Converting semi-motivated sellers

[Eric H.]

Hey BP Fam,

I have a semi-motivated seller. He plans to relocate soon and wants to liquidate some assets. Also, one long time tenant passed away and he doesn’t feel like the hassle of trying to find another qualified tenant. I want to get some advice from you guys before I spend any more time on this lead. It’s a duplex, 3/1 each unit. One unit rehabbed in 2000 and is occupied, other unit needs 3k rehab and is unoccupied. Seller wants $200k. My offer was $90k. Comps for as is homes are selling for $110k. I informed the seller of my findings. His argument is that those comps are for houses that are in extremely worse condition than his. I haven’t seen the property. I want to provide the seller info regarding comps for his house but I can not find any ‘accurate’ comps for repaired homes. How important is the year built for comparing homes? (1980 vs 1940) Without me actually seeing the property, is there any way to further qualify this lead? I don’t want to waste my time visiting the property if we are extremely far off in terms of price. My exit strategy is wholesaling.

All advice is welcome and greatly appreciated.

Thanks in advance.

E. Harris

[Andy Gross]

This guy sounds dillusional. He wants a $90k premium on a $110k house? Only if the 30lb in gold bricks in the basement conveys.....

My thoughts (and feel free to ignore them, I'm a newbie) is that you need to figure how much it costs to get the nearest comp into the same condition as his place, all while figuring out what an acceptable profit and risk is for you. At the same time, is his place "over-improved" for the neighborhood? If there are no $200k comps in the neighborhood, this guy might be a little crazy. You can't negotiate with crazy. 

But seriously, with that kind of difference, it sounds like it's tough. If you want to spend the time, meet him and go over comps and the benefit of signing a contract with you. If he doesn't like what you have to say, say "listen, it looks like it won't work out with what I have to offer, let me get you the names of a few Realtors who are well-respected/trusted/liked/hungry and who work with properties like this. It's likely going to take more time to sell, but you may be able to get a better offer." Then, walk away and call back in a few weeks.

Not speaking from experience in real estate because I haven't done any wholesaling, but this is my thought based on my negotiations as a lawyer. If there is too much of a gap between the parties, work on building trust, the ability to walk away, and circling back.