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Marching to a $300,000 Solution | Patience

By
Real Estate Broker/Owner with KD Realty - 408.972.1822 CA DRE#01366594

I received a call from a local commercial real estate agent interested in a duplex I had listed. He explained that he does not have Supra key access and would be representing himself on the purchase.  We agreed to meet at the property, and I would provide access. 

We spent 2 hours at the property.  I answered all of his questions. He was drooling. He wanted the property. He lives less than 2 miles away.

He had preapproval yet it was not nearly enough to make the purchase.  He asked if I had other lenders I could recommend.  Why yes, I do.  He actually worked with two lenders I recommended.

No matter how he tried to slice and dice it, he just could not understand the commission he had not yet earned on his commercial real estate business and the commission from the purchase of the duplex, could not be used to qualify for a higher loan amount.

As he memorialized all the work that needed to be done to the property, this commercial real estate agent carefully explained to me that the seller would not get what we are asking.  

This agent has completed one residential real estate purchase 2 years prior on his personal residence. Therefore he knows! 

We reviewed the comparable sales which proved, based on current market conditions, the property was priced right.  I also detailed the work that contractors had done prior to listing the property. It was substantial. 

Not only was his offer low, $300,000 below list/market, but the lender conditions were also that he needed to get lease agreements, with deposits in place prior to closing.   How on earth are you going to do that?

 

Not a problem, he said.  Once the seller accepts the offer, I will hold open houses to find tenants. You can put a combo lockbox on so I can access it to show the property to prospective tenants. And I will need to be able to access to get estimates to complete some work in the back unit before I rent it.

Oh wait, what do you think I can get for rent? 

Also, what do you think it will cost to get new windows and remodel the kitchen in the back unit?

What?

I presented the offer to the seller who rejected it given that the commercial agent/buyer already exhausted his options with additional lenders. The seller said ... if I were going to do that I would just do it myself. 

The agent continued to call and email me. 

I explained that even if he did have the funds, the seller does not agree to the terms.  And if the seller did agree to the terms, I would have to be there every time the property was shown to prospective tenants.  No way, no how, would I provide access via a combo lock box!  I reminded him that he was self-represented and IF I were to do all of that, I would be representing him, which by the way, I would not do. 

There were at least three agents “watching” the property. I received emails from agents asking me to talk with my seller and let him know he will never get the price he is asking and to consider their lowball offer. “Low-Ball” in this case was $300,000 below list/market price.

 

 Patience, Perseverance & Market Knowledge

Granted, the property had been listed at a time when the hot-hot-hot seller market started to shift. It was at a time when the stock market took its first big hit in late 2022 followed by a second big hit. Investors were sitting on the sidelines waiting for OPPORTUNITY! Some wanted to get in front of the opportunities.

The seller resided out of state. As other competing properties sold, we did take a few price reductions to stay competitive. After we took the last price reduction, it was a feeding frenzy.

The showings were non-stop.  An offer deadline was set. Let's GO! 

Multiple offers were received.

The seller accepted an offer slightly over the asking price, all cash, non-contingent, 10-day escrow. 

Bottom line, the offer the seller accepted was $300,000+ more than what others were offering.

On the same day that the seller accepted an offer in December 2022, I received an email from one of the agents who had been asking me to talk with the seller to accept a lower offer.  She and her client had been to the property four times. 

In part, the email read: “Just letting you know that my client is still interested in your listing on [street omitted] should the seller decide to accept a lower offer. It is clearly not going to sell for the asking price and prices are continuing to trend downward. Let me know if he has a change of heart.” [emphasis added]

Patience is a Solution. Could I have convinced the seller to accept a lower price? 

It never crossed my mind. The market was telling me what the right buyer would pay for the property. It just took a little more time. 

This is my third entry in the March to a Solution Challenge

 

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Probate Real Estate Services
San Jose Real Estate Website

    

DRE#01366594

I specialize in probate real estate.
As a Certified Probate
Real Estate Specialist
my focus is on helping Executors and Administrators
avoid headaches
before they start.

“From the moment we met Kathleen, we were impressed with her professionalism, knowledge, patience, respect, humor, attention to detail, and compassion.  She's the Whole Package ~ excellent agent and wonderful human being!  In a potentially stressful experience, we have felt in good hands all along.  We are so grateful and recommend her without hesitation!”

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Comments(31)

Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

Patience can bring significant reward in home sales.  One of the last sales I did before retiring, left a really bad taste in my mouth.  I was representing a seller. The buyer came in with a really low ball offer, and then apparently was in cahoots with their lender who came in with a low appraisal.  No amount of data showing the appraiser how low his evaluation was, in comparison to recent sales in the area would move him.  I advised my buyer it would likely be best to return the home to market.  However, she was under a significant time constraint, and went on with the sale.  

Mar 26, 2023 01:39 PM
Kathleen Daniels, Probate & Trust Specialist

It seems like she had to make up the gap between appraisal and offer price Myrl Jeffcoat - at least she was advised to return it to the market.

Mar 26, 2023 06:46 PM
George Souto
George Souto NMLS #65149 - Middletown, CT
Your Connecticut Mortgage Expert

Kathleen yours and the Seller's patience won out, and those low ball offers ended up with egg on their face.

Mar 26, 2023 05:14 PM
Kathleen Daniels, Probate & Trust Specialist

The seller did win George Souto

I would to see and hear the agents when they saw the closed sale price.  

 

Mar 26, 2023 06:47 PM
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Prop. Mgr, Wenatchee, WA

Congratulations! You've been Featured in the BananaTude Group.

Mar 26, 2023 05:45 PM
Kathleen Daniels, Probate & Trust Specialist

Thank you for the Feature in the Tudes, Carol Williams 

Much appreciated. 

Mar 26, 2023 06:47 PM
Buzz Mackintosh
Mackintosh REALTORS - Frederick, MD
“Experience, reliable, leadership”

I have had many agents say the same thing " you will never get that price! " and a short time later they are proved to be wrong. Sometimes it take a little longer, and if you have the comps to support the price those agents will have egg on their face !

Mar 26, 2023 06:23 PM
Kathleen Daniels, Probate & Trust Specialist

Time was what it took. Get the sharks out of the waters and wait for the buyer with the vision and the need for that kind of property Buzz Mackintosh paid off. 

Those agents, oh how I would love to hear and see their reactions when they saw the final sale price! 

Mar 26, 2023 06:49 PM
Patricia Feager, ABR,CRS,GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Kathleen Daniels, Probate & Trust Specialist - Congratulations on your FEATURE!

Mar 26, 2023 07:36 PM
Kathleen Daniels, Probate & Trust Specialist

Thank you Patricia Feager, MBA, CRS, GRI,MRP 

 

Mar 27, 2023 07:29 AM
Ray Henson
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA
Realtor

Way to go staying patient and helping your seller get a  good sales price.  It can be tough during a shifting market, but it does pay to wait for the right offer.  Well done! ! !

Mar 27, 2023 07:00 AM
Kathleen Daniels, Probate & Trust Specialist

Thank you, Ray Henson - this business is comprised of science (data), art (marketing), and luck. In this case, luck was patience. 

Mar 27, 2023 07:31 AM
Roy Kelley
Retired - Gaithersburg, MD

Thank you very much for sharing this story.

Have an outstanding spring. The cherry blossoms are in full bloom in our area.

Mar 27, 2023 08:52 AM
Kathleen Daniels, Probate & Trust Specialist

Thank you, Roy Kelley 

May you, and Dolores enjoy an outstanding spring as well. 

Mar 27, 2023 08:56 AM
Anna "Banana" Kruchten
HomeSmart Real Estate - Phoenix, AZ
602-380-4886

Kathleen I've always found it interesting when other agents tell my I've overpriced a property.  Really?!!  It's exactly where it should be based on the comps and my knowledge of the area and current market. You played this one perfectly - as I knew you would each and every time. You know exactly what you're doing and why.  Bravo!

Mar 27, 2023 12:37 PM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

Thank you, Miss Anna Banana Kruchten Phoenix Broker 

Mar 27, 2023 01:22 PM
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Kathleen Daniels, Probate & Trust Specialist, Real estate requires more patience than patients in medicine.

Mar 27, 2023 06:49 PM
Kathleen Daniels, Probate & Trust Specialist

I believe you are right about that Miss Margaret Rome Baltimore 410-530-2400 - yet I do not have the experience in medicine as you do. 

Mar 27, 2023 06:55 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good evening Kathleen,

So glad to see your post featured! Well deserved! I commented before the feature and was glad to see they chose yours!

Mar 30, 2023 05:44 PM
Kathleen Daniels, Probate & Trust Specialist

Thank you, Miss Dorie Dillard Austin TX 

Mar 31, 2023 07:06 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Kathleen Daniels, Probate & Trust Specialist  Sometimes you just want to scream "What don't you understand "  So glad you received a much better offer 

Apr 01, 2023 04:09 PM
Kathleen Daniels, Probate & Trust Specialist

It would have been a really good "deal for their client Miss Hannah Williams had they been able to sell me and my client up the river! 

Thank you for stopping by.

Apr 02, 2023 10:38 AM
Joseph Domino 480-390-6011
HomeSmart - Scottsdale, AZ
Real Estate Made Easy

Excellent work. Your story proves that understanding the market is far more important than wishing it were different. There will always be bargain hunters and serious buyers. Waiting for the serious buyer takes patience

Apr 02, 2023 06:38 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Kathleen Daniels, Probate & Trust Specialist  just wanted to stop in and wish you a very Happy Easter if we do not connect, Endre

Apr 08, 2023 07:50 PM
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co Notary Services retired RE Broker

What a great show of patience on both your and your sellers part Kathleen Daniels, Probate & Trust Specialist . When you know your market you can wait out the nay-sayers.

Apr 11, 2023 10:55 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Hope all is well Kathleen Daniels, Probate & Trust Estate Specialist  are you having writers block or just very busy?:)))Endre

Apr 27, 2023 10:14 PM
Kathleen Daniels, Probate & Trust Specialist

Hello Endre Barath, Jr. no writer's block for me.  I am busy with this and that and a few other things. 

I will call you soon.  I do not want too much time to pass before we catch up again. 

Apr 28, 2023 07:50 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Kathleen Daniels, Probate & Trust Estate Specialist  it was great catching up, now you need to make time for a blog post your loyal fans are waiting for it, Endre

May 20, 2023 09:38 PM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

Hello Endre Barath, Jr. - it is always a pleasure catching up with you.  We can talk about anything and everything. 

I've been busy working on a website project from Hell-O.  I had hoped to be done by the end of this month however at this point, that does not look feasible. 

Thank you for stopping by. 

May 21, 2023 07:06 AM
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

Your patience and your professionalism won the day for your client. I am sure your client was very pleased.

May 31, 2023 01:43 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Kathleen Daniels, Probate & Trust Estate Specialist  we are looking forward to your next post, Endre

May 31, 2023 10:07 PM