© 2018 | Erik Richter
By Erik Richter Posted in The Process on January 6, 2018 One Comment
I looked at it and dreamed a bit. It was an awesome looking home…but I quickly dismissed it by pressing the black ‘x’…it was $40k over our max budget and not even something we would consider.
I actually believe it was this house that made me lower my top-price search parameter to only $5k over our budget rather than $50k, so I wouldn’t dream about these higher-priced homes and get disappointed knowing we couldn’t afford them. The reason that parameter was set so high can be attributed to another faulty notion stemming from my real estate naivety…and, in turn, prompted another lesson learned…we probably would not get sellers down $40-$50k from their asking price. I had heard about it being done, but these scenarios were definitely the exception and not the rule. They only played off as the rule in my mind. No more, though. Out of sight, out of mind!
Fast forward to the week between Christmas and New Years Eve, two months later. I was cleaning up my Redfin favorites. Nothing new had come on the market in our search perimeter, and there were no existing homes for sale either. It was the equivalent of a real estate cricket chirp. Laura and I had commented on so many homes and I wanted to clean up the search for January…a time I was told many new homes would come on the market. Just out of fun, I decided to raise my top price a bit to see if anything was on the market in the area…was it just our price range experiencing a lull? Or every one?
After doing so, three homes popped up. Only three homes in the whole city were for sale at that very moment. Two would never be contenders for us to purchase, even if they were in our price range, since they resided on a major road. Not being on a major road was one of our biggest “must-haves” so family and friends could safely park on the street if they needed to when they come to visit. The third home was Roomerg Road. I remembered it from before and clicked on its link. It had been on the market for a long time. To give you an idea, homes in our search area usually sell within 10 days after going on the market. 30-60 days usually brings a significant price drop. 70-80 means something is wrong with it. This one had been on the market for 110 days.
Why 110 days? Was it a bad house? There was probably something wrong with it, right? We asked ourselves these same questions. But after some thorough research, Realtor help, and curiosity we discovered the truth…and I guarantee it is not because of the house. It appeared to be solely because of the way it was marketed. For starters, it was way overpriced. So much so that buyers who were looking within its price range didn’t want to look at it because they considered it too small, and buyers under its price range weren’t looking at it because it was too expensive…just as I had dismissed it the first time I saw it. A second reason for its lack of interest is because of how it was staged…horribly. The seller had very eclectic design and decor tastes and the house didn’t look cool or hip. It didn’t show well and the potential buyers that did look had a hard time seeing past the weirdness. Third, people were scared about it simply because it had been on the market for so long and didn’t even give it a chance. Trifecta? We decided to take a look and find out.
Had we just found the perfect house hiding under our noses the whole time?
After seeing it in person during the initial tour, our original thoughts were definitely confirmed. This house was a diamond in the rough and could very well be one of the exceptions I tried to block from my mind so early on. The seller hedged a bet that the home’s asking price would be justified by its neighborhood (one that has very high-end homes in it) and its location right in the heart of a ritzy, highly-desired village. What the seller failed to realize is, doing so would also place the home in a weird equilibrium nobody wanted to touch, either due to its size or price. Even the seller’s agent said the home was priced too high, something we were excited to hear, but we still wanted to check for ourselves. After touring, we discovered a few other weird things about the house, but many could be easily fixed and none were really deal-breakers. Had we just found the perfect house hiding under our noses the whole time? It was time to find out. Laura and I double-checked our research and performed the due-diligence we knew we needed to perform. We kept on telling ourselves not to let emotions get the best of us. Here was a beautiful home we could afford in a location we dreamed of being in. To make matters even more interesting, the seller was getting ready to take the home off the market due to inactivity! We could probably even get a better deal than we thought?
Focus!
We did our research and confidently decided to put an offer in. But while we were deciding, another couple swooped in and placed their offer on the house. The nerve! Butterflies and our nerves set in. This was now a competition. We needed to make our offer that much more attractive in hopes of wooing the seller to pick our proposal. It was time to pull out the big guns!
At the time, it gave us hope…which we needed a lot of!
The Greeks had three different methods for winning an argument. Aristotle even called them his “ingredients for persuasion.” They are “Ethos,” “Logos,” and “Pathos.” For our needs, and knowing who the seller was, a grandma, we decided on the latter. Pathos is “a method for appealing to one’s emotions, invoking sadness or pity,” and is the root word for the English word “pathetic”…which is exactly what our next move was. Writing a “love letter,” of sorts, to the buyer, telling her about us, and how much we love her home and want it to be ours’. We even included our engagement photo so she could look directly into our sad, puppy-dog eyes and fall in love with us. Looking back now, the idea seemed ridiculous…what seller, in their right mind, would choose the lower of two offers for their home simply because someone they don’t know asked them to? Slim to none. If anything, though, at the time, it gave us hope…which we needed a lot of!
After submitting our offer, time passed at a glacial pace. The previous two offers we placed on other homes brought a decision within hours. We were told this one could take days. Why? Because the seller wanted to evaluate her options…and there was a potential third offer getting made the following morning! What the heck?! A home that stood transactionally dormant for 110 days now, suddenly, within 24 hours, had three potential buyers?! We found ourselves in a good, old-fashioned bidding war! When it came back to us the next evening via a phone call from our Realtor, the tone in her “hello” immediately told us this wasn’t over. We found out the third couple never did move on the home, and our offer was the higher of the two placed, but it didn’t matter at all. Why? Because the seller countered BOTH of us! Why? Because unlike our strategy of the Ancient Greeks, she employed the “I’m-gonna-milk-these-kids-for-all-they’re-worth Method.” School of Hard Knocks, right there! I guess I can’t say I’m disappointed in her…for a little old lady, she sure put up a good fight!
Our faces were definitely pathetic. Remember that scene in Indiana Jones and the Last Crusade when Indy is forced to get the grail by Walter Donovan? Donovan says to Indy just before, “Now it’s time to ask yourself what you believe.” Laura and I needed to do just that. The seller’s counter was somewhat over our max budget. We needed to really think this one through to decide if we wanted to move forward or drop out. Before this home, we had not even considered looking at homes in the range she came back to us with. That being said, unusually, her counter offer did not scare us. If we got the house, we could see ourselves being there for a very long time. It is the first house we ever found ourselves saying that about, and we felt completely justified by this realization. All others were 3-5 year homes. This one is definitely a 10-15 year-er. There is an amazing Elementary School right down the street for our (hopefully) future kids. It is literally 5 minutes from both our offices. It is smack dab between two Targets. Easy access to the freeway. Awesome layout. Great yard. Ample space. Lilac bushes… Seriously…the list goes on! This thing was amazing…and we wanted it.
When in doubt, and you want the house, always do an accelerator clause.
Alright negotiating-fiend-seller-lady! Here is our best offer! Take it or leave it…
We upped our offer with an accelerator clause built in. If the other couple activated it by bidding higher than our bid, our bid would incrementally go up by a set amount up to a certain limit. This was in place so we didn’t lose the house by a very small amount. Before we started looking at homes, neither Laura or I had heard about this. But after learning about it from our Realtor, we think it is an excellent tool to have in a back pocket if suddenly found in a competition. When in doubt, and you want the house, always do an accelerator clause.
We submitted our counter to the seller’s counter and, within hours, received a call from our Realtor. Was this finally the good news we waited two days for? Had we finally won the house!?
Nope!
She wanted to communicate with us a call she received from the selling agent. He told her our counter to the counter with the accelerator did not put us at the higher of the two prices (because the other couple accelerated their bid also) and while we still had every right to back out, if we saw the price after closing, we would be very disappointed by how much we lost the house by……
Fine! Fine! Fine!
Here! We accel our accelerator! Put Nitro in it! Do whatever! Just get us the damn house!
…That did it…and we beat the other couple’s offer/accelerator by $500. We just won our dream house by less than a high-end iPad and couldn’t have been happier!
Wanting to get the ball rolling, we set up the inspection for the next day…and while the inspection did turn up some issues with the house, they were, surprisingly, minor, and few required our immediate attention. Still, in light of these items, we decided to counter again, as our offer was contingent on inspection. The seller did not fully accept it, but decided to meet us half-way. We didn’t expect anything…so this was a wonderful surprise, and we were able to get the house for significantly less than our final offer!
So…we played the home buying game and definitely won. It was intense, but worth it in the end. Now comes the fun part! While the home is move-in ready, once we close on March 1st, and over the following two months before our wedding, we will be making it move-in ready for us. We will both channel our inner Chip and Joanna Gaines, looking forward to many #DemoDays, making the space our own, and making memories to truly last a lifetime!
We are so happy and excited!
We just won our dream house by less than a high-end iPad and couldn’t have been happier!
I am so happy for you and Laura