Is our potential condo purchase a good deal?

Question

Our agent is telling us that if we offered $400k for this condo, it could be viewed as disrespectful and damage negotiations from the outset (he would prefer offering $415-$420 and moving up from there if there is a counteroffer). He/she is telling us this is not a buyer's market (condo market in Boston even with COVID) and then he/she proceeded to go through all the other condos we requested to and found something wrong with each one of them (he didn't do this for the condo we are close to making an offer on though). I hate to think this, but maybe he/she is trying to make it seem like we don't have much leverage in this situation so that we are more willing to make this deal. We already decided what our upper limit is for a condo purchase price. Maybe he/she wants to get us to that so he can make his company more money. Can anyone comment and help us figure out how much leverage we have here and whether a $400k offer is an insult? Any other thoughts are appreciated. Thank you.

David Barnett · Answer

This post is lacking details.  I understand that you don't want to give an address, etc., however a lot of this depends on the part of the city this condo is located in.  I'm not a real estate agent and do not follow the Boston metro condo market too closely.  However, anecdotally, there is a condo in my association that has been listed for 90 days, has had two price drops and still hasn't moved.  I think a lot depends on location, size of unit, etc.  Anecdotally, I think the smaller units are having a hard time moving...

Philip Ganz · Answer

@Brendan Francis  Your agent might be telling you the TRUTH - whether you get there in the beginning or the end is up to you.

On the other hand the agents needs to list and allow you to submit offers.

Where you agent is coming from is a good place because BOSTON is a HOT market.

Jarrod Kohl · Answer

Some markets in Boston are certainly a buyers market, though Brighton can go either way right now, probably still more seller though.

Whats the list price? If its 450 and you are offering 400, then sure why not...just be prepared for a 'no' instead of a counter. I find with any lower offer it usually helps to throw together some comps to say why you are offering X below the list.

Lastly, how long has it been on market. For a lowball this is usually more important than the other factors at that price point.

As far as your agent, you should have a conversation with them about all of this. I have in the past pointed out many flaws to buyers as a buyers agent. Its my job to do so, but he/she should be upfront about that, especially if you and your buying partner are on the same page its good to have someone with a different point of view pointing out things so that you are happy with your choice in the end.

Unless you are spending a few million dollars there will always be some tradeoffs in your house/condo, so its good to think about those things before buying. As someone else pointed out, the 'payout' for the agent is a very small difference for that price point (or really most negotiating price points)

If you really want to offer 400 than go for it. But understand why you want to offer 400. Are you at 400 because that's because you want to pay, or that is what it is worth.

Bill P. · Answer

@Brendan Francis offer your 400 as 120+ days is a long time.  If he wants to sell, he will seriously will consider your offer. You're the one paying the mortgage so protect your position.

Brendan Francis · Answer

@David Barnett, the property is 2b/1b approximately 630 sq. ft sandwiched between two of the green lines in Brighton.

Luis Sanchez Rodriguez · Answer

Hey Brenden

Got a few questions...

1. What is the asking price of the Condo?2. Are you doing a Fix & Flip, Buy & Hold, or living for yourself?3. If the purposes to use this Condo as an investment property, what's the expected monthly income?

Brendan Francis · Answer

@Jarrod Kohl - really appreciate the suggestions. Thanks everyone. We really appreciate all the insight.

Just so all future commentors are aware, the property has been listed for over four months.

David Barnett · Answer

Does your agent have recent comps that support their suggested price?  In actuality, you can offer anything you'd like.  If this is a high producing agent, I would assume that they have a better sense than you would on where the deal would land and what might offend the seller.  If you're talking about an extra $15k or so, the commission for the agent is an extra $450, give or take.  My hunch is that you are overthinking this and trying to talk yourself out of this deal for some reason.

Brendan Francis · Answer

@Luis Sanchez Rodriguez We want to buy it and make it our residence for five years then sell it for a higher price or rent it, depending on what the market is like at that time. We are willing to make some improvements to it while we live there. Thank you.

Is our potential condo purchase a good deal?

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