Dallas-Fort Worth Real Estate Investor Club

Need Negotiation Advice

  • 31 Mar 2018 8:07 PM
    Message # 6009676

    I have a lead with an older lady in a 3/2/2 grandfathered residential property. She shared with me it is now technically zoned as commercial. So it can remain that way so long as it’s occupied. She hasn’t been willing to move because she hasn’t received the Price point she wants - $175k. Comps are around $137-145k. Hard to tell as solds are all over the place. She owns an adjacent empty lot. Would sell both for $275. She says no major issues in house 🙄. ARV wouldn’t be any more than $175k-$180k. Any ideas for negotiations? I believe she owns outright. 

  • 04 Apr 2018 8:52 AM
    Reply # 6015712 on 6009676

    If you go to www.tad.org and get the legal description of the lot and then go to www.tarrantcounty.com and search Realestate Records with her name and look for a Deed of Trust, Release, etc. with a matching legal description, you should be able to determine if she owes any money on either property.

    Market is over cooked. Online sites like Zillow produce automated computer generated comps that don't properly consider school districts, condition, etc. The end result is that most home owners have an over inflated perception of their homes value. 

    When I go to make an offer to a home owner I pull comps with interior pictures and sale prices, days on market, etc. I sit in their home and show these to them slowly one at a time so that they can compare and contrast with their own property. Then after a few of these I show them a top of the market remodeled comp taking care to high light the upgrades. This provides a natural transition into discussions about remodeling costs. Where I throw out some ruff numbers and underscore how material and labor costs are likewise experiencing rapid inflation. At the end of the discussion, after setting the stage, I make my offer. Hopefully I have painted a picture in their mind that helps change their perception of the properties value and more importantly consider the value of the property in it's current condition as opposed to what it could be worth after a rehab. 

    Anyway, that is what I do. I educate and hopefully over time change their perception of the value to something reasonable and inline with with my perception of the value. 

    Perception is reality!

    Last modified: 24 Apr 2018 2:23 PM | rockne ardoyno
  • 23 Apr 2018 1:42 PM
    Reply # 6116343 on 6009676
    Deleted user

    Rockne is spot on here... I would make my case and make an offer. If she balks then you walk away and find another deal. Never make a bad deal. 

    Brian R. Baker, MBA 

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