Working with emotional sellers

[Melissa Sheehan]

Hi BP! 

Within a little over a month, I have gone from watching my first webinar + signing up for pro to making offers here in the bay area. It's been tough here as a first time buyer and often feels I'm in over my head but I believe I have time and motivation on my side. We are in negotiations with a seller who is moving with their family out of state due to a job relocation. They bought the house several years ago intending to live in it for a long time and really love the. This house was their first that they bought on an FHA loan and have since done remodeling on. They have a baby on the way and are moving out of California soon after it's born (probably within the next few months).

Here's what I'm reaching out to ya'll for (keep in mind this is east bay area prices). The seller was hoping for at least 50k above listing price. This place "lives like a duplex" but is publicly listed as a single family. Getting comps for this place was not very helpful due to almost no multi families in the area and not even many houses with a comparable square footage size. Our concern then was that this place's appraisal could vary wildly depending on how its calculated. We liked the house and went 40k w/ no contingencies because there was wind of a competing offer coming. To our surprise that other offer never showed up yesterday, leaving ours as the only one submitted. The seller was "very disappointed" in our offer not meeting their asking. We quickly rescinded it and offered a new one for their desired 50k above asking but w/ an appraisal contingency (this made us feel a lot more secure about our offer). We have been told they're receptive to this new offer.

To me this sounds like a very emotional seller who probably should have taken our original (scary for us) offer w/ no contingencies. Yesterday they stated that if they don't get at least 50k above asking, they'll reject all offers and relist the house. We found out that they originally intended to sell in December but due to permit issues were delayed until now. The fact that they didn't accept our offer after already being delayed 2 months makes me think they might actually relist if unsatisfied. I'm not sure how likely it is they'll get much higher than what they're asking for even if they wait longer. It's worth noting that we also have a lot of time on our hands as our current lease doesn't end until May so the longer we can wait to close, the better. 

I was reading https://www.biggerpockets.com/... on how to be a buyer that fixes the seller's problems. Any additional suggestions on how to think from their POV or how to approach this situation ? Also if the appraisal comes in lower than expected, what would you recommend doing next?

[Jonathan R McLaughlin]

@Melissa Sheehan this "lives like a duplex" thing is a red herring. Its a single family with an unpermitted addition. A bank will appraise it as an SF Not sure how CA works so won't comment on the legality, but it is inherently more risky for a buyer.

As for how to approach...think stages of grief. They have a firm image in mind of what they want, but a whole set of circumstances that will encourage them to take what they need. The more time that goes on the more pressure they will feel to get this done. Be polite, be patient, even apologetic about this being the best you can do. If they love the house and you can honestly say you do too, then do it. Let them know your family will be there and its not just "an investment". You want to give them every excuse to change their mind...."well, its a little lower than we wanted  but we sold to this young couple we really liked that loved the house"