What tactics or negotiating strategies have you successfully used to get a seller to bring down their sale price expectation? We are exploring a current apartment opportunity but seem to have a 10-15% price difference that's holding back the deal.
@Danny Randazzo most sellers have high expectations these days, and a lot of them don't "have to sell".
they put the properties out there, on the market, just to see if they would get what they want... if it doesn't sell they don't care.
In saying that, If you can provide them with comparable sales that indicate lower values that would help....
Another way would be to have a someone else putting in a lower offer than what you intend to pay, then your offer would look better. - But that's "not ethical", especially if there is broker involved.
The other 2 option, provided there is a strategic reason to over pay would be to have the seller carry back that part of the loan for favorable terms to you as a buyer.
Time is the best solution of this, it is better to walk away from a deal than over pay IMHO.
To me the only thing that will temper unrealistic expectations is buyers unwilling to pay unrealistic prices.
10-15% more would be OK. I am finding more like 30%; but maybe I am being unrealistic? ;<)
@Danny Randazzo Hello Danny. Inspection report
Unrealistic sellers are almost a cliche. Time is the only thing that brings them in line. If they keep hearing the same thing about the price and they need to sell eventually they will adjust the price. The key is to be in front of them when they do. Follow up is everything.
What are the comps? Is the seller's price high or is your offer low?
Hi @Danny Randazzo ,
This is on a much smaller-scale than what ya'll do at Passive, but on a deal I was able to build a relationship with the seller throughout the course of negotiations. Built rapport based on similar interests, hobbies, and careers. Not sure what state your seller is in (i.e. retirement, young and acquiring, etc.), but I was able to leverage mine into feeling like he was helping me out since he was nearing retirement and I'm just starting out, and he came down to my price. Maybe on your larger-scale acquisitions you can translate that to the seller feeling like he or she is helping out your investors. A bit cliche what I'm throwing out, but it worked on a smaller scale. Best of luck!
good suggestions @Hadar Orkibi what tactic have you used to close a deal recently?
@Greg Dickerson I agree with you that time is a great way to let a seller understand the value of their asset and if they want to sell they will come around to a lower valuation
@Brian Metz excellent point on building a rapport. I think no matter the deal size having a relationship with the seller or broker is a good way to figure out terms that make it a win for everyone.
@Danny Randazzo i done most of the things suggested.... apart from the unethical one.
Most recent was to provide Comps together with Fast closing.
What I do regular is follow up, this is a key factor... i have sellers that I'm following up with for over a year now.
More often then not there is change in circumstances, over time the seller become conditioned to the lower price and lower their expectations.