January 31, 2020 at 4:15 am #24677JeremyParticipantJanuary 31, 2020 at 4:15 amPost count: 5
In a recent WYDTD, Steve and Jill mentioned they would like the deal better if the offer price to buy the land was lower than the mailer offer price. Wondering what type of strategy or language anyone can share about how to go back to the land owner and try to negotiate/offer a lower price for the land? Any suggestions are greatly appreciated!
Daniel F. HarbParticipantJanuary 31, 2020 at 5:01 amPost count: 14
A quick synopsis: A 4 month member, 21 properties purchased, 5 properties sold, getting super comfortable talking with sellers and buyers.
Not an expert by any stretch, I’ll leave that to the Steven & Jill’s, the Kevin F’s, and the Joe Martin’s. Here’s my experience:
I could speak volumes of what I have learned, I’ll stick to your question:
I LOVE the offer price I give if it is lower than the “Mailer” offer price!
(With me, it is case by case) A lady contacted me about my offer of 3K for 30.25 AC she owned. She wanted more. I respectfully declined but said “Keep touch, let me know.”
Over the next two months she kept touch and we would talk, very nice lady, and mentioned she is running everything through her sister, an RE Agent. (That’s the problem!!) I used to sell California Residential RE, and completely true, they are like “Getting a Root Canal done!” Ugh!
The nice seller said her sister wants this changed in the contract, that added, and this switched around. I politely said “No, No, and No….Thank you…. My attorneys have created my legally binding contract and not one letter will be changed.
This is getting too long…..sorry. Well, throughout the next few weeks we kept touch…then it stopped for 3 weeks. Then to my shock, she sent in the signed Purchase Agreement. I sent her a very professional and respectful email stating my company is done investing in your County, my team does not want your property….best wishes….. BUT, I personally really love your 30.25 acres, I will buy it for my personal portfolio…
My thoughts were twofold: I wanted the upper hand, and I made sure I controlled the “conversation”, not her….but respectfully. 😎
After I sent that email, and I included in the verbiage “ I respectfully understand your decision, I accept if you decline, I understand” to soften the 2K offer.
I fully expected “No way, 30+ acres for 2 Grand?”…..you’re nuts!!! Maybe.
To my shock, she emailed back with a resounding “Yes, sounds good!” The Deed was sent out, signed and notarized, and it’s on its way right now to be recorded in my companys name.
Now that is SWEET and it should be a cool
minimum 10K profit. Patience is key, control of the conversation and confidence are also imperative.
So, a long story to your question, but hope it shed some light on an offer lower than the mailer price.
Gotta Love It!!!!
Best of profits, Jeremy!
Daniel F. Harb, ARRT, RT(R)Kevin FarrellModeratorJanuary 31, 2020 at 8:34 amPost count: 1532
Jeremy – I have done this often. The seller accepts my offer but after some homework I don’t feel good about the profit margin. Lesson #1 – listen to you gut feel.
Then I decide at what price will I feel good about this deal. Usually that is about 50% of the offer in my letter. So I call or email and explain that I will need to modify my offer for various reasons (terrain, access, flood zone, local real estate market, etc). The lower offer is accepted in about half of these cases.
In your conversation it is best to have a reason and to say or write ” I have to revise my offer because – fill in the blank reason.” The use of the word because is important.
I have turned some deals that were “I don’t want it at that price” to deals that were very profitable and quick to sell by doing this. You must be prepared to walk away when making this offer – as Daniel described above.
Kevin Farrell - Moderator
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Schedule a 30 minute call - https://calendly.com/kevin-629BryanParticipantJanuary 31, 2020 at 10:46 amPost count: 2
Jeremy, here is a situation that happened with me.
I had made an offer on a property for around $2500. The owner was trying to get more than that and from my research the $2500 that I had offered wasn’t leaving enough margin for my comfort so I certainly could not go above that. Not to mention there was trash on the property. So I respectfully and kindly told the gentlemen that I really wish I could pay him $2500 for it but there was just no way I could swing that. I also told him about the trash on it. It must have been a month or two and he reached back out to me asking if I had changed my mind. I told him unfortunately no I still couldn’t do it. He went silent for another month or so then reached back out again. I told him that honestly the best I could do was $500. He accepted. I hired someone to clean up the trash for $100. I sold it for $4500 a month later. (Didn’t expect to get that much but I did). Not all deals will happen like this but they are definitely out there!
I think my ‘not needing it’ helped with getting such a low price for it. And my patience, like Daniel explained with his example.
-BKevin FarrellModeratorJanuary 31, 2020 at 11:38 amPost count: 1532
I love lots with trash on them. If it looks like cars I can negotiate a much lower price. Then I call the local scrap yard and tell them they can have the steel for free if they take it all at once.
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Schedule a 30 minute call - https://calendly.com/kevin-629JeremyParticipantFebruary 1, 2020 at 6:45 amPost count: 5
Great insights and examples- thank you all for sharing. Off to determine my “because” now…JeremyParticipantFebruary 5, 2020 at 6:15 pmPost count: 5
Thanks for the guidance, was able to get the seller to reduce their price with the “because there is something wrong…” play.
I am now evaluating another property that looks amazing and I don’t have anything to fault, meaning there’s not anything to denote as a negative – however I would like to get the seller to come down in price. In a situation where the property is fantastic, but you over quote the purchase price, what are your suggestions on getting the seller to agree to a price reduction?
Grateful for any/all feedback. Thanks in advance.Kevin FarrellModeratorFebruary 5, 2020 at 6:57 pmPost count: 1532
Jeremy – Try this “I have already purchased all the properties that I needed in that county. I can still purchase yours if you can accept $X,XXX for it.” This sounds best if the seller waited until after the closing date on the letter.
If the property is nice why the lower price? Did you over price your offer to him?
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Schedule a 30 minute call - https://calendly.com/kevin-629JeremyParticipantFebruary 5, 2020 at 7:57 pmPost count: 5
Thanks Kevin – after walking through the previous offer and reduction and seeing how Steven and Jill reviewed it through the WYDTD on the last member call, I believe I did overprice this offer. Thank you for the insights around this strategy.Collins B. CaseParticipantFebruary 6, 2020 at 8:10 amPost count: 28
TOTALLY disagree with Daniel Harb. Intentionally lying to the seller? (saying this is for your personal portfolio)
Slimy car salesmen use this tactic. I like to think this is a group of respectable business owners and savvy negotiators… not a lying contest.
I say this with respect and hopefully have misinterpreted your intentions.Daniel F. HarbParticipantFebruary 6, 2020 at 8:38 amPost count: 14
Congratulations, Collins B. Case. You “TOTALLY” disagree with me. Good for you. Whether I keep it for my personal portfolio, or my business portfolio
(really one and the same), that is my business. Next time you buy a property, my friend, why don’t you tell the seller, “ By the way, Mr. Seller, I’m buying this property from you for $5,000.00, but in complete honesty to you, Mr. Seller, I am going to resell it for $10,000.00, alright, Sir?” And best to you on that, friend.
Yes, this is a group of respectable business owners and savvy negotiators.
Collins B. Case, that was not said with with respect and you have misinterpreted my intentions. So please let me know how that line goes with your sellers when you tell them you are going to resell their property for twice or more. Friend.
So, respectfully, I await your reply on what your sellers response will be.
Oh, and by the way, the totally gracious lady that I bought the property from? Totally overjoyed, happy, thankful, and relieved. Mission accomplished. I honestly didn’t want her property, that is why I kept pushing it off. She wanted it gone.
I obliged. Resolved.
It is true that within this program it is more the sellers “Circumstance” as opposed to the dollar amount.
Now THAT is beautiful negotiations.
Please let us know your sellers thoughts when you tell them about the resale price,
ok, Collins B Case?
No disrespect. Friend.
Best!Collins B. CaseParticipantFebruary 6, 2020 at 9:03 amPost count: 28
Wow. . . Daniel, don’t lose your cool. We can discuss topics with common sense… I simply prefer finding motivated sellers (not having to coax someone into anything based on mistruths).
Tell your Sellers whatever you’d like, but I still disagree with outright lying to them. When a Seller asks what my intentions are with the property, I always tell them — if they have the time they can list the property for way more $, but with me they get a fast, hassle-free cash closing, and I handle all the legwork!
Back to Jeremy’s question, I would go back to the buyer and tell them based on the area’s sold properties, you overpriced this parcel and present a “take it or leave it” number that works for you while highlighting how easy and awesome the selling experience will be for them!Daniel F. HarbParticipantFebruary 6, 2020 at 9:14 amPost count: 14
Wrong, Collins B. Case. I have never been more calm, cool, and relaxed. Friend.😁
One has to be calm with patients and in surgery.
My time is VERY expensive, and I must get to the hospital to go to work. My Land business is my fun business. And a very profitable one at that! 😎
So I’ll let you finish up this thread. Friend. (Use your time wisely, friend!)
😁😁😁Daniel F. HarbParticipantFebruary 6, 2020 at 9:36 amPost count: 14
Oh, BTW, Collins B. Case, I look forward to meeting you! I bet I could learn some awesome things from you. (And you from me, hopefully!)😁
I know, I am at work, but between patients! Seriously though, appreciate the input, we are all learning here whether 2 months in the business or 20 years.
So, best to you, best of profits, and I am sure you are a superlative businessperson.
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