All Forum Posts by: Brad Jacobson

Quote from @Jay Hinrichs:

Quote from @Brad Jacobson:

Quote from @Jay Hinrichs:

Quote from @Brad Jacobson:

Quote from @Michael Dumler:

@Brad Jacobson I agree with Jay on this one. Regardless of what was noted on the listing, you and your partner submitted the offer after viewing the property, therefore, it's logically representative that the offer is based largely on what you all saw. It would be one thing if the seller accepted your offer, but then during due diligence square footage diminished, which makes no sense at all unless the property was damaged significantly. As for trying to negotiate large concessions, and in this case a 30k price reduction, you can try to address your concerns with the seller, but more likely then not they have other offers waiting on the table. My question to you is, does this kill the deal? How important is the square footage? Will the appraisal come in substantially lower than the intended purchase price because of this? Hope this helps!

Thanks Mike.  I really appreciate the feedback from you and Jay.  It's been good to think through!

I do think the units that went from almost 1,600sf to 1,200sf do make a difference in rent but it isn't going to be huge, maybe $100-200 per unit since the bed/bath count isn't changing.  

Where I have some heartburn is by competing with several others who offered, the property's price per square foot was $145 and there were offers received from out of state investors I really had to struggle to compete with.  Now with the findings, we're up higher than $170/sf.  I like Jay's thought of putting myself in the shoes of the listing agent because we've all made mistakes like this but I also feel that listing the property as nearly 30% larger and then quietly revising the square footage back to the numbers noted on the property condition disclosures and county records merits a concession does it not? 

 U wont know unless you go out of contract and someone else pays the full price its a risk/reward scenario.. but no harm in asking right. ? 

That's exactly what I'm asking here - I am going to note it as a finding in our due diligence and hoped to leverage it for a concession since it was an error on the listing side.  30% square footage is significant.  

I was hoping to learn how people have had success going about requests like this but it seems like early feedback from you and others tells me it's really not appropriate to ask for anything which is good feedback since I agree, we've all made errors when creating listings. 

 I would not say its not appropriate  but it does put the listing agent into a pickle with their seller..  And as such you probably alienate that agent is one thought and they will just say no and go to the next offer and if U are OK passing on it because of this thats fine to. 

Thanks again Jay.  The deal still makes sense at the purchase price I'm currently UC with so I plan to complete the purchase.  I'll continue to try to get feedback from the listing agent and go from there.  

Quote from @Jay Hinrichs:

Quote from @Brad Jacobson:

Quote from @Michael Dumler:

@Brad Jacobson I agree with Jay on this one. Regardless of what was noted on the listing, you and your partner submitted the offer after viewing the property, therefore, it's logically representative that the offer is based largely on what you all saw. It would be one thing if the seller accepted your offer, but then during due diligence square footage diminished, which makes no sense at all unless the property was damaged significantly. As for trying to negotiate large concessions, and in this case a 30k price reduction, you can try to address your concerns with the seller, but more likely then not they have other offers waiting on the table. My question to you is, does this kill the deal? How important is the square footage? Will the appraisal come in substantially lower than the intended purchase price because of this? Hope this helps!

Thanks Mike.  I really appreciate the feedback from you and Jay.  It's been good to think through!

I do think the units that went from almost 1,600sf to 1,200sf do make a difference in rent but it isn't going to be huge, maybe $100-200 per unit since the bed/bath count isn't changing.  

Where I have some heartburn is by competing with several others who offered, the property's price per square foot was $145 and there were offers received from out of state investors I really had to struggle to compete with.  Now with the findings, we're up higher than $170/sf.  I like Jay's thought of putting myself in the shoes of the listing agent because we've all made mistakes like this but I also feel that listing the property as nearly 30% larger and then quietly revising the square footage back to the numbers noted on the property condition disclosures and county records merits a concession does it not? 

 U wont know unless you go out of contract and someone else pays the full price its a risk/reward scenario.. but no harm in asking right. ? 

That's exactly what I'm asking here - I am going to note it as a finding in our due diligence and hoped to leverage it for a concession since it was an error on the listing side.  30% square footage is significant.  

I was hoping to learn how people have had success going about requests like this but it seems like early feedback from you and others tells me it's really not appropriate to ask for anything which is good feedback since I agree, we've all made errors when creating listings. 

Quote from @Jay Hinrichs:

Quote from @Brad Jacobson:

Hi @Jay Hinrichs,

I totally agree with everything you said but my question wasn't if a concession was appropriate or not, my question is, what are your best techniques when trying to negotiate large concessions? 

Thanks

IN this case as I stated the BIG BLUFF  I mean your an agent folks will look at you in a different light IE you know the score .. or are suppose to know the score. 

Keep in mind this happens ALL the time..  assessor misses sq ft  or appraisals come up with different sq footage.  What it does do though is gives you an out. 

I mean put the shoe on the other foot lets say you took a listing and you made a boo boo how would you defend yourself and would you expect your seller to take a big price cut because YOU made a boo boo or a Scrivner error ? 

Thanks Jay.  I appreciate the thought to look at it from the listing agent's perspective.  You're right.  I think I have some negative feelings towards the lack of communication and quiet revision to the listing so I thank you for the insight.  

Quote from @Michael Dumler:

@Brad Jacobson I agree with Jay on this one. Regardless of what was noted on the listing, you and your partner submitted the offer after viewing the property, therefore, it's logically representative that the offer is based largely on what you all saw. It would be one thing if the seller accepted your offer, but then during due diligence square footage diminished, which makes no sense at all unless the property was damaged significantly. As for trying to negotiate large concessions, and in this case a 30k price reduction, you can try to address your concerns with the seller, but more likely then not they have other offers waiting on the table. My question to you is, does this kill the deal? How important is the square footage? Will the appraisal come in substantially lower than the intended purchase price because of this? Hope this helps!

Thanks Mike.  I really appreciate the feedback from you and Jay.  It's been good to think through!

I do think the units that went from almost 1,600sf to 1,200sf do make a difference in rent but it isn't going to be huge, maybe $100-200 per unit since the bed/bath count isn't changing.  

Where I have some heartburn is by competing with several others who offered, the property's price per square foot was $145 and there were offers received from out of state investors I really had to struggle to compete with.  Now with the findings, we're up higher than $170/sf.  I like Jay's thought of putting myself in the shoes of the listing agent because we've all made mistakes like this but I also feel that listing the property as nearly 30% larger and then quietly revising the square footage back to the numbers noted on the property condition disclosures and county records merits a concession does it not? 

Quote from @Mike Dymski:

800 SQFT is big difference; so, adjust your price according to the comps and walk them through it.  The property will likely not appraise for the current price if that price was properly indexed to 3600 square feet.  You may have to factor that into your modeling if the seller is unwilling to move on price.  I'd be careful with using the county records as they often do not have the accurate square footage.  I carry a 100' tape measure and get a quick estimate during the walk through.

Thanks Mike.  I was thinking along that line of pulling comps that are near the 2,800sf as opposed to the 3,600sf.  They're just harder to come by, especially in this quickly changing market with prices rising every few months.  I'll also get a measurement done this week while still in DD.  That's smart you carry a tape measurer for moments like this!

Hi @Jay Hinrichs,

I totally agree with everything you said but my question wasn't if a concession was appropriate or not, my question is, what are your best techniques when trying to negotiate large concessions? 

Thanks,

Hi Fellow BP Fans,

I'm currently UC on a triplex that I snagged off the MLS last week. It was a competitive bidding war.

The MLS listing noted the combined square footage of the three units was 3,600sf. During the walkthrough, I felt like 3,600sf might be a stretch but I still fought to win the property. The seller's property condition disclosure notes that the square footage was pulled from county records but upon my personal review of county records, the property only measures about 2,800sf.

I contacted the listing agent over this and got no response. A few days later, the MLS listing square footage was updated (after it was noted under contract) but I still received no feedback from the listing agent. Luckily, I had saved a PDF of the prior measurements.

My partner and I decided we're going to use this as a due diligence finding and therefore concession request to try and knock down the price since I had to compete with several other parties for a largely misrepresented property.  

My question is - what is the most effective way you've done or seen to get a large concession when purchasing a home?  It's one thing to ask for a new water heater, it's another to ask for $30,000 off for a misrepresentation.  Any hot tips on knocking down a sales price significantly aside from simply explaining why and asking for it?  What have you found to be the most effective negotiation technique when talking larger numbers?

Thanks in advance,

Hey @Nicholas Burnham,

In my experience, I've seen two different scenarios from underwriters:

1. If the property is owned for and received income for at least two years, I've never seen an underwriter reject the income.

2. Most underwriters will accept the income after one year based off your tax returns.  

If you need the income to help you qualify quicker, you'll likely have to look at local or private lenders who use different underwriting guidelines that the standard fanny may or freddy mac lenders.  

Good luck!

@Mohammed Nasser, great question!  I get asked this pretty frequently and my typical response is along these lines.

If you're looking for work (which I highly recommend if you plan to do RE for the rest of your life) you should consider getting a full or part time gig at a property management, title company, real estate brokerage (as an assistant or admin), mortgage broker, and/ or work part time for a local investor either finding deals or doing cold calls.  You need to start rubbing shoulders with investors and people doing real estate every day so you can learn and master the process.

Once you get your license, try to do your first 3-5 deals while still employed as a W2 but once you've got your footing, quit W2 and go crush the income game as an agent!

Good luck!

I self manage four of my SFH around my hometown and my biggest struggle is probably getting too involved and not protecting my own time. I pose as the landlord and not the owner to ease the difficult conversations but I struggle with offloading the work to GCs and handymen because I take so much pride in the condition of the properties and often prefer to be onsite to evaluate the needed repairs and/ or changes to the properties.

Even just four properties ends up being a time drain on me at times.  I justify it by thinking I do it in exchange for what would cost probably $600/month in PM fees but I know that deep down, my time could be spent better elsewhere.