House #31: Two Offers / 1st Contract

May 17, 2012 · 7 comments

We received two offers on The Puzzle House yesterday, and there may be a third one coming today…

The first offer we received was great — full-price, NACA buyer, looking to close quickly.

The second offer comes with a funny story…

We had received a phone call from the buyer’s agent earlier in the day, and she asked if we’d be willing to meet her partner at the property to “discuss some things.” I knew exactly what that meant — the agent wanted to tell me all the things wrong with the house, so that when he presented me with a low offer, I’d feel grateful. Turns out I was 100% correct. Unfortunately, not only did the agent think I was an idiot, but his negotiating skills were pretty horrible…

The best he could come up with to “tear down” my property was to point out that the windows weren’t new (they are vinyl and in great shape) and that we didn’t rebuild the entire deck structure (we only replaced the cosmetic portion of the deck as the structure was in great shape). When I asked “What else?” he couldn’t come up with anything. But, he then proceeded to tell me that his client thought a “fair price” was $35,000 below list. If anything, his terrible negotiating only serves to reinforce that the house was well-priced.

I told him that we had a full-price offer in-hand and that if his client wasn’t willing to make a reasonable offer, there was no reason to continue the discussion. Personally, I don’t believe there even is a retail buyer — this agent works for a brokerage that specializes in investment property, and my guess is that they are trying to purchase my property at a significant discount and resell it. If I would have been willing to sell at the price he mentioned, they could have easily bought it, turned around and put it back on the market and made a quick $25K by reselling it. I guess I can’t fault them for trying… 🙂

Anyway, we parted ways, and to-my-surprise, about 2 hours later we received an offer from him, for exactly the price he threw out during our discussion. There was no pre-qualification letter, so I requested one. Based on what they sent about an hour later, I’m guessing they just went online to a local bank, filled out a web-form and submitted the form letter that it spit out — it was certainly not a seriously pre-qual letter. Just another reason to believe that the buyer for the property was probably the agents themselves.

Anyway, we accepted the first offer, and they will be starting the NACA-required inspections in the next few days…I’ll update progress when we get through the inspection period…

7 responses to “House #31: Two Offers / 1st Contract”

  1. Zachary Clough says:

    That’s ridiculous! The agent still went ahead and put in their low-ball offer after you specifically told him you had a full price offer already on the table … why even waste everyone’s time at that point?

  2. J Scott says:

    Hey Zach –

    I guess they thought I might have been bluffing and decided it was worth the shot… 🙂

  3. Wow. You definitely handled it with class and integrity. I would have been tempted to bait them a bit to see how much I could make them dance and jump through hoops. Great job on the house. This is one of your crown jewels for sure.

  4. Zac says:

    I guess … did you even bother to counter?

  5. J Scott says:

    Zac –

    Didn’t bother to counter. We had a full-price offer on the table, and we decided to go with that one instead (obviously)…

  6. J Scott says:

    Thanks Andy,

    I did have a little bit of fun with the guy while he was “grilling” me about our renovations, but ultimately, it wasn’t worth ruining the relationship when we may end up doing business with them at some point in the future (doubtful, but who knows).

  7. Matt K says:

    House looks great J.

    Hahaha, that’s funny a story. Damn those low ball offering investors 🙂

Leave a Reply

Your email address will not be published. Required fields are marked *

Sign up for our Newsletter and get immediate access to our FREE 150+ Page eBook on New Construction, plus all of our business tools: Single-Family and Multi-Family Business Plans, Rehabbing and Buy-and-Hold Spreadsheets, Contract Templates, and more!
We respect your privacy. No Spam...EVER!