I met with my realtor, and we looked at some comps in the neighborhood. She had a methodology where we calculated the price per square foot of comparable homes, and arrived at the conclusion that $315K was a reasonable bid. Of course, the expectation is getting a counter-offer of something in between - $320K for instance.
However, the seller didn't budge at all and refused to move from $325K. The difference between my expected mortgage payments on $325K and $315K are roughly $50 a month, and the difference between $325K and $320K is only $25 a month. The difference isn't huge, and the impact on a monthly payment is minor, but I find it irritating the seller refuses to budge at all.
When I looked at the house again, the seller mentioned he and his wife found new jobs near Miami, and are eager to move and get settled before their kids start school in the fall. He said he could pack and clear out in as little as two weeks, which is plenty early given the closing process takes longer than that. The home has been on the market for a month, received one offer but the financing fell through. It gets quite a bit of foot traffic from realtors, but no other offers as of yet.
Now I do like the home and am not really planning to use this information against them, but again, the refusal to budge is a bit much. Mostly because it makes me think, what if something comes up on the home inspection report? Will the seller also refuse to fix a minor problem? The home did appraise for $325K, so perhaps the seller is confident he can get a full-price offer.
Fortunately, I haven't become so attached to the property that I must have it. I am equally confident I can find a home equally desirable to me. I may decide to accept the terms anyway, because I do like many things about the house, but I am considering another scenario with my second choice. This is the home with the cute colorful garden I took a picture of two days ago.
This home is a little farther away from work, and the entrance to the subdivision crosses a railroad line, which raises the potential of waiting for a train to pass while coming or going. But, it is $50K cheaper and has a reasonable floor plan. It has no pool...
... but that open up another interesting possibility. My realtor says a pool costs about $40K to add to a home, but only adds about $25K in value. Thus, buying a home with a pool is more cost effective than adding one. However, the kind of pool I could add is a little cheaper - an Endless Pool. Triathletes and swimmers everywhere are already familiar with this, but for others, this is basically a pool with a circulation system, which creates a current. I could do useful swimming in this kind of pool, training at home so to speak. I thought this kind of pool was expensive ($20K+) but apparently it is cheaper than a regular pool! I could install it above ground in my second choice's Florida Room, and even disassemble it to take with me should I move. To be honest, I evaluated every home I looked at for Endless Pool space. ;) Several had screened patios that were easily large enough!
My second choice has been on the market for nearly two months, and is already vacant. Thus, the sellers would be so-called "motivated" and I could likely shave a little bit off the asking price. Of course, the calculating logical part of me is already noting that if they had a tough time selling, I likely would as well should the need arise. Overall, my second choice home does have a few drawbacks.
My options are to 1) accept $325K for my first choice, 2) move to offering on my second choice, or 3) just waiting for later. I'll continue thinking this over, and might as some coworkers if they have any input on either subdivision. The fact is I'm leaning towards #1. The home has been shown to appraise for the asking price, which isn't really that bad.
What I'll do is sleep on it, and do some property searches to get another picture of what is selling.