Seller unwilling to budge on price

10 Replies

Hello,

Need some help here. We are trying to purchase another rental and the seller needs some help. The home is in a great area but the house needs at least $40k in repairs. I wrote a letter that walked through the repairs
to help show the seller she is asking too much. Thus far we have put in 3 offers as we do suspect her RE agent may be dragging their feet. According to her RE agent they get multiple offers per week around the same price range we are offering. So we went $7k above, and she still turned it down.

What is the best approach to get the seller to realize what the house is worth?

Any suggestions?

Matt

WHY is the seller selling?? Sounds like an unmotivated seller to me. You make money on a property when you buy. You could simply give them your card and say if the seller changes their minds let you know although you might have purchased other properties by then.

Either the seller is unmotivated or they are trying to play buyers off each other for a higher price. Either way it could be a bad investment for you. It just depends on what the buy price is relative to market value and how long it would take you to find an identical property like that.

No legal advice given. 

While this can be an annoying situation, it's just a house.  It's just a deal.  It's not personal.  You can roll your eyes at the seller's attitude, but that's about it.  I'm in a similar position and I just made sure that everybody involved knows that my offer is good for several months.  Later this summer, when they realize they are unable to move their house at the price they want, they can ask me if the offer is still valid and the answer will most likely be Yes.  I haven't been arrogant, I haven't been argumentative.  I've listened to their opinion on the worth, nodded and said that I understand their point, but my price is firm.  I've been friendly and open and I hope they remember that when they realize that they have to come down quite a bit in order to sell their property.

The issue is that they are 

A)  using zillow and trulia to value their house, not an agent or an appraisal.

B) using comps that have been remodeled VERY nicely.  Their house has been neglected for at least 10 years.

C) they have a target of the amount of money they want to take home at closing.  It's what they "need", not based on actual house value.

Your seller isn't motivated enough yet.  Mine isn't either.  Be patient.  And if somebody does come in much higher and is able to make a deal work, that's fine.  You should already be moving on to the next deal.  Don't put all your eggs in this basket.  You know what the house is worth to you and what it will take to make a deal work.  When you start raising your price on the buy, it means you'll be wanting to cut corners on the rehab or you'll be equally unrealistic on the sale side later.

Hang in there.

Sounds to me like the buyer is the one that needs to realize what the house is worth.  Remember, it's the sellers house...not yours.  This is called ..."move on to the next deal".  A deal is made when both buyer and seller agree to what the house is worth.  When they don't agree, they're still both right...but there's no deal.

Move on.

@Matthew Drew

It's probably a good time to put them on your follow up list and check back down the line. The fastest way to get a bad deal is to be a motivated buyer. When the seller gets tired of not selling and continuing to make mortgage payments, pay taxes, insurance, maintenance, etc., then maybe they'll be a little more motivated to deal. 

As a side note, this is a good reason to always ask why the seller wants to sell. When you find out the motivation behind the sale and make your offer less about price and more about solving a problem, then it's much likely you'll get around the price issue. This won't always work, but it certainly helps. 

Try to dig into the "why" behind the sale and then incorporate that into your offers. Instead of the offer being just about exchanging a certain number of dollars for a house, it becomes a solution for a problem and makes it much more powerful.

pretty much what everyone else is saying.

 ask them why they think their house is worth whatever they are asking

explain to them all the payments that need to be made.

follow up with them monthly to see if their motivation has changed and tell them to always keep you in mind

Originally posted by @Joe Villeneuve :

Sounds to me like the buyer is the one that needs to realize what the house is worth.  Remember, it's the sellers house...not yours.  This is called ..."move on to the next deal".  A deal is made when both buyer and seller agree to what the house is worth.  When they don't agree, they're still both right...but there's no deal.

Move on.

Maybe.  Maybe not.  If there are no buyers at one price and no sellers at the other, then both parties may be off on what the value is.  Or you could argue that neither party is motivated.  However, comps that support one range and not the other would be a decent indication of approximate value, no?

Originally posted by @Linda Weygant :
Originally posted by @Joe Villeneuve:

Sounds to me like the buyer is the one that needs to realize what the house is worth.  Remember, it's the sellers house...not yours.  This is called ..."move on to the next deal".  A deal is made when both buyer and seller agree to what the house is worth.  When they don't agree, they're still both right...but there's no deal.

Move on.

Maybe.  Maybe not.  If there are no buyers at one price and no sellers at the other, then both parties may be off on what the value is.  Or you could argue that neither party is motivated.  However, comps that support one range and not the other would be a decent indication of approximate value, no?

 No.  Joe is exactly right.  Value is the price that the buyer and seller agree on, and the seller's agreement matters just as much as the buyer's.

When you start to try to force deals, you end up giving in because making the deal becomes more important than the $$$profit/cash flow$$$.  Looks like that mistake was already made when the offer was increased by $7k.  IF the original number offered was what the buyer "needed", any increase in that number only increases the likelihood of losing money...unless the buyer wasn't confident in the original numbers.  If that was the case, then why bother with analysis.

Sometimes the best deal you make is the one your don't.

Originally posted by @Joe Villeneuve :

When you start to try to force deals, you end up giving in because making the deal becomes more important than the $$$profit/cash flow$$$.  Looks like that mistake was already made when the offer was increased by $7k.  IF the original number offered was what the buyer "needed", any increase in that number only increases the likelihood of losing money...unless the buyer wasn't confident in the original numbers.  If that was the case, then why bother with analysis.

Sometimes the best deal you make is the one your don't.

 ^ what this guy says! Walk away.

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