This is the power of keeping your cool at the negotiation table!
My partner and I viewed a great property in Cleveland Friday afternoon. The 3 bedroom home was currently rented for $600.00 per month and only in need of cosmetic repairs. The seller was asking $15,000.00 for the property which was a good deal but I was looking for a great deal!
After viewing the home I asked my partner to call the seller and offer him $10,000 for the property. As you can imagine the seller said no way and the lowest he would accept would be $14,500.00.
My partner called me with the news and suggested we buy it for $14,500. Although an extra $500.00 is nice I was still confident we could get a better price on the property (I wanted it for $11,500.00!).
I then asked my partner to call and tell the seller we appreciate him coming down on his price but we just could not pay that much for the home!
Saturday and Sunday my partner called me asking if he should call and make him a higher offer. He was concerned we would loose this deal to someone else. I advised him not to call till Wednesday as I wanted to see who would cave first!
Monday came around and the seller offered my partner another occupied property he owned for $13,500.00. He stated he needed to sell something quick! That’s what I like to hear!
My partner told him we were still interested in the first house just not at his price. The seller told him he would sell us the first home for $13,500.00 (he came down $1500.00 in 3 days!).
My partner called me very excited with the news and was ready to buy! My gut told me I would eventually be able to purchase the property for $11,500.00 and I had no problem waiting! I asked my partner to call the seller and tell him $11,500 is our bottom line and if he can’t sell it for that “no hard feelings!”
My partner called, then called me back and said “I hope you are not made at me but I bought the house”
“For how much?” I asked
He told me $12,000!
Who can be mad at that?? He did a great job negotiating and added thousands to our bottom line!
By not being attached to the deal and waiting 3 days we just made $3000.00 more then we would of on this flip!
I share this story to show that by making strong cash offers, sticking to your guns and never becoming emotionally attached to a Real Estate deal you will always make money in this business!
For a great read about negotiating deals check out Think big and Kick Ass