Why You Have To Be Willing To Walk Away To Close the Best Deals

Question

In every corner of real estate, those that are willing to walk away will always close the best deals. That doesn't mean you have to be rude to walk away, it's all about valuing your time and price and not spending excess time in a back and forth when you know your numbers. Too often as a new investor, we can't let go of that property we love so much. And then we pay for it later. All because we weren't willing to walk away.

My strategy as an agent and as an investor has always been the same. This is what I have to offer, I am confident in what I am offering, this is my only offer. No hard feelings if you don't take it, here is my card or contact info, just give me a call when you decide. Then, I never, ever adjust my offer. I still think negotiation is valid, but it's often just a game because neither side wants to walk away. For me, it's a waste of time to go back and forth over and over again. I don't like to spend all this time going back and forth over $1,000 or one cracked window.

As an investor, I submit my offer with an explanation of why my numbers are the way they are and that's it. I don't keep calling them, I don't even worry about it. I will check in two weeks later, but they usually call back before then if they were really ready. Once a seasoned seller knows you will negotiate, they will keep going and expect you to follow. When you lay out why your terms are just as important as the price and give a detailed background on the comps and compare them, there isn't much they can say. And PS, no one else in your market is likely to give them all of that information. That's why your offer is your only offer.

Some people find this too hardcore or not friendly, but it's not like that at all. It will save a ton of time over the year and give you more freedom to make more offers instead of waiting on one. I know that a lot of people hug the deal because they are hard to come by in their area, but that still doesn't make it a good deal if you can't get it at the number you want. You can still be friendly and build a relationship with a seller by not caving or wavering. In the end, I think that most sellers respect this more and trust you more when you say "this is my offer and this is why" and then you stick to that, no matter how long they take to get back to you to do the deal.

Terrell Garren · Answer

@Jonathan Greene You nailed this - The ones that keep up-bidding are usually the ones who try to get that up-bid back during inspection too.I had not bought anything off the MLS for several years. Prices are just to high. I did call my realtor about a 1996 as-is 3BR/2BA listed at $125K recently. Someone had already offered $120K and it was under contract. I saw it relisted a couple weeks later. Realtor said the buyer tried to get their money back due to inspection findings. I offered $110K good for 24 hours. Out of state seller accepted in 2 hours.

Jonathan Greene · Answer

@Eli Gilbert it gets easier. It's the hardest when you only have a couple deals or clients and that makes complete sense. But once you pass and they come back, it's way easier next time.

Jonathan Greene · Answer

@Terrell Garren I am the same. Retail agents always think it's a joke until you walk. I have also imposed this structure:Offer is X for 24 hours. After that it is X-2% for 24 more hours. Etc.I was a prosecutor for seven years a long time ago so my hard-line offer tactics go way back. The same as clearing up a docket of cases, it saves us time by making one offer and sticking to it. Once you get known for it, the agents on MLS deals know what to tell their clients. Once they also know you close, just as you said you would, and stand by all your conditions, it becomes much easier.If I am seller and an investor keeps upping his or her offer when I say no, I will always think there is another ceiling or someone who will just make an offer and walk. The ones that keep up-bidding are usually the ones who try to get that up-bid back during inspection too.

Terrell Garren · Answer

I make my best offer and only offer on MLS listings with the caveat that it is good for 24 hours. I guess I'm impatient and do not tolerate slow sellers well. I have a wonderful realtor that knows better than to ask me for "best and final". One the other hand, I have spent months in the outbid process on properties at the local courthouse.

Eli Gilbert · Answer

@Jonathan GreeneGreat advice!Very hard to uphold but golden!Thanks

Jonathan R McLaughlin · Answer

@Jonathan Greene actually I think your method is more likely to lead to a good buyer seller relationship than the “conventional” way. I also often outline the criteria for our purchase in terms of rate of return based on the information they provide and invite them to offer any information that would materially change our numbers.In other words, “sure, I’ll pay your price if you can get me this result” It’s a great intro to a creative financing discussion as well...

Nicole Heasley Beitenman · Answer

Thank you for posting, @Jonathan Greene! Great advice.

Jonathan Greene · Answer

@Terrell Garren It happens every time. I am an agent too and I can read the buyers for my sellers when they bid too high to start, we know what's coming. All of a sudden a structural engineer says it's a $7,500 fix for "support." We bring in our own engineer and he says it's fine. It's partly because, on-market, the high bigger starts to question how much higher they bid than second place and they create a scenario in their head that they are entitled to some money off. Then, as you said, next up always pops in and closes the deal right away.

Jonathan Greene · Answer

@Jonathan R McLaughlin thanks and I agree. My relationships with all sellers are very good because I am always there for them when they want to talk about the offer again, but I always stay honest and straightforward and sure of my analysis. Sometimes it takes a month, sometimes it takes six months, sometimes they think they have another deal and when it fails because the buyer lies about no repair requests and then makes ten, they call me. Good point to to give them an option of presenting whatever they want. I have done that and had information there to show them that they were off.