Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
What you are trying to do is get a verbal agreement to take your offer, without actually making an offer. That is a big no-no if you want to buy a property at a lower than asking price.
Trying to feel out the sellers as you are attempting to do before you even make an offer, does not work. Either party can change their mind before the actual written offer is presented. Never make a verbal offer.
Put your money where your mouth is, is an old business saying. The only way it should be handled is:
1: Write an offer at the price and terms you will pay, along with a loan commitment from your lender. In other words, make a firm offer. Only a firm offer, will mean anything.
2: If they counter back with an offer that is not acceptable to you, counter back that you will keep the first offer open for 3 days. This is a way to say MY OFFER IS FIRM, AND I WILL NOT NEGOTIATE TO A HIGHER PRICE. You are saying, I will pay so much, and that is not negotiable.
It is playing hard ball, and I have had it work many times. Going on and on, with the seller and you making offers back and forth or as many calling it Negotiating, is not the way to handle it in your situation. You do not have to buy a home and move, and have no true motivation to do so, and want to buy a property far below what the seller says they will accept, rarely will work when you are so far apart.
I spent from 1972 until I finally retired as an investment real estate broker, handling clients more like a stock broker does. I would buy, sell, and exchange property for the same investors time after time. We had to buy property at a price that would make financial sense as income property. We never overpaid over what made sense. I bought, sold, and exchanged not over 10 year old single family homes hundreds and hundreds of times to investors. My record was selling 14 homes in an afternoon on the telephone. Thirteen were in a to be built 13 units subdivision, plus one home that had to be sold that day to avoid repossession. One investor took 5 and none took less than 2.
The other Realtors in town, knew I was hard nosed on the prices my investors would pay. We would pay a fair price, but not one penny more. When I gave them an offer on a property, they knew I was not going to negotiate. They relayed that to their sellers, and we bought a lot of property. They knew when we sold, we were selling at a fair market price, and would not negotiate. I was listing agent on a lot of sold property, including single family homes, apartment houses, commercial property, farms and ranches, development land and rural land, mobile home parks, etc. In all the years I was in the business, I never had even one of my listings that did not sell within a 90 day listing period, and most sold within 2 weeks.
I took appraisal classes at a major university before I went into the business, and understood how to evaluate the value of all types of property. I would not list overpriced property, and would not list under priced property. I listed at a true value looking at it as an appraiser would. I sold at a true market value.
I would buy, at a price that would allow an investor to have a good Total Return On Invested Dollars (according to Wall Street Journal the only way to judge the value of Income Property in a front page article).
Total Return on Invested Dollars is the sum of 4 measures. They are the Cash Flow Return, the Tax Benefit Return, the Amortization Return, and a fair projected Appreciation Return.
When you are trying to get a verbal commitment to accept your price, there is no wonder you are not getting the attention of the agents involved. It is absolutely the wrong approach when buying income property. Make a FIRM OFFER on the property with all terms and conditions along with your price. Give them 48 hours to accept or reject the offer. If their counter back is not acceptable, simply counter back that you will keep the original offer open for 2 or 3 days. People would be surprised, to see how often that works. Once you start negotiating, you lose control of the purchase and the seller knows you are open to buy at a price other than your offer. Such tactics too often end up with no sale being made.
Putting an offer together, if you have your financing in place, takes an hour or less. Spend the hour doing so. It will show you're serious enough to spend the time on it. Verbal back and forth wastes your time and the seller's time.
Nothing makes people start to reconsider price like an offer in hand.
What you are trying to do is get a verbal agreement to take your offer, without actually making an offer. That is a big no-no if you want to buy a property at a lower than asking price.
Trying to feel out the sellers as you are attempting to do before you even make an offer, does not work. Either party can change their mind before the actual written offer is presented. Never make a verbal offer.
Put your money where your mouth is, is an old business saying. The only way it should be handled is:
1: Write an offer at the price and terms you will pay, along with a loan commitment from your lender. In other words, make a firm offer. Only a firm offer, will mean anything.
2: If they counter back with an offer that is not acceptable to you, counter back that you will keep the first offer open for 3 days. This is a way to say MY OFFER IS FIRM, AND I WILL NOT NEGOTIATE TO A HIGHER PRICE. You are saying, I will pay so much, and that is not negotiable.
It is playing hard ball, and I have had it work many times. Going on and on, with the seller and you making offers back and forth or as many calling it Negotiating, is not the way to handle it in your situation. You do not have to buy a home and move, and have no true motivation to do so, and want to buy a property far below what the seller says they will accept, rarely will work when you are so far apart.
I spent from 1972 until I finally retired as an investment real estate broker, handling clients more like a stock broker does. I would buy, sell, and exchange property for the same investors time after time. We had to buy property at a price that would make financial sense as income property. We never overpaid over what made sense. I bought, sold, and exchanged not over 10 year old single family homes hundreds and hundreds of times to investors. My record was selling 14 homes in an afternoon on the telephone. Thirteen were in a to be built 13 units subdivision, plus one home that had to be sold that day to avoid repossession. One investor took 5 and none took less than 2.
The other Realtors in town, knew I was hard nosed on the prices my investors would pay. We would pay a fair price, but not one penny more. When I gave them an offer on a property, they knew I was not going to negotiate. They relayed that to their sellers, and we bought a lot of property. They knew when we sold, we were selling at a fair market price, and would not negotiate. I was listing agent on a lot of sold property, including single family homes, apartment houses, commercial property, farms and ranches, development land and rural land, mobile home parks, etc. In all the years I was in the business, I never had even one of my listings that did not sell within a 90 day listing period, and most sold within 2 weeks.
I took appraisal classes at a major university before I went into the business, and understood how to evaluate the value of all types of property. I would not list overpriced property, and would not list under priced property. I listed at a true value looking at it as an appraiser would. I sold at a true market value.
I would buy, at a price that would allow an investor to have a good Total Return On Invested Dollars (according to Wall Street Journal the only way to judge the value of Income Property in a front page article).
Total Return on Invested Dollars is the sum of 4 measures. They are the Cash Flow Return, the Tax Benefit Return, the Amortization Return, and a fair projected Appreciation Return.
When you are trying to get a verbal commitment to accept your price, there is no wonder you are not getting the attention of the agents involved. It is absolutely the wrong approach when buying income property. Make a FIRM OFFER on the property with all terms and conditions along with your price. Give them 48 hours to accept or reject the offer. If their counter back is not acceptable, simply counter back that you will keep the original offer open for 2 or 3 days. People would be surprised, to see how often that works. Once you start negotiating, you lose control of the purchase and the seller knows you are open to buy at a price other than your offer. Such tactics too often end up with no sale being made.
I am not sure where you are getting the idea this is an income property?
We probably will make an offer but we want to go over and see it one more time before we do. I want to go through it and do what I am calling a practicality inspection. I want to see if if makes sense. Like as an example, one thing I noticed was that the dishwasher was on the left side of the sink. I am pretty sure it could be moved because there is an equal sized cabinet on the other side of it. I just want to spend some time thinking about how we live and if this house works.
Also, I need to find out if a screened porch could be put on the back. We are scheduling it for this upcoming week. And yes, I know I would need to get my financing in place before I make the offer.
And no, I am not trying to get them to accept a verbal offer or anything. I just wanted to feel out the seller to see IF they were open to negotiations. Some people need to ride the market all the way down. And this agent is notorious for it.
Ok, so we went today for our inspection. Both my husband and the agent decided they think it's worth more than they thought. So my husband and I decided that we are going to put an offer in along with a letter telling them about us and why we love the house and tell them we understand if they say no but that the door is open if they change their mind. And the offer will be above the range that the agent said they wouldn't take. So I will keep you posted. I want a few days to mull it over and get my financing figured out.
I am not sure where you are getting the idea this is an income property?
This is RE negotiating 101, how to get the price. Sticking to a process or procedure takes the emotion out of the sale. Or, at least, it gives that impression. Once you've gone emotional and it's seen by all parties, the other side will use it, and to their advantage.
Where in the country have prices gone down since 2004 by 25%....then recovered and again dropped 25% in the past couple of years. I'm sure it is possible, but that must be rare.....and if it is the case, I'm not sure that's where I would want to buy. Who knows if that area has hit bottom yet.
I've had lots of clients and customers over the years want to feel out verbal offers. Logical of course, but not always practical or realistic. Plus I always say real estate purchases are always more than the NUMBER. The typical contract here in Texas is at least 9 pages...and sometimes with several other pages. I often see these days timing can be more important than price. How many times has a seller said no no no to a verbal offer....I won't take less than X....and when they have a written contract with all the details filled in....and presented to them in person....with a "just sign here" and it is over....and they do it at a price much lower than asking.....I also see prices change over time. Often a seller thinks their property is worth more than listing price on day 1....after 15-30-60-90 days...what they will take often changes....sometimes significantly.
Where in the country have prices gone down since 2004 by 25%....then recovered and again dropped 25% in the past couple of years. I'm sure it is possible, but that must be rare.....and if it is the case, I'm not sure that's where I would want to buy. Who knows if that area has hit bottom yet.
This price is not dropping 25%. It is overpriced to begin with by 25%. In my area (in this price range which is higher), prices dropped about 30% in 2007, then recovered about 20 percent and dropped about 10 percent since then. They are up from the recession, but down in the last year or so. It is because you can no longer deduct property taxes above $10k and mortgage interest above $750k mortgage. This house is priced at PRE-recession level peak.
I know properties below a million are going fast because of pent up demand by millennial who are finally pulling the trigger. But on the high end in THIS blue state, things are very different. This is Illinois.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
