Should I make a lower offer now that agents contract is up?

Question

25 acres. Listing price 310000$ Level to rolling. Mostly in pasture (20acres). Could easily be sub divided. In city limits and other comps are 12,500 per acre.

This property was listed with a realtor. I made offers and counteroffers and my last offer was 280000. their last concession was 300,000. This was all made back in may of this year.
.
Now that the agents contract is up the owners have contacted me wanting to know if im still interested. I know the current owners paid 264000 for the property and are needing to unload it. Back in may I was in love with this property but now I am looking at some other deals. I still really like and have several different strategies for this property.

My question here is what should I offer and what is the correct ettiquette in this type of situation? The owners want to know if my last offer(280000) is still good ? I don't believe they have had any serious offers besides me

Please advise

Lynn McGeein · Answer

Bill, Not sure, but I believe most listing agents have contracts with protection clauses where they have the right to commission if it sells to someone that made an offer or even showed it during their listing period for a number of months afterwards if it has not been relisted with another broker. It would be an issue for the sellers, I think, not you, but still could hang things up a bit if it exists. I haven't been a licensed agent in over a decade so that may have changed, but I doubt it or too many people would just find a buyer through the listing period, wait until the listing expired and sell it saving the commission.

J Scott · Answer

I almost always agree with Nathan, and I agree to some extent here as well...but let me add some additional thoughts towards the other side of things... I tend to believe that every offer is independent of every other offer (especially when the negotiations stop and restart later), and just because you offered one amount in the past doesn't necessarily mean you have to offer the same amount (or more) in the future. This works from both sides. The seller previously indicated that they'd take $300K, but what if they're getting lots of traffic through the property and now think they could get more than $300K (for whatever reason). I wouldn't fault them for saying, "Nope, we offered to sell for $300K before, but things have changed, and now we want $310K." Likewise on your side. Things change. Your cash position changes, your goals change, the market changes, the property changes (often depreciates over time), your motivations change, the time of year changes (making it easier or harder for you to resell/rent), etc. When you factor in all these things, it's not unreasonable to think that your maximum offer may have changed over time. Given that the sellers would complain if you were willing to pay more, they shouldn't complain that you're willing to pay less (though they will :), and the fact that you have some additional negotiating leverage isn't something you need to apologize for -- the seller's could have anticipated that situation and done something to avoid it earlier (like sell to you at $280K), but they were holding out for better. They could have gotten lucky and gotten better, but it turns out they got unlucky and now may have to settle for less. They took a risk, and it didn't work out. C'est la vie...

Nathan Emmert · Answer

Only you know the value of that land to you. Everyone has unique opportunity costs associated with any purchase. You need to look at what that land will cost you in terms of being able to, or conversely not being able to, complete other purchases. My personal opinion, unless there's a valid reason to lower your offer (i.e. the market has severely depreciated recently), I believe it would be poor form to lower your offer. Real estate is a relationship game. You're likely to have several interactions over the course of your career with key players. Don't treat every negotiation as a one time game where you try to maximize your benefit in that one event. Instead take a longer term approach and work towards win/win situations where everyone walks away happy.

Account Closed · Answer

I've seen a broker protection period of 4 months. That's quite punishing in this economy. Better have the seller check the listing contract so they don't get burned.

Bill Gulley · Answer

To the question, sounds to me like the owner is not aware that they will still owe a commission with you as the buyer. I have never heard of a listing agreement that did not have the "protection clause" and any broker/agent that is the procurring cause of a sale will be entitled to a commission even from an expired listing contract. So, if you made your offer during the listing period, the seller will likely be paying. As to your offer, if you are still willing to pay what you offered, then say yes, if you're not because of some other reason than the commission issue, just pass. But it sounds like they seller is trying to dump it if they called you and they may have another offer. In similar circumstances, I have said yes to old offers that were not taken the first time, that was what I was willing to do..... Good luck

Nick L. · Answer

What Lynn said. Most standard listing contracts give the broker a claim on their fee if the property is sold to someone introduced by the broker during the listing contract for up to a year after expiration. You should ask the seller to check their listing contract for this clause.