Expert: Dick Dennis - 2/4/2008

Question
Hello My question is this!
We are currently in escrow with a house we offered 1,098,000. (This was after they countered us)  This is currently the highest priced home in the history of the track in southern Ca.  The home is unique because it has all the up grades, but it does not comp out to the rest of the homes in the same track.  The comps in the area
are in the low to mid 900 for this size home.  Now for the doozy!  My lender sent out the appraiser, and it did not appraise!  They appraised it at $990,000.  What do we do now,  and what do we counter with???  The seller we felt was over priced from the beginning
How do we bring him back down to earth.
It is the best looking home in the track, but I think it is a case of the seller over up gradeing, and thinks he is going to recoope his cash.
What do we do???
One more doozy we are using the listing agent so she is representing him.


Answer
Strike Three! You have three things working against you, Omar. 1. You are attempting to buy the best-dressed and highest priced home in a subdivision. That is a big no-no if you expect to make a profit by reselling it sometime in the future. 2. You are acting like you need it more than he wants to sell. This is not the way to negotiate real estate, especially here in southern California. There's an old axiom: he who wants it most, loses. You must show that you are interested in buying the home all right, but not at the very top of the subdivision. 3. In working with the listing agent, you are working with the one person who is committed to get the seller the most money for his property. And you are making it easy for him/her. He/she has already glorified the property to you and you are virtually sold.

Omar, you are approaching this whole thing wrong. You are circling the bases by touching third base first. You'll never get a home run that way. You need to be represented by someone who knows how to negotiate AND WORK FROM YOUR SIDE OF THE TABLE. I don't know how long the seller has had his property on the market, but in general, this is a slow market. There are exceptions: seven and eight figure homes are doing surprisingly well . . . for that priced category.

The lender, if you were to buy that house, would require you to add the difference in the value . . . between what he wants and what the bank says it is worth . . .  If you (and your wife) want it so bad as to pay his price, a price that is way above the market, then I wish you well. But you are in a price category that dictates you should be represented by someone, a knowledgeable Realtor or real estate attorney who will be looking out for your interests ONLY. Also, just because it is so flashy, it doesn't mean you won't find problems with the house after moving in. Also, you should get a top-flight home inspector, again, to protect your interests.

I do wish you well, Omar.

Dick Dennis       dixiedee13@aol.com