Does this builder have unrealistic expectations?

**jb32** · 02-23-2009, 05:36 PM

My wife and I recently found a home in the Greenville, SC area that we decided to make an offer on. It is a brand new home in a new neighborhood for sale by the builder. The original list price was 749,000. After 3 months on the market the price was lowered to 729,000. We decided to make a lowball offer of 600,000 to see what would happen. Not only did the builder not counter, but his agent wrote our agent a nasty email saying that this property was not a foreclosure, as if we didn't know that already. He also attempted to insult us by saying that 600,000 was all we could afford and thats why our offer was so low. Its my understanding that an agent's job is to present the offer to their client, not give their opinion of the offer. Anyways, we waited another month and decided to make a cash offer of 676,500 contingent upon the sale of our house which is under contract, and contingent upon a home inspection. Once again this was not countered, and we were told that the builder will only counter offers in the 700's and also will not accept any contingencies, such as sale of buyer's pre existing home! I would like to know if a) behavior like this from builders is normal b) is there any way this guy will ever sell his home if he is this stubborn? My thoughts are that this is a buyer's market, so why does this guy think he can do whatever he wants? We expected him to not counter the second offer, which is why we are prepared to make a final offer of 700-703,000. My last question is c) is our final offer even worth making? We love the home, but don't feel the builder is reasonable and are willing to walk away. Any insight would be appreciated.

**Jenie0109** · 02-23-2009, 07:01 PM

Woah, tough situation you're in. I've never experienced such thing yet but all I can say is, things like that is inevitable you should expect bashing statements and you should just let it out from the other ear. Just show your persistence and interest in that property. Soon enough, you will get it. Good luck to you.

**jpoey** · 02-24-2009, 05:47 AM

wait a few months and the price will come down, tell the agents broker about the unprofessional behavior

**jb32** · 02-24-2009, 06:00 AM

Originally Posted by jpoey

wait a few months and the price will come down, tell the agents broker about the unprofessional behavior

Thanks for the reply. I can't tell the agent's broker, because him and his wife are the agency. Anyhow, I'm not concerned with them. I'm not sure about the price coming down because this builder is a pain in the butt. Even though the price has dropped from 749,000 to 729,000, in his mind the price is still 749,000.

**Greg** · 02-24-2009, 09:12 AM

One of the possible side effects of making low ball offers is the chance of pissing off the seller. You did this and now you have to live with it.

If you make another offer at $700,000 you will have made the proverbial "blink" and he won't budge from his price.

If you end up buying this house don't expect too much service from the builder after closing.

**Nco** · 02-24-2009, 09:33 AM

I would say walk away. I was just watching this tv show last night, buy my house or something, and a couple was asking 339k for their house, which was way above market. It sat for a while, and they finally received an offer of 300k. They countered at 329k and then received a one-day offer of 312k. The big-headed seller said to let the offer expire. The agent urged him to take it. The seller had some nasty things to say about that kind of "low ball" offer.

20 weeks later, they ended up selling for 295k to a different person.

Again, just walk away. Let their house sit.

**markbrian** · 02-24-2009, 03:08 PM

Just because you have heard it is a buyer's market does not mean the seller must accept whatever you offer. The builder has to cover his expenses and may not be able to come down to anywhere even close to what you offered.

Was your initial offer based on recent sold comps? It is true as Greg said, that lowball offers will often piss off the seller to the point of not countering. But if your offer was realistic, because it was based on good recently sold comparable properties, then do not sweat it.

And as far as the other agent's notes regarding you initial offer, this may have been meant to be as much of an insult to you as your offer was to the builder. The listing agent may not have enjoyed hearing the builder raise hell about why are you wasting my time, blah blah blah. I have had many sellers raise hell on me because some one makes an offer that is really really low. And they would not counter. Not even a full price counter.

**jb32** · 02-24-2009, 06:00 PM

Originally Posted by markbrian

Just because you have heard it is a buyer's market does not mean the seller must accept whatever you offer. The builder has to cover his expenses and may not be able to come down to anywhere even close to what you offered.

Was your initial offer based on recent sold comps? It is true as Greg said, that lowball offers will often piss off the seller to the point of not countering. But if your offer was realistic, because it was based on good recently sold comparable properties, then do not sweat it.

And as far as the other agent's notes regarding you initial offer, this may have been meant to be as much of an insult to you as your offer was to the builder. The listing agent may not have enjoyed hearing the builder raise hell about why are you wasting my time, blah blah blah. I have had many sellers raise hell on me because some one makes an offer that is really really low. And they would not counter. Not even a full price counter.

The seller needs to get over the "insult of a low offer." I have received many lowball offers. I was never insulted by them and countered all of them just as I did better offers. The reality of my situation is the builder won't accept any offers unless they are in the 700's. The question is do I overpay for a home that I plan on residing in for the next 25-30 years? Recent comps show that most houses in the area have sold for 93-96% of the asking price, however this home is a little bit nicer and has more upgrades than the rest that I have seen. I'm just curious as to what other people would do, and thanks again for the responses.

**markbrian** · 02-24-2009, 08:43 PM

jb32, it is good you can remain emotionally unatached in the negotiating process but sadly many sellers cannot. By your own admission you know that other home are averaging 93-96% of list price, but you offered much less % for a home you say is nicer than most.

There is nothing wrong with wanting to get a bargain.

But it really boils down to how bad do you want this particular home. Is it overpriced compared to the comps? Will you be overpaying if you have to go closer to the list price to get it? Or are you considering it overpaying if you do not get the builder to come off the price by a certain amount?

If you cannot get it at a price you are happy with today, and feel that you will not be happy with that price for the next 25-30 years-then forget about it. Find another home. If you feel it is overpaying, you may never feel truly happy about the house. It is better to not overpay than to overpay and regret it for 25-30 years.

**donrock** · 02-24-2009, 10:53 PM

Do you know what the house is really worth? I'm an ex-appraiser and I've written a guide on doing your own appraisal. Its free and you can get it by going to my RE blog link below in the signature and filling in the request form.
If you can provide enough proof by an appraisal (even if its yours) to show the seller and his agent what the house is worth you might have a better chance of them selling for your price.
Unless the builder is real lucky he is paying a bunch of money on the money he borrowed to build it. You might be able to wait him out.

Good luck,
donrock