Be ready to make an offer, be ready to walk away

I drove up to a house I was interested in. A red sign caught my eye as I parked across from the target house. The sign was on the house right across from the one I was planning on inspecting. That red sign was a “for sale by owner” sign. The house was vacant. I called the number on the sign. No answer but I left a message.

I went on to inspect the target property. Yup.. it was what I expected, torn up. That equals money IF I can BUY IT RIGHT. So I went home and did my numbers. I received a phone call that night from the owner of that FSBO. We set up an appointment to see it. That got me excited.

That same night I made an offer on the target house. The agent told me he will get back with me the next day. I said cool. The next morning I met with the FSBO. Let me back up real quick…BEFORE I met with the FSBO I first got myself ready, ready to buy. I filled in some areas of the contract that I knew for sure and took that with me. I also told myself I am going to make an offer today. I prepared myself mentally. I was READY to make an offer. HOWEVER, I was also ready to walk away.This mindset was important. I never felt I HAD TO HAVE THAT PROPERTY. I showed up ready, ready for both ways.

BEFORE I got into my vehicle to meet the FSBO, the agent texted me with a counter offer. I countered that counter offer. I received a counter to my counter. I ACCEPTED! So exciting!OK now to the FSBO.

I met him at the property. He was a TALKER! I just listened. He did tell me prior how much he wanted for that house. WAY TOO HIGH for my taste. So I proceeded to point out all the work that needs to be done. I pointed out also that this property is not in rentable condition (he said by the way it only needs a touch up… yup about $25Ks worth). We went outside and I pointed out more stuff. After all of that I told him my offer. His jaw dropped and he said WHAT? NO WAY. I was calm and still pointed to all the problems HE will have to deal with if he doesn’t sell. I did say, I can take this problem house away from him so that he doesn’t have to worry about anything anymore. One thing I said (this is the part where I was READY TO WALK AWAY) that really made him think and I saw that he was motivated, I said “Go ahead and talk this over with your wife. Call me when you are ready to sell.” He came back quickly with a counter offer. We went at it one more round and we agreed on a price. It was 43% of what he originally wanted.

I acquired 2 properties in ONE day. Both properties are facing each other on the same street. What a blessing.

The lesson here is DO NOT show you are desperate to buy. Be READY TO BUY but at the same time BE READY TO WALK AWAY! Happy investing.

John Morey

Real Estate Entreprenuer

Huntsville, ALABAMA