Working through a tough retrade and closing the deal.

We recently just closed on a two unit development deal in the Clairemont submarket. The seller had a price in mind that was above all of the sales comparables and my buyer was $50k off. This buyer had purchased an identical property across the street earlier in the year for $100k less, so we had good credibility going into the deal, however this was not enough to bridge the gap and reason with the seller on price. I typically won't recommend this, but in this situation, it was our last resort. I told the buyer's that the property needed a good amount of work and if they wanted to, I thought there was a decent chance that we could get the seller to agree to a price reduction after showing him the amount of work that would be needed on the property since he had self managed for a long time and hadn't been to the property in years. Buyer's agreed and we came up in price to get the deal under contract.

During the inspection, it was obvious that there was going to be more than $50k in work estimates to help our case. I made sure that the seller's agent was with me when I talked with each of the contractors about all of the issues. It was apparent that she was unaware of the problems with the roof, plumbing, foundation and electrical systems. Once the inspection was done, I jumped on a call with the buyer's to discuss a gameplan and where they would need to be to move forward. Buyer's needed to be at a $50k reduction to move forward with the deal, so we started the negotiations out at $100,000 so we had some room in case the seller was going to be stubborn. After many calls with both sides, the seller got back to us and let us know they will meet us in the middle at $50k, exactly where we needed to be at. When I let the buyer know, he was stoked that we got the job done and asked if that was the seller's best. I told him we can give it one last try to see if we can get anything more.

We went back to the seller's agent and told her that the buyer's appreciate their willingness to work with us, but they are still taking on a lot of risk with the current state of the property. The buyer's weren't asking for help with any of the minor cosmetic issues, but rather big issues that whoever owns the property moving forward will need to address asap. The seller's agent agreed with us and they came back and offered another $10k, totaling $60k in concessions. Buyer agreed to the offer and closed the deal. Seller was happy because he felt like he got a great price and was alleviated from the looming issues of the property, and the buyer was happy because he got the deal for less than what they were planning on paying for it and were already aware of the issues that the property would have needed. Great way to build a relationship with a strong buyer in the area.

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