I hope your week was more productive than mine.
I sent out two offers and both were rejected. 😢
The first was ~$1M for a house that's been sitting empty for 14(!) years and the other was $500K for a house that's currently listed for $530K.
I am *itching* for another deal.
Hopefully, I don't rush into a bad decision.
Livin' La Vida Luna y Luca
Luca, "Send help!"
Million Dollar Offer
Last week my mom told me there was a really ugly house by one of her friend's places.
Her friend confirmed that the house has been sitting vacant for over 10 years.
I looked up the Google Street View and the front yard is so overgrown you can't see the house.
I drove by later that same day and barely saw past the front yard.
When I got back to my desk I was determined to find the homeowner's phone number.
Usually, I use a free website called FastPeopleSearch.com, but the phone number listed was disconnected.
So I paid to skip trace the address using another service called Propstream.
Unfortunately, all of the results came back as DNC (Do Not Call).
I saw my mom again a few days later and she asked if I got in touch with the owners of the house.
I told her their phone numbers were listed as "Do Not Call" so I'll just send them a letter in the mail and hope they call me back.
Her reply was, "Just call them... Today!" *You can take the girl outta India, but you can't take the India outta the girl.*
My heart was pounding as the phone rang.
I found myself hoping no one answered.
Here's how the convo went. *I'm skipping the part where we exchange names.*
"Hi! Sorry to bother you, but are you the owner of ## Xxxxx St in Chatham, NJ?
"...Yes...well, my husband is."
"Oh great! I was just driving by the other day and noticed the house looked like it had been vacant for a while."
"It has been... My mother-in-law left it to us when she passed away back in 2008."
"Oh, I'm sorry to hear that. Do you live nearby?
**I know they don't**
"No, we live in Massachusettes. But sometimes my husband goes down there to visit the property and see some of his old friends."
"That sounds nice. Well, I don't want to waste too much more of your time. I was calling because I wanted to see if you and your husband were at all interested in selling the house."
"I know that's why you're calling. We get these calls a few times a year."
"Oh! I guess your husband isn't ready to let go of the house he grew up in?"
"Well, there's that. And usually, the people who call us just want to get the house for really cheap. We don't need to sell. The property appreciates more than it costs us per year so we aren't in a rush to sell it"
"I see. How much do you think the house is worth?"
"The house is worth nothing. It's a complete disaster. But we think the land is worth at least a million dollars."
"Oh wow... a million dollars."
"Ok. Do you mind if I take the weekend to run some numbers and then send you an offer on Monday? I don't want to upset your husband if he's not ready to sell. It seems like he's holding on to the home for sentimental value."
"You can send me the offer. I'll show it to him."
"Great! I'm really glad you answered and not your husband. I don't think I would have got nearly as far with him."
"His bark is bigger than his bite. Nice talking to you."
I should have called her from my CRM. Having a recording of our conversation would have been amazing.
Regardless, she seemed more open to the idea of selling than her husband, which is why I told her I'm glad she was the one who answered.
The conversation went really well. It almost felt like she would go to bat for me with her husband.
I spent the weekend looking at how much I could offer.
I decided my max will be $1.1M cash or $1.25M if they seller-financed the purchase.
On Monday, I opened with two offers:
- Offer 1: $850K Cash + Environmental Contingency Only.
- Offer 2: $950K Seller Financed + Environmental Contingency Only.
Both offers included a $10K earnest money deposit.
On Tuesday, I followed up via text.
After re-reading this text exchange, here's what I wish I did differently.
1) I should have picked up the phone and called her as soon as she replied on Tuesday at 1:28pm. I could have gotten more clarity on what she meant by "timing". In the moment, I assumed it meant he wasn't ready to sell. But now I think it could have meant my 60-day closing window was too long.
2) I'm simpin' hard. I am trying to balance being respectful of the sentimental value, while also being aggressive enough to close the sale, but I somehow managed to do neither. I feel like the approach I took came off as desperate.
3) I set a stupid expectation. There's no way I can wait until Winter to follow up. Ugh. I should have said next month. It's going to take every ounce of patience I have to not text her this week. Screwed that up.
I set a calendar reminder to follow up exactly 4 weeks after I made the first offer.
Next time, I'm going to call and verbally offer her the original asking price of $1M. I'll also try to handle her objections over the phone.
I need to get clear on what "terms and timing" they didn't like in my original offer and simply adjust to their satisfaction.
Yes. $1M for land. Sounds crazy, but check out the comps.
The model here is pretty clear.
Developers are buying for ~$1M and selling for $2.5M+.
The average size of these homes is 5,000 square feet. If I assume a build cost of $175 per foot (conservative), that's $875K in build cost. Let's round up and call it a million with carrying costs.
There's currently a 7,000 square foot comp for sale nearby for $4.15M.
Someone bought it last year for $1.1M and it sits on a smaller lot than the property I'm trying to buy. 🤯
I. Want. This.