So in my last post in this series I placed the “best and final” on my target office building and and guess what happened? I LOST!
Okay, you may be thinking, you were asking for it since you didn’t raise your price. But, I stuck to my guns because that’s what I felt the place was worth. Remember, don’t pay more that the property is worth! Bidding wars only satisfy your gambling needs, they don’t make good scenarios to purchase property.
Anyway, I figured whatever was meant to be was meant to be. I started looking for other properties– still keeping my eye on the one that I lost… just in case. I noticed that one week went by without it being listed in the MLS system as “pending” (which would mean a contract was signed). Then another week passed and another. I found out that the buyers still had not signed a contract after three weeks!
I then recontacted the Seller’s agent and explained that I was an experienced investor who had other rental units. That I felt his deals were falling through because prospective buyers didn’t realize that purchasing a commercial property was different than a residential property and restated my offer at $420K. He went back to the bank and guess what: this time they took the offer! The big lesson is PATIENCE is a hallmark quality of any successful negotiation.
There’s more to the this story with regard to negotiation that I won’t cover in this article due to length and privacy. Suffice it to say that by the end of the negotiating process, I was able to get the sellers down an additional $40K in price due to my ability to convince them that the condition of the property warranted the extra discount.
How long did it take to negotiate this property? Well, from the time that I had put in the first bid to signing the contracts it was about three and a half months. However, the time spent was well worth the discount to market value that I paid.
In the next article, I’ll cover some aspects of contracts and governmental issues in which you need to be aware.
Steven Boorstein
Landlord & Author