What to do when a Seller is Stubborn???

[Eric Phillips]

So I just had an interesting call with a land owner. I am new to developments, never done one before, but have time and financial know-how. I have good connections to financing I just moved to a new area and am getting the lay of the market. This market is solid, not too hot, but not cooling. It could honestly go either way. I found this piece of property 1.8 acres, for sale by owner, and called on it about 6 weeks ago. Initial discussions with owner disclosed it was held in a family trust, 4 siblings all over 70, had an offer 6 years ago for $1.6M, and now they wanted $2M for it, way over valued. Initial call told them that $2M didn't have a basis and was going to put together my best offer. They said that was fine, they hadn't had much interest in it, and they were getting ready to list. They were motivated to sell so it doesn't get passed down to the next generation and start a fight.

Partnered with a successful builder and developer I found through my network. We paid for a real estate agent's time ($50 for an hour) to get a deep dive into the data they had available to them on the MLS. Thank goodness I did. Their information was invaluable. We got a preliminary engineering drawing done, preliminary review with the city, and the city told us we couldn't put as many units on it as we would like, and the improvements were going to be higher than we anticipated. Long story short, about half of the land wouldn't be buildable on. I called the seller and informed them that the best I could do was $700k - $800k. They literally laughed, then got angry. They said that developers are a dime a dozen, and was offended I would offer so low. The only competitve advantage others would have over us is maybe their capital would be a little cheaper, but even then I don't know if their overhead would be enough to offset it, since all three of us would be doing this project on the side.

My question to ya'll is, what do you do when a seller has their expectations so high that no amount of discussions can bring them back to reality? Does anyone have a good strategy on how to approach this? I get it being a gut punch to hear $700 - $800 when you are expecting such a higher rate, and I know I have reacted the same way to similar things in my life. I intend to call them again in two months, but I am just looking for ideas to keep it productive because I feel like it wasn't productive.

Utah, Texas, land development, PUD