BP has many great blog posts, BUT ....

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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
12y
Originally posted by @Brandon Turner:

Hey @Walt Payne - I'd love to hear more of your thoughts. I think the point of the article is more of a "when negotiating, include everything" and I don't think the intent is to take advantage or be dishonest. I mean, when I'm negotiating for a deal, I'm obviously going to mention everything I find wrong with the property to get the best deal.  But I think this is an interesting topic for discussion - so what, in particular, would you disagree with? I'm sure this discussion will help others as well! 

 Brandon,

I have to disagree with you on this. The blog poster admits that he enters into the contract knowing his intention is to strong arm the seller once the seller can no longer field other offers.

I don't believe that the blog post should be removed but the O.P. definitely operates in a gray area & @Walt Payne brings up some valid ethical points.

I don't know if there really is a right or wrong answer to this debate.

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  • Ryan Dossey
    Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
    12y

    So he was talking about getting seller financing? I don't really agree with using the list of repairs as something they have to tell the next guy especially when you are inflating it. I understand getting a thorough bid so you know what to expect. But I think I see why it bothered you. 

    0Reply
  • Brandon TurnerPro Member
    Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
    12y

    Hey @Walt Payne - I'd love to hear more of your thoughts. I think the point of the article is more of a "when negotiating, include everything" and I don't think the intent is to take advantage or be dishonest. I mean, when I'm negotiating for a deal, I'm obviously going to mention everything I find wrong with the property to get the best deal.  But I think this is an interesting topic for discussion - so what, in particular, would you disagree with? I'm sure this discussion will help others as well! 

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    2Reply
  • Ryan Dossey
    Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
    12y

    @Brandon Turner I really appreciate how active you guys are on here and willing to answer questions. 

    1Reply
  • Walt Payne
    OP
    Real Estate Investor · Sebastian, FL · Member since 2014 · 812 posts · 432 votes
    12y

    @Ryan Dossey  Yes, known defects need to be disclosed, at least in the states I've ever bought RE. And it would be hard to deny knowing something that was on an inspection report.

    0Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y

    Is that the part you you object to Walt?

    2Reply
  • Walt Payne
    OP
    Real Estate Investor · Sebastian, FL · Member since 2014 · 812 posts · 432 votes
    12y

    @Brandon Turner  

    Have your contractor bid every single thing in the house that needs — or could need — fixing.

    Paragraph heading from the blog. This is just one angle that I find sleazy. If it is bad, and obvious, you should know before putting in an offer. If the heater is old, you should know before putting in an offer. Roofing damage is often visible from the ground. Water damage is often visible. etc, etc.

    "The key here is to not just rely on your inspector. Hire a contractor to get to the property and give in depth bids on all the items." 

    The time to bring up problems, and negotiate, is not after tying up the property and putting the seller in a no-win position. That is not negotiation, that is coercion. The only things that you should be bringing up in negotiations upon getting an inspection report is the hidden problem and the ones that a specialist is required to inspect.

    You should also know the cost of repairs prior to making the offer. Repairs are not something to be used as a blackmail tactic, they should be a discussion point in negotiations prior to a contract.

    4Reply
  • Walt Payne
    OP
    Real Estate Investor · Sebastian, FL · Member since 2014 · 812 posts · 432 votes
    12y

    @Account Closed  That is one of many points, but yes, that is the part that I object to the most. Especially when most "negotiating points" that are involved should be obvious to an experienced investor.

    0Reply
  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    12y

    @Walt Payne  Joshua nor anyone else can be the ethics police, and unless there's something blatantly offensive, or graphic in the posts, people are free to write as they choose. However; the feedback that the blogger gets will probably in and of itself make him reconsider his tactics. Sometimes newbies just need to learn hard lessons! 

    2Reply
  • Walt Payne
    OP
    Real Estate Investor · Sebastian, FL · Member since 2014 · 812 posts · 432 votes
    12y

    @Karen Margrave  I agree to an extent, except this is not a user blog, it is an official BP blog post. To me, that is a different thing altogether.

    3Reply
  • Tony Gunter
    Investor · Canton, GA · Member since 2014 · 728 posts · 500 votes
    12y

    Maybe I am off base here, but every home I have ever bought, or sold, (relocation purchase/sale) this was always the way it was done. Price was negotiated and locked in to set a back stop on the price and then the house was ripped to shreds with the help of home inspectors and contractors to get the price down even more through repair concessions. I figured this game out early, so I would hold tight on the contract price as a seller because I knew there would at least be an attempt to shred it later on. I have had it done to me as a seller, and I have done it to others as a buyer.

    Am I missing something here, or am I suffering from newbie naivete?

    0Reply
  • Account Closed
    Investor · San Francisco, CA · Member since 2014 · 577 posts · 203 votes
    12y

    @Walt Payne 

    Blog posts do not equal truth.  They are opinions.  I would evaluation them as such.  Hearing it on the news or reading it online, does not make it true.  I would suggest being critical of all blog posts (and all information given to you for that matter) and decided for yourself if you think it's good advice.

    3Reply
  • Account Closed
    Investor · San Francisco, CA · Member since 2014 · 577 posts · 203 votes
    12y

    @Walt Payne 

    Though I believe there should be a preliminary level of experience/qualifications screen, I don't think @Brandon Turner  wants to get into the business of evaluating blog posts to verify every element of a post. 

    0Reply
  • Walt Payne
    OP
    Real Estate Investor · Sebastian, FL · Member since 2014 · 812 posts · 432 votes
    12y
    Originally posted by @Tony Gunter:

    Maybe I am off base here, but every home I have ever bought, or sold, (relocation purchase/sale) this was always the way it was done. Price was negotiated and locked in to set a back stop on the price and then the house was ripped to shreds with the help of home inspectors and contractors to get the price down even more through repair concessions. I figured this game out early, so I would hold tight on the contract price as a seller because I knew there would at least be an attempt to shred it later on. I have had it done to me as a seller, and I have done it to others as a buyer.

    Am I missing something here, or am I suffering from newbie naivete?

    I have bought and sold 4 personal properties, and a few investment properties and also worked for a rehabber where I was frequently involved in purchases. I have never played that game on either end of a deal. Negotiate the hidden items that couldn't be seen, the rest were known when the offer was made and are not negotiable after the contract was signed. I had one buyer try it, on disclosed items nonetheless.  So I explained my reasoning and when I didn't budge on the disclosed items he backed down. 

    0Reply
  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    12y

    I think everyone should look at properties, if there's work to be done, make your offer with a contingency for inspections, and then negotiate any "legitimate" repairs. However; I don't think you should make what amounts to a false offer, knowing full well you have no intention of paying that price, and then put pressure on a seller to take less based on a bids that don't seem to be legitimate. 

    Being honest and upfront seems a better business model to me. What goes around comes around. 

    8Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
    12y
    Originally posted by @Brandon Turner:

    Hey @Walt Payne - I'd love to hear more of your thoughts. I think the point of the article is more of a "when negotiating, include everything" and I don't think the intent is to take advantage or be dishonest. I mean, when I'm negotiating for a deal, I'm obviously going to mention everything I find wrong with the property to get the best deal.  But I think this is an interesting topic for discussion - so what, in particular, would you disagree with? I'm sure this discussion will help others as well! 

     Brandon,

    I have to disagree with you on this. The blog poster admits that he enters into the contract knowing his intention is to strong arm the seller once the seller can no longer field other offers.

    I don't believe that the blog post should be removed but the O.P. definitely operates in a gray area & @Walt Payne brings up some valid ethical points.

    I don't know if there really is a right or wrong answer to this debate.

    10Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    12y

    @Walt Payne  as a seller  I  take the position you do. I don't negotiate on things you should have known and were disclosed.  Other people though when buying take a very aggressive approach, they want everything discounted. Your option as a seller is tell them to walk.  I think having your contractor bid every single thing as a strategy strikes me as misleading. It is a technique sure but telling someone you will pay 75,000 when you know you already want 10,000 off in know repairs well.... its untruthful,  that being said it is a technique some people use.  It is good that you kick it out there for discussion on the ethics front. Worth some thoughts and I would like to continue hear people comment on it. 

    @Account Closed 

      I agree it is an opinion and I don't give bigger pockets blogs any higher value then another investor blog. (although I would not expect outright misinformation from the BP blog,  whereas  investor blogs I weigh on the writers experiences)

    What amazes me in this whole process selling process is when you negotiate as recommended by the blogger you still pay  commission on the sale  based on that first price that is agreed.   A disconnect there I think

    0Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y
    Originally posted by @Walt Payne:
    Originally posted by @Tony Gunter:

    Maybe I am off base here, but every home I have ever bought, or sold, (relocation purchase/sale) this was always the way it was done. Price was negotiated and locked in to set a back stop on the price and then the house was ripped to shreds with the help of home inspectors and contractors to get the price down even more through repair concessions. I figured this game out early, so I would hold tight on the contract price as a seller because I knew there would at least be an attempt to shred it later on. I have had it done to me as a seller, and I have done it to others as a buyer.

    Am I missing something here, or am I suffering from newbie naivete?

    I have bought and sold 4 personal properties, and a few investment properties and also worked for a rehabber where I was frequently involved in purchases. I have never played that game on either end of a deal. Negotiate the hidden items that couldn't be seen, the rest were known when the offer was made and are not negotiable after the contract was signed. I had one buyer try it, on disclosed items nonetheless.  So I explained my reasoning and when I didn't budge on the disclosed items he backed down. 

    That game is definitely out there.  I've had more than a few investor buyers do it to me.  They really believe, as the blogger posted, that the seller will continue to only work with the contracted offer. It's definitely a strategy. I refuse to negotiate on most repair items.  I priced it right.  They rarely bring anything to my attention that wasn't disclosed.  I walk from those  contracts and the agents (including mine) are always surprised.  In all but one case that I can think of, after I cancelled the buyers came back (to their senses) and bought the property at the contracted price and stopped asking for repairs or discounts.  To me that proves that they wanted it at the contract price and were working me. 

    3Reply
  • Craig Shute
    Landlord · Syracuse, NY · Member since 2011 · 120 posts · 96 votes
    12y
    I don't think I would be as aggressive as the blogger but this is definitely not coercion. If the seller doesn't like all the discounts requested he's more than welcome to walk.
    0Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y
    Originally posted by @James Wise:
    Originally posted by @Brandon Turner:

    Hey @Walt Payne - I'd love to hear more of your thoughts. I think the point of the article is more of a "when negotiating, include everything" and I don't think the intent is to take advantage or be dishonest. I mean, when I'm negotiating for a deal, I'm obviously going to mention everything I find wrong with the property to get the best deal.  But I think this is an interesting topic for discussion - so what, in particular, would you disagree with? I'm sure this discussion will help others as well! 

     Brandon,

    I have to disagree with you on this. The blog poster admits that he enters into the contract knowing his intention is to strong arm the seller once the seller can no longer field other offers.

    I don't believe that the blog post should be removed but the O.P. definitely operates in a gray area & @Walt Payne brings up some valid ethical points.

    I don't know if there really is a right or wrong answer to this debate.

    But why do sellers (and sometimes even their listing agent) believe that they have to play this game? If someone doesn't want to perform on the existing contract terms, you can cancel. You counter with no discount, no repairs or whatever and then you cancel.  My agent thinks I'm very "unyielding" and is always surprised that I'm willing to cancel.  The time for getting a different deal was when submitting the offer.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    12y

    @Account Closed 

      I think the issue here is as James stated you bring these tactics into play after your in contract.. and knowing or premeditated that your going to just bring up everything you can.

    And if you have a FSBO they can be intimidated by the sharp talker and get taken advantage of.. Those in the industry like your self are not the easy targets this blog is talking about. He probably is talking about banks and the unrepresented FSBO.

    I had a aircraft mechanic that would do the exact same thing to me at Annual he would run up this big 30k bill then we would argue over what was mandatory and what was preventive and so on and so forth after the second annual I took the airplane to another shop.  So like you who just say no go somewhere else that is the poragative of the seller for sure.

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  • Rocky V.
    Rental Property Investor · Arlington, TX · Member since 2012 · 788 posts · 640 votes
    12y

    @Walt Payne 

    Definitely agree with you.  I really dislike that fact that most so called investors do this to homeowners.  When I draw up a contract to purchase there are no contingencies, partner walk thrus, inspections or other BS to allow me an easy exit.   Granted I do not write up 100s of contracts per week but nearly 90% of the contracts I write up get executed.  I think if you are not prepared to buy the home why waste everyone's time and kick the homeowner while they are down.

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    12y

    @Account Closed 

      I agree with your assessment of the BP Blogs and would add the Pod Cast are the same type of thing.. they are done by folks that by and large have experience and something to share but they are just opinions and experience's of people in the business, and or some are by folks with little experience really but a lot of desire !!

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    12y

    I didn't bother to read the blog, but I get the gist, and have seen the routine. Yeah, it's a little scummy and tries to take advantage of a seller, but it needs to be a desperate, uninformed, or unrepresented seller. Like K. Marie, I've had buyers try this, gave them the Fu__ Off, send the cancelation notice response. It tends to wake them up when you change the MLS status back to Active with the note "existing contract expected to be canceled on xx/xx/xxxx", bring all offers now". I do know guys who practice this, and are proud of it, telling you "now that I have the property under contract, I'm going to take the owner on a roller coaster ride". I guess it works sometimes.

    1Reply
  • Tony Gunter
    Investor · Canton, GA · Member since 2014 · 728 posts · 500 votes
    12y
    Good discussion. I must say I was on the receiving end of this the first time I was exposed to this. The real kicker was that the realtor was the one pushing this with the buyer, and he was working this deal as a dual agency. It was a small town. Definitely jaded my opinion of realtors. I should say to that was the first time I ever sold a house. I have learned a lot since then. BP is a great way to put the learning curve on steroids. Great site.
    0Reply
  • Karin Crompton
    Rehabber · Niantic, CT · Member since 2012 · 443 posts · 150 votes
    12y

    It's a straight-up scummy tactic, no gray area at all. I'd go so far as to say it's borderline illegal - ever hear of a bait and switch? - though I imagine you'd have a heckuva time proving intent. The intent is clear in that blog, however ... he makes a false offer to a homeowner (baits them) and then pretends to discover problems later in order to "negotiate" (the switch). This offends my sensibilities and sullies the reputation of all investors.

    Even if he's "only" doing it to a corporation, i.e. a bank, it's an ugly tactic. If he's doing it to a desperate homeowner, shame on him. I can't express enough disgust. Discovering a real, previously unknown issue is one thing (I will do well and septic tests and rarely anything more). Deceit is another.

    Having said that, I agree with other posters that Brandon & Co. would be hard-pressed to start yanking all blogs that offend or to play Ethics Police, which is quite subjective. However, if a BP blogger consistently crosses the line, they might want to step in. After all, the blog has BP's company name on it and many readers will assume the blogger's point of view and the advice he/she hands out is endorsed by BP.

    3Reply
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