The standoff
I have clients who are in the middle of a standoff. The sellers of a place they want to buy are under water. They will be bringing cash to closing to cover equity, plus fees. Needless to say, they bought a few years ago, had low equity to begin with, and don’t have piles in the bank to help them get out of this place. One of them has a great job offer on the West Coast. It is a really nice place. I wish they had gotten more enjoyment out of it before being tempted across the country.
This kind of problem makes my buyer-broker heart heavy. I have no joy in seeing someone so stuck in their real estate. But I also don’t want my clients paying top-dollar to mitigate their mistake. Thus, the standoff.
A month ago, negotiations broke down after a couple of volleys. Since then, nothing has changed. No price reduction. No other place like it coming on the market. So, a month later, my client prepared a “best and final” offer for these sellers. It was slightly higher than where we left off last month. We do not want to train the sellers into thinking that the longer they wait, the higher my clients will go. They are committed to the opposite. I was instructed to tell the seller’s agent that their intention is “any subsequent offer will be lower than the one in hand.”
Why?
1. The clock is ticking on the new job.
2. This property is overpriced and dead on the market. The seller’s position gets worse over time.
3. The seller cannot afford to rent this without losing big bucks every month. Their PITI is too high for that.
4. And most importantly: the fear of loss is greater than the joy of gain. It will be hard for the sellers to face getting lower offers once they have our very best.
Our question is how the sellers are going to beg, borrow or steal in order to come up with enough cash to get out of this place. Or if they can.
Have you tried this? Do you think is works?
