An offer that went bad - Posted by Glen Singleton
Posted by Glen Singleton on May 05, 2000 at 11:57:09:
I recently contacted an out of state owner about a vacant property he owns in my city. He was extremely difficult to find, but I eventually tracked him down. He inherited the property many years ago, and as best I can tell it has been vacant and neglected for 10 - 15 years. We are experiencing a lot of development in the area now, and this has become a hot location.
When I contacted him initially, he was very non committal and would not name a sellin price. He did indicate interest in selling, and asked me to fax him my offer. Since I didn’t have access to the interior of the property (its boarded up) I made some assumptions based on the general condition and after getting some comps I made my offer contingent upon an inspection.
Here are the particulars: Duplex with a garage apartment, near downtown Houston. After reparired value $195,000. Land value alone $100,000. Estimated rehab costs $60,000. The are numerous liens filed by the city for mowing grass, clearing trash, etc. over the years, and there are delinquent taxes.
I offered him $67,500 cash. I thought this was a pretty fair offer. I can get the financing. I could either renovate the property as a duplex, or tear down and build a new townhouse which is the rage in this area now, or flip to a developer as they are very active in the area now with new development. Lots of posibilities.
The problem: After working up my offer, I faxed it to the owner using the standard real estate contract form used in Texas by all realtors. This is a Texas Real Estate Commission form, and its a good contract, fair to buyer and seller, and contains all the provisions of my offer, i.e. the inspection contingncy, etc.
After I faxed this, I called the gentleman back to discuss. His reaction was very perplexing. He told me he was insulted that I would send hime a “contract” when he just wanted a number. (He never gave any indication my offer was too low, or that he didn’t like the terms.) He said, I don’t think you even know what your doing and I don’t want to sell to YOU. I tried to explain my reasons for sending the contract forms rather than a one page fax with a number, but he would not listen. I aksed him if there were particular terms in the contract he objected to or if he didn’t like the price, etc. but he would not answer the questions, saying “I don’t have to talk to you.” All in all a very unpleasant phone call.
I later faxed a letter to him apologizing for any miscomunication on my part, and I tried to explain my reasons for sending the contract. I also explained that all of the terms were negotiable, and I still wanted to buy his property, etc.
I haven’t heard from him, and doubt I will.
My questions for all of you are:
(1) Did I screw this up (I guess so!) or is the gentlemen being irratinal ?
(2) What, if anything, should I do now to try and salvage the deal ? I think this is a good opportunity, and I’d like to get it.
(3) Have any of you had similiar experiences, and how did you handle them ?
I would appreciate any advice or insights you might have. I have done a couple of deals so far, and I love this business but I realize I have a lot to learn. Thanks !!