One of the very real frustrations as I sit with my Buyers or Sellers is the Client that “thinks” that by squeezing every last drop of blood from the other side is the way to win the deal. I usually do not work over a long period of time with this type of Client. While I certainly want to obtain the best property that fits the needs of the Investor, there are ways to go about it that can make the experience of investing both successful and a pleasurable experience.
Years ago, too many to count I sold single family homes. I learned something way back then. If a Buyer grinds the Seller for everything, the Seller will probably leave the property without cleaning it and will take very LAST garden hose simply on principle. It is the same for investment properties.
Many Buyers think that if they can”get” the deal for 10K lower that they are in a winning position. Hardly ever is this the case. Figure out the payments on an additional 10K and then decide if you want to go into an adversarial position with the Seller from the get go.
Here are some thoughts on this:
- What if you need a few days of an extension? If the Seller is already feeling taken advantage of, you may not get the extension and lose the deal and possibly your Earnest Money along with any appraisal and inspection fees that you have already paid
- Do you want the property repairs to be taken care of or a credit at close? Good luck with a Seller that again feels that you already “got the deal” Now instead of your down payment and loan, you now will be coming out of pocket for repairs.
- What about the competitive market? I am going into contract today on a listing. I have two of my own investors that I know really want the property. Last night I received two offers and the Seller is choosing one this AM. My investors have lost out on a good building simply trying to figure out numbers. I can assure you that not worrying over a 10K difference does not matter in the scheme of things.
- What about your reputation as a Buyer. Do not think that if you submit low ball offers or offers with conditions that are unreasonable that Brokers do not speak with each other.
STOP paying for “COACHES or REAL ESTATE GURUS” . What a COMPLETE waste of money! Use the money for down payments and get in the game correctly, I have investors or many I should say sometimes want to be investors that have to check with their coaches. By the time they have done this, the deal is gone.
Let speak about the Seller side of garnering the correct contract on your property.
Do you care if the Buyer wants something that you feel is unreasonable? Depends (the famous real estate answer) on what it is. A Seller should put themselves in the Buyers seat and see it from their perspective. If the Buyer can only qualify to a certain amount, beware of this on any counters. Understand that in multifamily, the Buyer typically does not go into the building until you have an accepted contract and escrow is opened. If you are presenting that the building is well taken care of, that should be the situation. If it is not, be prepared for a price reduction or a credit at close. If the Buyer needs you to cover closing costs be aware of this as well.
However, as a Seller remember that a bird in the hand is better than nothing. So if you get a reasonable offer, take it. The grass is not always greener on the next deal.
Like a Buyer who is a “low ball’ Buyer, you can gain the reputation of a Seller that is impossible to work with. If the Buyer needs a few days of a timeline extension for a good reason, give it to the Buyer. After closing if the Buyer needs questions answered-help them. What goes around comes around.
Also, you never know if this Buyer will come back today or even at some time in the future to buy another one of your properties or MAYBE you want to buy one of theirs?
It is a small world in the world of Real Estate Investing. So let’s go get the deal and have some success at the same time!
Remember that I answer my phone and feel free to call me! 602-688-9279.