Just before leaving work last Thursday for the long weekend I got a call from our realtor who said that we got an offer on our house. This was welcome news since our house had been on the market for about a month and a half with less than a dozen showings in that time.
For those of you unfamiliar with our situation, we have a purchase agreement in place to start building a house in a newer development here in Lethbridge. The purchase agreement is conditional on us selling our current home, which will cover the majority of our 25% downpayment on the new house. The new house is scheduled to be completed by August 1st, and we put our current home on the market on March 10th.
The Offer On Our House
Of the dozen or so showings that we had over the past 45 days, we probably received the least amount of feedback from our future buyer’s visit a few weeks ago. In fact, we forgot about this showing and turned our attention toward another couple that expressed interest and booked a follow-up visit.
So we were surprised to say the least when we got an offer from this particular buyer. I was also a bit surprised by the offer itself which came in at $237,000, or $10,900 less than our asking price. They also wanted a fairly quick possession date of May 20th.
After some conversations with my wife and our realtor we decided to make a counter-offer at $244,900 and agreed to the possession date if they could agree to the higher price.
Negotiation is about give and take, so if you ask for a concession from the buyer you should also be prepared to give up a concession yourself. The possession date was slightly irrelevant to us anyway, since it would be nearly impossible to match up the dates with the completion of our new house.
Our realtor called us later that night and told us that the buyer had only been pre-approved for $240,000 so that was as high as they could go. They also agreed to move their possession date back to May 31st. The offer is conditional on their financing being approved by the bank before the end of the month.
Honestly, I wasn’t expecting this at all. We had just received a really positive visit from a couple who wanted to book a 2nd showing but they would be away for the long weekend. We also had just booked a showing for a first time home buyer the next day.
Now it felt like we were under the gun. Do we accept the lower offer and potentially miss out on a higher offer down the road?
Our new house was dependent on us selling our current home, but we were still over 3 months away from the new house being ready and the real estate market typically picks up in the Spring.
We asked for a few days to think about the offer and to give us the opportunity to have a few more showings over the long weekend.
We are in the process of building our dream home. It’s all we’ve been talking about for over a year while we saved our money and determined how much home we could comfortably afford on a single income. That dream has one obstacle in its way, which is to sell our current home.
I know that we’re leaving some money on the table. It bugs me that we could be giving up thousands of dollars when I work so hard to continuously improve our finances and sweat over saving even a few extra dollars a month.
Ultimately this decision comes down to what price we are willing to accept for our home, and how much risk we are willing to take by standing firm and waiting for something better to come along. Market price is only determined by what a buyer is willing to pay for your house at a particular moment in time.
We accepted the offer last night. In the end, our peace of mind was worth far more than the potential of an extra few thousand dollars from an offer that may never come. Hopefully the buyer’s financing goes through later this week, and then we will have to find a short-term rental this summer until our new house is completed. And you can bet that I’ll be trying to find ways to save a few thousand dollars this summer while we’re renting 🙂
Did we make the right decision?