How to "negotiate" a verbal offer?

[Sam Leon]

I am dealing with a FSBO property. Seller is not experienced in the process and did not hire an agent for representation.

I sent in a formal contract offer. He has a few other offers, but from what he described, they didn't really provide him with a formal offer, more like a brief email or text message, which I think is even weaker than a purchase LOI.

He has started to counter.  Not sure if he is countering everyone at the same time, or just countering me.  But I got a counter text message, not the original contract signed and countered.  So none of this back and forth is binding.

How would you deal with this?  I have done negotiations with seller's agents by text and that's only because I know they know what they are doing and will always immediately follow with a formal contract submission.

[Karl B.]

I deal with seller's agents by phone and text but when it comes to FSBO I 100% prefer phone.

Get him on the telephone. Now, I don't like talking with strangers on the phone but love talking with a FSBO on the phone. Things I will mention to the seller:

-Having no realtor(s) involved will save him 6%. I will then state the savings, numbers-wise. 

-Ask him why he's selling (this will likely bring up a pain point for the seller, which is good for a sale: bad property management, bad tenant experience, doesn't have time, no longer lives in the area so he/she can't properly run the property, etc.)

-Ask what needs repaired (related to pain points - the seller will likely minimize the issues but he/she will internalize all the issues)

I typically make an offer first. The FSBO seller then likely counters. I then talk about how close we are to an agreement - only X amount off. The seller typically lowers his counter or tells me "Let's split the difference."

At this point I know we're close. I pretty much never "split the difference." I go up slightly (my initial offer bakes this likelihood in) and if the seller counters again I explain why I can't go any higher (all good reasons - winter's coming and the gas bill will not be low, it'll take at least two months to rehab a unit/units and fill vacancies, etc.). 

Point is, get them on the phone. It's great. And aside from 'the deal' they'll recommend tradesmen, tell you about the property history, tenants, the area, neighbors, and much more.