Sunday, March 9, 2008

But...But...But...or "How a Deal is Made"

I put an offer in on a property in a downward trending market today. I included my comps showing that the price that we offered is fair. It wasn't a crazy offer, it does have a basis in reality. The reality is that prices are eroding in that area, and there are a ton (a TON) of short sales and bank owned properties lingering on the market. Prices are going to continue to erode until we get rid of this inventory. The Seller was only willing to come down a bit off the asking price. My Buyer wasn't willing to go up more than a smidge because our guts are telling us we can pick something up in the next couple months at his target price.

The other agent was great. He told me what the Seller's current bottom line was without arguing the comps with a "We have vinyl siding - this comp has asbestos! yadda, yadda, yadda..." I told him my Buyer wasn't going to move up in price without the "That house is a piece of crap! Look at the foreclosures on the market...they're going to regret it...yadda, yadda, yadda..."

And so, the deal has died. Not in a clash of ego and tears. Not in a desperate back and forth of negotiating increments of $1,000. It simply died because the Seller was willing to take X, and my Buyer was willing to pay Y, and those two lines didn't intersect at any point.

So, how is a deal made? A deal is made when a Seller is willing to take what a Buyer is willing to pay. Sometimes, this puts everyone in a "Happy Place." Sometimes the deal dies only to be resurrected another day. But, at the end of the day, it comes down to this:

A deal is made when a Seller is willing to accept what a Buyer is willing to pay.

That's it. It's really pretty simple.

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