Shortly after my wife and I bid on a house a few days ago, we learned that although the sellers had gone with a higher offer, they wished for us to consider becoming the official “back-up” offer. By doing so, if the first deal fell through, we would be next in line – the home wouldn’t go back on the market.
You: So why not agree to be the back-up offer?
Because they wouldn’t accept us as a back-up unless we raised our bid price.
You: Did you?
First I asked what their counter-offer was. I saw no harm in learning how far apart we were. I wasn’t committing to anything by doing so and figured, worst case, I’d still get data for future searches.
Their counter was still more than we wanted to spend.
You: But you could offer something in the middle right?
And we considered doing that. But after a lengthy conversation, my wife and I concluded we had made the right choice originally. We had bid what we considered to be full value when the house had the one unsigned offer on it, knowing there would likely be no back-and-forth negotiation for us.
We were able to avoid making an emotional decision (which was definitely not easy!) and instead adopted a “Think long, think wrong” philosophy. We stayed the course and decided not to raise our initial offer.
There’s much to consider when it comes to housing. One interesting post by Squawkfox, 6 Surefire Ways To Avoid a Mortgage Meltdown is featured in this week’s Carnival of Personal Finance. It certainly gives you plenty to think about as you enter the mortgage world. (Before too long, I’ll post my thoughts on the mortgage shopping experience, as I continue to develop the “Michael buys a house” series).
Also in the Carnival was my post Top Ten Ways to Save Money While Ruining Your Life, which was named “Best title of the week” by Bad Money Advice’s hysterical review of the carnival. (Anyone curious about social media should look at the picture he’s posted explaining it all).
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