i received a call from a seller who i spoke with about 5 months ago. she’s looking to sell her home and move elsehwere. i tried to get an idea of what price she’s looking for and she replied “well why don’t you come look at the house, decide what its worth and we’ll discuss it from there”.
i’m trying to run some comps in the area before i visit the house. i want to prevent saying the wrong things that will hurt my negotiating position.
anybody have any recommendations of things i could ask? things i should not ask…things i should say and not say? i’ve read many times that “he who mentions price first, loses”.
just thought i’d get some feedback so i can get my mind on the right track.
first you have to have the right expectation about chasing such a deal.
from my expereince, most FSBO sellers who claim to be motiavted, are not. they are just too lazy and/or cheap to hire a realtor and think their homes is a palace when it fact it needs thousands of dollars in upgrades. also, they are usually asking retail or many time OVER retail pricing. I would be very surprised if your Seller does not already have a number in mind.
next is what is your strategy with this property, rent? flip? also do have cash to close, got fianancing lined up?
this is all plays into the negotiations.
what you need to know prior to going there is what the market is like for that type of house, neighborhood ,etc. and estimated range of what it would sell for on the open market.
i can see your point about them NOT being that motivated. she did say she didn’t “have” to sell the home. thats ok i dont “have to have” the home either ;]
the fact she called me months later and has neglected the property tells me there’s room for a deal here. my initial approach is to get a bargain deal for a familyl member (at no benefit for myself). i’m ok with this, family is family.
if the family member is not interested, i’m open to purchasing this for a price that works for me. i already asked if she was open to other types of creative purchasing (such as a Lease Option), she replied no because she wanted no ties. Perhaps I will revisit this once again if my offer is too low for her. at first glance i think this would be a wholesale deal.
not to steer of topic but this reminds me of a post i made to my REIA group…i asked for those who are investing in FSBO’s…how are these actual deals? to me there isn’t enough equity for reasons you described above…guess we’ll see on this one.
hope my replies give you a better insite to my situation.
Negotiating 101 says that the first one to name a price loses. If the buyer names a price he in effect has set the floor, if the seller names a price he has set the ceiling. But I would get comps, figure out what my costs and make ready are. I would add all that up and see if I can make money at that point based on the neighborhood rents etc. I would make my offer based on that. If they don’t like it I can’t help that. I would love to make them happy but that is an issue with their camp. My camp is happy if we make a profit. I can’t overpay because my profit comes from getting the property at a discount.
first, you need to get your ducks in a row. The whole “i’ll get this deal lined up for a family but if they don’t take then I’ll think about it” thing is flaky. Your Seller will figure out this lack of commitment soon enough. You have to have a plan otherwise you are wasting your time.
I am skeptical that this seller is serious about selling.
There is nothing wrong with setting the floor price.; sure it better and more customary for the Seller to first number of the table, but don’t be a Nervous Nelly afraid to get things going. The bottomline is you need to know you market and knwo what works for you and what doesn’t. Also, negotiating is NOT all about price; its just one level. Part of the back and forth process is figure out what is driving the other party…do they want a fast closing, a delayed closing, etc, etc.
Also, don’t feel like you have to “do the deal” in one day. If it was me, I’d spent 20 mins to pull some comps and figure a ballpark price and then go look at place, throw a low-ball figure for the seller to chew on (if they refuse to give a price) and if counter back at some really higher number, then just tell them “I’ll have to think about it and get back to you”.
Based on what you said, I give it a one in five chance of working out. Get your numbers together, your plan in place and go look at the property.
first, you need to get your ducks in a row. The whole "i'll get this deal lined up for a family but if they don't take then I'll think about it" thing is flaky
I’ll clarify this. I’m going to check out the house with my uncle. He has been looking for a home for his umm we’ll call him a step son, for quite some time. He will get first shot at the house. If he says, “yes this will do, I’d like to make an offer”, so be it. If he says, “this house is just too small or doesn’t fit what I’m looking for”, then I’m going to submit an offer which will allow me to make X profit. If she bites, she bites…if not, no worries. Perhaps it will be more appealing to her in the future when she tries to sell herself or whatever it may be. I’m taking myself out of the equation as a courtesy for him. Make sense?
As far as the comps, I’m obtaining those as we speak. I didn’t plan on going to look without this info ;].
I was thinking about looking at the home…taking note of everythign and telling her I’d get back to her. That was the purpose of this post…should I then just call her with the amount and negotiate over the phone…or submit the offer in writing so the amount is staring her in the face? I thought the later might be more effective…but who knows ;]
As far as a 1 in 5 chance. I’m going to agree with yah on this one. But to invest a small amount of my time, make an offer, and obtain some experience…I’ll give it a shot.