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jperiod

How to negotiate with investor - low offer? HELP

jperiod
17 years ago

On the market for 60 days, listed competitively at 474K, lowered to 449,900 2 weeks ago. Only about 13 showings and kinda slow the last couple weeks due to spring break.

Had an investor who lives down the street from me send me one of those vague investor letters about buying my house (wihtout a realtor). I told him I was listed and correspndence was dropped until yesterday. He said he picked up my flyer and still wanted to see/buy my house. He looked today and send an offer of 400K to my realtor. We are 90% sure he needs to do a 1031 (or whatever that is) exchange in the next 30 days, so it's my house or someone else's.

I'm in a slow market, 5x normal inventory, 90+ average DOM. But I'm in a desirable neighborhood with several "flipped" houses down the street going for 600-700K. My house is very well priced at 450K, even for an investor and could stand to make a great profit. It's really the perfect investment property.

Fact of the matter is, 455K was my rock bottom of rock bottoms and my lowered list is already under that, so I don't have a new number -- guess you could say 450K is. So what's the best way to negotiate with an investor to get the most of my asking price? At this point, I told my realtor to verbally offer 447,900. I don't want to ignore the offer, I'm willing to negotiate, but obviously, I want/need the most out of my home.

Thanks!!

Julie

Comments (13)

  • jperiod
    Original Author
    17 years ago

    Plot thickens!! He came up to 435K! He has no realtor, but isn't neccessarily signing with mine, though she mentioned she would be taking care of both aspects, hence would get the full 6% commission.

    So me & DH were thinking about offering 440K and asking our realtor to kick back 2% of that commission until she just called (30 minutes later) to offer me 1.5% of the commission (at the $435 price). I didn't mention I was already thinking of asking her, just told her I'd think about it. She made it clear that she would be doing the work of both sides, but she doesn't consider the investor her client, just us, and she'd be doing this just for us.

    What do you think of this? How much work is involved here for her? Do you think it's too pushy to go back and ask for another .5% ($2000). For us, every little dollar counts since we're already under extreme financial pressure.

  • melbat
    17 years ago

    What about asking for 440 and taking her 1.5% off offer?

  • C Marlin
    17 years ago

    I agree, propose the $440,k she can then offer to reduce more if she wants, give her the option to offer, she will feel more in control.

  • jperiod
    Original Author
    17 years ago

    I just talked to her, and apparently that was the guy's bottom line offer. Why she neglected to tell me that the first time, she couldn't answer. So we still asked her to offer 440 with 1.5% but said if he really will only take 435, if she would kick in 2%. She was quite offended and made it very clear that she will be doing two jobs and it will take a lot of work of her staff and what-not. So I'm not sure what she's gonna go for or offer really.

    Thoughts?? Help, please!!!???

  • C Marlin
    17 years ago

    I would wait until later tomorrow if you don't have a deadline. At the end of the day. I would probably accept $435k with 4% comm for the below reasons you stated. Do you want to keep it on the market, what will it cost you, can you actually live with the reduced price, if so do it?

    "I'm in a slow market, 5x normal inventory, 90+ average DOM. On the market for 60 days, listed competitively at 474K, lowered to 449,900 2 weeks ago. Only about 13 showings and kinda slow the last couple weeks due to spring break."

  • sparksals
    17 years ago

    She's getting two commissions and she's offended? From what you described, part of her loyalties suddenly changed to get this deal together on her terms to get her full commission.

  • sparksals
    17 years ago

    You found the buyer, not her. The buyer approached YOU, so really, she should reduce her commission.

  • jperiod
    Original Author
    17 years ago

    Yeah, I agree, it seems like she just wants this deal closed, which is why I hope the 2K commission sitting on the line inspires her to negociate that 440K for me.

    But I was really concerned if this indeed does make that much extra work for her to run the paperwork on both sides -- and if the extra 1% commission is still worth her time. If I was being unrealistic or generous?

  • sparksals
    17 years ago

    Well, I guess her broker still gets his cut of whatever her commission is. She should be negotiating for your interests, not the buyer's. You shouldn't suggest she negotiate to $440K. TELL her that is what she will do. Period. She is working for you.

  • Linda
    17 years ago

    She's getting two commissions and she's offended? From what you described, part of her loyalties suddenly changed to get this deal together on her terms to get her full commission.

    Sparkels at the risk of getting into another debate over commissions. She is not getting two commission. She will be doing "both sides of the transaction". 2 sides of the deal and only 1% in realty for the buy side. There are no other agents involved so she will be handleing the selling side and the buying side. It is in fact, double work.

    You found the buyer, not her. The buyer approached YOU, so really, she should reduce her commission.

    The buyer was found because of the efforts of the realtor.

    He said he picked up my flyer and still wanted to see/buy my house.

    This was part of the marketing of the realtor. He wouldnt have known her house was on the market without, postcards, flyers, signs, ads, from the realtor.

  • sparksals
    17 years ago

    Linda,

    As I understood the OP's post, the buyer was interested in the home prior to her listing it. I could have misinterpreted that, but that's how I understood it since the investor did not know she was listed.

    What I take exception with in terms of the two commissions is that the realtor suddenly does not seem to be working for the seller when she is in the position of making double commission. The seller told her she wants no lower than $440K and the realtor is balking at that. She should be dealing with the buyer to get the $440K the seller wants, not the reverse.

  • quirkyquercus
    17 years ago

    Can you call up the investor yourself and negotiate? See this is the problem with realtors. People need to communicate directly with one another and not play telephone.

  • jperiod
    Original Author
    17 years ago

    Spark is right, the investor came to me by no way of the realtor. In fact, the flyers on my sign were at my insistance -- my realtor never does flyers. But because of my low number of showings, I insisted on the flyers 3 weeks into the listing.

    Well, looks like it's gonna be done at $435 with realtor kicking in 2% of the commission. We just have to get everything in writing.