Hopefully the third time is a charm in trying to sell The Roach Duplex. After a ridiculously low offer that we turned down, and after a failed attempt at getting a buyer to follow-through on their contract, we now have a third offer…
My wife received a call this morning to check the duplex out, and — after taking a look — the person called back with an offer of $26,000. Not wanting to drag out the negotiations (I’m going away this weekend), I decided to just name my very lowest acceptable all-cash price — $28,500. He balked and said he would only come up to $26,500. So, my wife wished him well, and let him know that if he changed his mind, he was welcome to give her a call back.
About two hours later, he called back, and said he wanted to look at it again, this time with his wife. Again, after taking a look, he called my wife an offer. This time $27,000. Again, we said that we’d go no lower than $28,500, and again, he balked. Apparently, at one point in the conversation, he said to my wife, “I know what’s going on here…you really need to sell this place so you can get the cash to buy another place. So I’m not offering any higher.”
Had I known at the time that he had said that to my wife, the asking price would have gone up a WHOLE LOT, but she didn’t mention that part until later. Anyway, I finally got on the phone with him directly, and after several minutes of him negotiating with himself, he still wouldn’t come up to my asking price. I said goodbye, and let him know that he could call back when he changed his mind.
About an hour later, he called back, and accepted our $28,500 counter-offer. We’re meeting tomorrow to get the contract signed and collect the earnest money check. Assuming that goes smoothly, we’re scheduled to close in 6 days (next Wednesday). We won’t be making a lot of money on this one, but other than changing the locks, putting up a sign and a lockbox, and answering phone calls, we done practically no work on this property; in fact, I’ve only been there once since I’ve owned it.
Btw, I was reminded of an important lesson during my negotiation today:
If you want to keep your buyers happy (and you do!), always leave yourself enough negotiating room to allow a reasonable back-and-forth negotiation. While I know this lesson very well, I didn’t follow it today because I was trying to rush the process.
Specifically, had I made my first counter-offer several thousand dollars above my minimum acceptable price (instead of at my minimum acceptable price), not only would it have been easier for the buyer and me to negotiate up to my desired price point (over several rounds of negotiation), but it also wouldn’t have made the buyer feel like I was being inflexible.
Basically, instead of telling the buyer, “Here’s my price – take it or leave it,” I easily could have gotten the buyer to the same price, but made him feel like he was getting a great deal. Instead, he probably feels like he’s being taken advantage of, despite the fact that he DID get a great deal.
Good lesson for all sellers out there (including myself)…
Just stumbled on your web site. I’m beyond impressed. I really admire people that can focus and think strategically. Continued success. I’ll work on modeling your business.
It’s taken me a loooong time to learn, but I’m finally catching on to the notion that I need to price my deals several thousand over what I want to get, because most people want to knock you down a few grand, just to make themselves feel like they are getting a deal.
One of my buyers recently told me that he can’t sleep at night if he takes a deal at asking price- even if it’s a smokin’ deal, he still feels like he has to get the price down.
I guess it’s an ego thing.
Shame really, 28k plus say 20k for repairs. Get the house under a 50k fixed 30 yr mortgage + taxes and insurance all for about $450/mo. 2 units renting for $500/mo. That’s a smoking deal.
Congrats, and great insight – again 🙂
We are all slaves to anchoring. “Getting to Yes” is the classic book on negotiations.