insulting offer primes pump for someone else - Posted by Sally
Posted by Sally on February 21, 2002 at 09:36:28:
Last summer, I looked a property that I really wanted. It was a dorky piece of property (no curb appeal, weird layout of rooms, etc) but it would have been perfect for me to do my business out of and I really wanted it. It had a small rental house on the property with the main house, so it would have cash-flowed nicely for me to live and work in.
The owners were divorcing. She was covering about $1,400 a month in expenses on this place although she was already living elsewhere. She was motivated. He was living in there (“dug in” was more like it), and probably not coughing up cash every month so he wasn’t quite as motivated. That was the messy part.
I found out that because of their divorce situation going on, they had recently “bit” on one of those 2nd mortgage home equity loan deals that came to them on a postcard that offer to give you some terrific deal on a home equity loan. A dude came out to the property (owner said “with a clipboard looking all official” - now you guys know what little it takes to impress some people!) and did an “appraisal” for this 2nd. He was there about 15 minutes. He said the property was worth $410,000 so there would be no problem extending a $60k loan that would bring the indebtedness on the property up to $280,000. (they bought about 5 years earlier for about $180k- and interesting enough, the owner originally carried their loan)
Well… they had this $410k figure stuck in their heads. The realtor listed the property for about that, and would only go as low as $389. Waaaaay too high for this property that would also be a challenge to re-sell. Because of it’s layout, this house wouldn’t be suitable for older people or for those with young kids. (take my word for that - it had a limited list of potential buyers)
During this time, I even sprung to have Bill Bronchick give me some advice on this (thanks, Bill!) and it was pretty much what I had already determined… that the most I would consider going was $310k-which I considered about 10k on the generous side if we could work out terms. Even though I had nice conversations with the wife, they were insulted, appauled, upset, angry … you name it… at me for offering such a low offer. (Can you say “clear the way”?)
Their realtor even came in my retail shop (when I had a bunch of customers around me) threatening me that I better had not go near Mr and Mrs Jone’s place again! (my customers thought she was an attorney and I musta been some kind of stalker!)
So… after another few weeks of hoping they would come to their senses over price (especially with no pile of full price offers floating in for them), I just dropped the whole effort. A month or two later, I saw that someone new moved in and the realty signs were down.
Just yesterday, while searching the assessor’s records online, I took a peek at that property to see if it indeed sold to a different party and what the sales price was… and it did sell late last summer for $300k! That was 10k under my insulting offer!
I know I just blazed the trail for someone else on that house. I’m not upset, but I wish in hindsight I would have stayed in touch with that seller for another few weeks instead of throwing in the towel.
So how often do you guys get thrown out on your butts after making the “insulting” first offer and then later find out the sellers did indeed accept a similar offer from someone else after their anger at your “lowball offer” subsided?