How much do you pay? - Posted by Joe Kaiser
Posted by Joe Kaiser on April 25, 2006 at 18:33:44:
“How much would you pay to the owner,” is the wrong way to
think about this, as is how much the property is worth and what is
owed and all that other stuff.
None of that matters. None.
I know everyone thinks it does, but what a house is worth and how
much it costs to fix it and what the equity may or may not be has
ABSOLUTELY NO BEARING ON WHAT THE OWNER WILL TAKE.
They are two completely unrelated constructs that should never be
confused or tied together.
You don’t need to know ANYTHING about the value or fix up work or
equity in order to make a deal with the owner. In fact, I prefer not
knowing 'cause all that does is confuse and get in the way of the one
thing I’m there to do . . . make a deal.
The question, really, isn’t “what would you pay?” The question is
"what’s the very best deal I can make?"
And then you go make that deal.
I’d start with, “what does the owner want?” And I’d negotiate hard from
there, testing for, exactly, the absolute best deal he’ll make me
. . . and write it up from there.
Once it’s written up, we can then figure out whether or not it’s a good
enough deal based on the numbers that matter (but I’ll let a new buyer
do all that work. I have zero interest in kicking more bricks).
Forget confusing what something is worth with what someone will
take. Make sure there’s a total disconnect there so you don’t somehow
mix up the two.
Not now, not ever.