Inherited Duplex Listed at $460K—Comps at $350K. How to Negotiate?

[Bartosz Rosol]

My wife and I are currently house hacking on a street made up mostly of duplexes. We recently learned that a corner duplex on our street may be coming up for sale. The property was previously owned by the parents, who have since passed, and it’s now been inherited by their five children. They’ve reached out(off market) with an asking price of $460K, which is a premium for the building.

The most recent comp (2mo ago) on the street was $350K.

What’s the best way to respond to their message with the asking price, given this large gap? Looking for advice on how to approach the negotiation respectfully but firmly.

Building is (2) 2 bedroom 1 bath unit w garage parking in Philadelphia. Rents are 1400-1900 depending on quality. First floor needs some comestic work

[Joe Villeneuve]

City appraisal has nothing to do with value.  It's a number the city uses for property taxes.  The owners should have fought the appraisal.  Tax appraisals should be based on actual comps.  They go for the highest they think they can get, hoping the owners don't fight it.

If the sellers are using that appraisal, they need to be shown the comps when you make your offer.  Just list the comps you are using to justify your offer.  They either accept it, of they don't.  If they don't, they'll be waiting a long time to get what they want. 

When they reject your offer, and they probably will, don't change it.  You're correct, and they aren't.  Just politely say your offer is still in place if they change their mind...then wait them out.  

Never offer more than the what the sold comps dictate.  Never, ever.  I'm sure someone will come up with some ridiculous rationalization using the word "appreciation".  to justify making a bad offer.  Remember, you don't want the property, you want the deal.  Any offer over comps isn't a deal...no matter what the rationalization.

The most expensive word in the REI vocabulary is "rationalization".