Updated 3 months ago on . Most recent reply
Renewed Offer & Negotiating a Deal
Hello! About 2 weeks ago, my partner and I recently made an offer of $325k (an offer which was over $200k below asking) on a duplex near a University. We ran some comps in the area and came to the conclusion that the house was WAY over priced. My local realtor agreed. In fact, no other duplexes in the area have sold for anywhere aroud this asking price ($600k). After a few days, the offer was rejected with no counter. According to my realtor, the seller's agent is difficult to work with and does not have the best reputation in the community. The house has been on the market for over 80 days with no other offers.
I'd like to make another offer with the hopes that the sellers will reconsider. I did some research and found out that there are 3 owners, with one deceased. I was thinking about making a renewed offer at the end of the month. I do not expect the house to go into contract before then given its extremely inflated price. Do you suggest I increase my offer? My maximum allowable offer is $380k, but I was hoping to land around $350k. I've heard of situations were the buyer will offer the same or even less for the second offer given the lack of interest in the property. What are your thoughts on this? This property has amazing cash flow and already has tenants lined up for next year. I think buyers/investors are just spooked by the listing price.
Any and all advice is appreciated. Thanks in advance!
Most Popular Reply
@Victoria Spagnolo, since I am in your market I looked up the listing you are talking about. I am also a realtor, but NOT looking for your business (just to be clear).
Assuming I am looking at the correct listing. Yes, it is a side-by-side "duplex" or locally known as a "double block", BUT it has set up to have 14 bedrooms total!!! It is rented out as a student rental generating $5700 per month and is FULLY rented.
So, this place is valued NOT like a double block rented to long term tenants but more like a commercial property based on its income. So, the asking price is not nearly as off base as you seem to believe.
Here is another 14 bedroom student housing small multi-family that sold a year or so ago for $613k:
Comparable 14 Bedroom Small Multi-Family
Comparable sales is really not stictly the way to think about a place like this. They can and will sell for more AND the comp that I cited was FINANCED. So, it appraised for that value. Yes, it was broken up into 4 apartments rather than 2, BUT these places are NOT RENTED BY THE UNIT. They are "rooming houses" rented by the bedroom to students. So, they are essentially 14 unit places with 14 separate leases!