We have a client who just closed on his condo last week. Several weeks ago he determined this property would fit his needs, and he asked us to represent him during the negotiation process. One of his main goals was to purchase the condo at a very good price.
We started by researching the condo market in the neighborhood and within the condo development itself. Our review of recent MLS transactions showed this condo was already competitively priced.
Next, we looked at the condo's listing and sales history. This condo had been on the market for 22 months. During that time it had undergone 3 price reductions, with the most recent reduction dropping the price $57,000 below the orginal list.
Then we researched the mortgage and checked for other liens on the property. We found there was still plenty of equity left in the condo even though it would end up selling for well below the seller's original purchase price.
Last, we looked for evidence of delinquent property taxes and evidence of foreclosure. We didn't find any issues on either front.
Now we were ready to draft the offer to purchase. We drafted the offer, and along with that we submitted a cover letter. The cover letter outlined the justification for the price. We included recent sales data from the condo development, and we cited data from the MLS which showed a very strong trend toward lower condo prices. We stated in the letter that the offer price was not only based on recent sales data, but the overall direction of the market.
In our letter we acknowledged the offer price was well below what the seller was hoping to receive, but we politely stated the price was non-negotiable. We thanked the sellers in advance for their consideration, and we awaited their response.
Two days later the sellers signed the offer. The buyer's inspection went well and we proceeded smoothly to closing. As it turned out the sellers did not like our tactics and decided they did not want to sit with us at the closing table. They completed their closing paperwork several days prior to the buyers.
I sympathize with the sellers and understand why they were unhappy with the results of their sale. It was a bitter pill to swallow. But our job was to advance our client's goals and protect his best interests. And as it turned out, our strategy worked. It's also worth mentioning that although the buyer hired us to represent him for his purchase, it was the sellers who paid our commission.
For more information on buyer representation and how the buyer agency agreement works, you can check out this link on DaneCountyMarket.com .
Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com
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