Buying or Selling a Home
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By LongHook
May 16, 2003

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After much looking around and two round trip flights between Atlanta and San Diego (moving from SD to Atlanta...ugh), we finally found a home we liked.

Nothing terribly insightful here, but I do want to make a point that relates to my previously mentioned negotiation philosophy of "get what you want, not what you can get".

We searched high and low for a home (Paulding and Cobb county, specifically Dallas/Acworth/Powder Springs areas) that met our needs, and we looked in the price range from $200K to $350K. That's a pretty wide range, but we were willing to go low in case financing fell through and we were forced to pay cash (financing is an issue since I own my own business -- note, I'm NOT self-employed, I just own my own business) and if we did go low, we were prepared to live there three years and then find something better once we were more comfortable.

After our first round of looking at homes, we found a few candidates. None of them moved us that much; they were all varying degrees of "This would be okay". The one we liked the most was in a nice swim-tennis community, but we got a very uncomfortable feeling from the builder reps. They had a very snooty attitude of "take it or leave it". If we made any comments about something, they promised that they'd take care of it, as long as we signed their contract. They were also irate with us when we talked for them for a while and then mentioned we were still going to look around, like we were wasting their time.

All that gave us a bad feeling, and apparently one of the reps we talk to has a bad reputation in the community for being a liar (she apparently represented another builder a couple years ago and several residents of that subdivision still revile her name).

The house itself we liked, and if we could have locked down a friendly contract, we might have made a bid, but we got the distinct feeling that they weren't going to budge on some things (they were also very irritable when we suggested we wanted a separate home inspection, and they assured us it wasn't necessary, the builder warranty would cover us, etc. etc.).

So all that said, we decided to raise our price a bit and look around some more.

And we found it. The House. The House. THE HOUSE. The one you see in the realtor listing and you say, "Holy crap, that's it, that's the one!"

I had my wife look at it while I was back in San Diego, and she just loved the community (Brown's Farm in Powder Springs) and the house was perfect. It had everything we wanted, right down to the finished basement and Berber carpeting. It was located in a quiet area (not a cul-de-sac, but close enough), had a great lot, beautiful interior, Corian counters and sinks (!), it was just perfect.

The asking price was $355000, slightly outside our official range, but I was more than willing to go that high. The house WAS PERFECT.

So my agent immediately says we need to go in at $345K. My wife agrees. I'm furious.

Hook: "If there is ANY CHANCE we can lose this house by underbidding, I don't want to take that chance."

Them: "This is how it's always done, sheesh."

The home had just come off a open house, and it had only been on the market for 10 days. I was absolutely not going to risk losing this home, because A.) our current home has been sold and B.) We had no clear #2 home to fall back on. This was the house we were in love with, and all the other homes were merely adequate.

After much hemming and hawing, I got them to agree to bidding at $350K w/ seller paying closing costs. The sellers countered with $353K and buyer pays closing costs. Of course the realtor and my wife wanted to split the difference again (grrr), and I just put my foot down and said "Sign it, we're taking it".

They rolled their eyes but agreed. To me, spending an extra few thousand bucks for the home we're going to be in for the next 10 years is a wise investment. Possibly losing out on the perfect home for the next 10 years over a few thousand bucks I would consider nearly unforgivable.

My agent went down to their office with the signed form.

As the seller agent signed the form, a FAX came in with an offer at full price from another buyer.

Now, there's no guarantee we would have lost the house, but there's a good chance we would have been in a bidding war that ended up making the house unaffordable for us. But if we had been a little later and with an offer that was $8000 under another offer, I think there's a good chance the seller would not have bothered countering with us.

The moral of my story, if there is one, is that we got what we wanted, not what we could get (for the most part), and that is what mattered to us. Negotiating just to be negotiating is foolish, and for every "woo-hoo!" you get, there will usually be a matching "doh!" in return.

For me, the "woo-hoo!" comes from getting the house I wanted, not from the odd thrill of knowing that I spent less than I was willing.

One odd thing -- I have no idea what the thought process was for listing it at a little over $350K. If someone was searching "up to $350K", the home doesn't show up. But if someone is searching "from $350 to 400K", it will be at the lower end of the spectrum, and as many of you here well know, people tend to buy a home just above their max price, not at the low end of their range.

To me it would seem they would have done much better pricing at $349K and getting more bidders than losing that entire market of people where the cutoff was at $350K.

As another addendum, one of the homes that we loved was priced at $240K, but the builder was "strongly" trying to get rid of that property since he needed to get the funds back. The house was very cute and my family loved it, but it was far from ideal. The big killer was resale value -- it was a high priced home in a lower priced community, and a smaller home at that. In addition, it had a very steep driveway that would have likely been unnavigable when iced.

We told the builder as much -- loved the floor plan, but we felt the resale would kill us. He dropped the price to $230K. We thanked him, but said that we felt that no matter what, we were looking at a potential loss of $40K, at least, upon resale, because it was a ranch style home in a community without amenities, it was smaller than its comps, and the driveway was a liability, and it was an upgrade over its neighbors.

He dropped the price all the way to $210K if we'd just buy it. Some of my folks were saying, "He's knocking $30K off, you HAVE to take it!" but I was adamant -- the floor plan was great, but even at $210K I felt we'd take a loss, and we knew that because it was a 3/2.5 that we'd have to move out in another 3 years, so resale was a larger concern. But my folks just couldn't get over the discount, they were fascinated by it, and felt I was being stupid for not going for it. I was like "Look, I don't care if it's $200K, it's NOT what we want".

A great deal on something you don't want isn't much of a deal. Saving money on something you couldn't buy isn't saving much.

Get what you want, not what you can get.

Okay, I'm done, hopefully closing on my current home and this home will go pretty well. Whew.


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