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Old 03-10-2013, 03:49 AM   #1
Meggysmum
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Help with Offer Etiquette!

I have two BLT contracts. The first was direct and the second resale. My reasale was priced lower than any other BLT at the time and was exactly what we wanted so although we made an offer it wasn't accepted and we were actually prepared to pay full price anyway so grabbed.

Yesterday we saw another contract to add on. I thought it was a bit pricey so offered less and seller pay closing. It was rejected but no counter made. I felt the offer was reasonable considering others on the market and it was way above what people are getting through ROFR.

What I want to know is how offers work in the US. I am British and for purchases like property and cars you always go in with a low offer and then you counter each other until you are both happy. Is this not how it is done in the States? I set my offer at a reasonable value but would have been happy to meet halfway. In the UK if someone doesn't make a counter you presume they are not actually a serious seller so tend to walk away.

Any advice would be appreciated before I go after another contract!
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Old 03-10-2013, 06:59 AM   #2
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Quote:
Originally Posted by Meggysmum View Post
I have two BLT contracts. The first was direct and the second resale. My reasale was priced lower than any other BLT at the time and was exactly what we wanted so although we made an offer it wasn't accepted and we were actually prepared to pay full price anyway so grabbed.

Yesterday we saw another contract to add on. I thought it was a bit pricey so offered less and seller pay closing. It was rejected but no counter made. I felt the offer was reasonable considering others on the market and it was way above what people are getting through ROFR.

What I want to know is how offers work in the US. I am British and for purchases like property and cars you always go in with a low offer and then you counter each other until you are both happy. Is this not how it is done in the States? I set my offer at a reasonable value but would have been happy to meet halfway. In the UK if someone doesn't make a counter you presume they are not actually a serious seller so tend to walk away.

Any advice would be appreciated before I go after another contract!
There are several possibilities: they could have had another offer. Or they may have priced it at their lowest price. Or you may be right, and they're not that interested in selling. Or they may think that your offer is so low that YOU'RE the one who's not serious. The broker should be able to give you an idea of which it is, or if something else is going on. Then you can decide whether to make another offer.

Also, something I've learned is that if you see a contract that is rare and well-priced, there is an advantage to offering the asking price and terms: apparently, the seller is obligated to accept that. When I saw the "perfect" contract come on the market after a year of watching, the broker told me that if I offered the asking price, it's marked "sold" even before they contact the seller. Now, the seller really could back out of that if they didn't want to sell at all, but they would still owe the broker the commission for bringing a buyer at the asking price.
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Old 03-10-2013, 08:03 AM   #3
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I just sold a DVC contract, and if a buyer had made an offer than was on the low side, I would not have wasted my time trying to come to a deal. My contract was sold in 2 days for $3 less per point than asking price, with the buyer offering to pay all closing costs.

It seems that DVC contracts are selling really good right now (according to my broker). There was probably a more serious buyer offering closer to asking price, who didn't make the seller have to offer/counter offer to get their contract sold.
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Old 03-10-2013, 08:11 AM   #4
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I think things pretty much work the same in the US. Things are always negotiable. If someone doesn't even counter, or at least offer an explanation why they are unwilling to budge, I wouldn't think they were very serious. Remember, many contracts out there on the resale market may be distressed somehow. Either the initial contract was financed and the sellers need a certain $ pp to avoid bringing a ton of extra moey to closing, or maybe it's part of a divorce or estate settlement. But regardless, a courteous seller would offer that as an explanation. If you really want it and it's reasonably priced, go ahead and offer more/full price. Otherwise, if you aren't in a rush just move on. It is not the norm to either refuse to counter or offer an explanation. How does the seller know you aren't actually prepared to offer full price? All it takes is one response through the broker. Keep looking and good luck!!!
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Old 03-10-2013, 08:41 AM   #5
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Quote:
Originally Posted by Meggysmum View Post
I have two BLT contracts. The first was direct and the second resale. My reasale was priced lower than any other BLT at the time and was exactly what we wanted so although we made an offer it wasn't accepted and we were actually prepared to pay full price anyway so grabbed.

Yesterday we saw another contract to add on. I thought it was a bit pricey so offered less and seller pay closing. It was rejected but no counter made. I felt the offer was reasonable considering others on the market and it was way above what people are getting through ROFR.

What I want to know is how offers work in the US. I am British and for purchases like property and cars you always go in with a low offer and then you counter each other until you are both happy. Is this not how it is done in the States? I set my offer at a reasonable value but would have been happy to meet halfway. In the UK if someone doesn't make a counter you presume they are not actually a serious seller so tend to walk away.

Any advice would be appreciated before I go after another contract!
The supply and demand of the property factors in as well in any negotiating process. You would have more back and forth in a transaction if you were the only offer. Reality is they probably entertained a few offers and focused on the offer that had the stronger initial position. They may have countered with that suitor and disregarded yours immediately. When bidding on something you want you may have to up your ante. Good Luck!
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Old 03-10-2013, 08:59 AM   #6
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While any of the situations listed above are possible, I would say that given the nature of BLT both direct and resale the most likely scenario is that the seller has a loan balance that would not be satisfied if they took your offer.

Your strategy is sound, and I would recommend that you keep using it. You may try it ten times, but it only needs to work once. Offer and move on, you'll find a seller willing to work with you. Good luck!
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Old 03-10-2013, 09:47 AM   #7
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Meggysmum,
I think a great deal depends on the size of the contract and how long it had been on the market.
If you were making an offer on a 25 point contract, the seller may have had several offers. There seems to be more buyers for smaller contracts.
If the contract had just been placed on the market, the seller may have wanted to give it more time to see if they can get something closer to asking.
Sounds like no meetings of the minds, time for you to move to your next offer...
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Old 03-10-2013, 10:28 AM   #8
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Quote:
Originally Posted by Meggysmum View Post
I have two BLT contracts. The first was direct and the second resale. My reasale was priced lower than any other BLT at the time and was exactly what we wanted so although we made an offer it wasn't accepted and we were actually prepared to pay full price anyway so grabbed.

Yesterday we saw another contract to add on. I thought it was a bit pricey so offered less and seller pay closing. It was rejected but no counter made. I felt the offer was reasonable considering others on the market and it was way above what people are getting through ROFR.

What I want to know is how offers work in the US. I am British and for purchases like property and cars you always go in with a low offer and then you counter each other until you are both happy. Is this not how it is done in the States? I set my offer at a reasonable value but would have been happy to meet halfway. In the UK if someone doesn't make a counter you presume they are not actually a serious seller so tend to walk away.

Any advice would be appreciated before I go after another contract!
If the offer's too low sometimes you are dismissed as a bottom feeder and not given additional consideration. Some are offended. Still, I don't care if they get offended, someone will take my offer and that's all I care about.
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Old 03-10-2013, 10:46 AM   #9
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Negotiating these things really depends on a lot of factors. I personally don't like the OP's style but I'll explain why. I'll use Animal Kingdom as my example.

Suppose the "going rate" for AKV is $65.

If the seller listed the property at $90 and the buyer wanted to pay the going rate of $65 should they offer $40? $65 is the mid point of 90 and 40 so wouldn't that make sense? But if you were the seller and you got an offer at 40 would you even bother countering? That's what I think is wrong with the OP's approach.

Now let's suppose you saw an AK at $70. Should you offer $60? Then the mid point is 65. I think this strategy is a little more reasonable.

But what I've done (and I made about 8 offers before buying) was to tell the broker "I like this AKV but the fair value is only $65. So tell them I'll offer them $65 but I'm not going to negotiate further". This cuts through the crap and if the seller "needs" $70 because they have a loan then I stop wasting my time right up front. It also lets the seller know this is my final and best offer and they can decide to take it or leave it.

But there are no real etiquette rules for something like buying a DVC contract.
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Old 03-10-2013, 12:10 PM   #10
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Thanks for the advice. The offer was only $8 below asking which I think was a reasonable starting point to show I was serious and the contract was priced higher than most but happened to be the UY I wanted. I imagine the seller probably owes a lot on the contract since it will still be relatively new. Unlike the last resale we bought I am not willing to pay full price and the fees on this one as it is too dear so we will keep looking.

Really we have enough points but more is always handy!
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Old 03-10-2013, 12:39 PM   #11
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I had someone offer me about $20 a point less than we were asking. I countered with the asking price.
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Old 03-10-2013, 12:48 PM   #12
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I had someone offer me about $20 a point less than we were asking. I countered with the asking price.
See, that's all it takes. Then they buyer knows the seller is firm and can either pay full price or move on. Sellers shouldn't fault buyers for wanting to pay less. And buyers shouldn't fault sellers for wanting the greatest price possible. Everyone wants to keep as much $ as possible in their wallet.
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Old 03-10-2013, 01:01 PM   #13
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See, that's all it takes. Then they buyer knows the seller is firm and can either pay full price or move on. Sellers shouldn't fault buyers for wanting to pay less. And buyers shouldn't fault sellers for wanting the greatest price possible. Everyone wants to keep as much $ as possible in their wallet.
That's what happened on our first resale purchase and that was fine. I just thought I must have done something terribly wrong to just get a refusal but obviously just unlucky.

Now we are contemplating SSR instead anyway as hubby really likes it there so maybe the sellers have saved me a pile of money anyway!
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