Home > Uncategorized > What do you mean what the seller paid is immaterial?

What do you mean what the seller paid is immaterial?

It just doesn’t matter, it just doesn’t matter, it just doesn’t matter!

Two transactions recently where people are sooo concerned with the price the seller paid for the home. On the first transaction we represented the buyer, an analytical person who wants as much information as he can get. He researches a property for some time, speaks with the neighbors, pours through data..and after some serious thought, makes an offer. So far his offers have been low and have been turned down, the homes he has considered have sold for a higher price than his offer.  In the most recent one, the seller offered to sell the home for how much they currently owe. He feels this is more then what he wants to offer, so here we are, the last day of the tax rebate, $3500 difference on price. Yes, you are reading it correct, this client qualifies for a $8,000.00 tax rebate. This client is giving up $5,000 because he feels the current owners can’t owe that much and should be able to reduce their price.

Another transaction-We have listed a property a client purchased at foreclosure. He invested time and money into the property with the intention to make a profit. Well, along comes a buyer who wants to make an offer, but his offer is going to be based upon what the current owner paid. Since its present owner has only has the property for a short period of time, it hasn’t been released in tax records. His agent asked us several times “How much did the seller pay?” To which we responded, “regardless of what the current owner paid, this is a prime real estate, in one of the best neighborhoods in the area, and we feel the current asking price is more than reasonable for a home in its current condition,” as it does need some minor repairs. Somehow this buyer found the amount paid and made an offer. His offer doesn’t cover how much the owner currently invested (after commissions, repairs, legal fees, cost of the property.) I called his agent and informed him ”we have another offer coming in today, your clients offer was too low and they should make their best offer” said, “I have been in the business for 24 years and due to the price paid by the seller, they did make their best offer.” I politely suggested to this agent “do the math”. Needless to say, the other  buyer’s offer was accepted

Here is my point, does it really matter what the seller paid? NO! The value of the home is not in direct correlation to what the current owner paid. If someone paid too much for a home, does that mean they should get more for that home?  NO! The intrinsic value of a home does not adjust due to what a seller paid!

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