work with them but they have to get serious before you get serious.

This buyer likes the house and they can afford it. You have to talk them up in price. Forget the comps if you are sure it will appraise.

This is a head game. This is negotiations. Keep the deal alive no matter what.

Let us know what happens.

Well, we countered with a 3K drop and a letter that pushed value, uniqueness, potential appreciation (there deveopement in the area and new businesses moving in bringing a LOT of people), and a couple of different valuation strategies (such as directly relevant comps! what a novel idea!) to give them something to think about...and more.

I positioned the owner as willing to wait, no pressure to move, etc...and now we wait.

Thanks for all your help! I'll keep you posted.

You've done what you can and if they don't respond then you know they weren't serious.

Thanks to all...as expected, we didn't come to terms. Thanks for all the input, it was very helpful.