I have recently been working with some clients who are very agressive on making offers. One problem came up though when the due diligence was done, there were more repairs than what was originally estimated. They re-negotiated the price, and got a concession from the bank. However, they went back for a third re-negotiation, and eventually lost the deal.
At this stage, there are two main options, continue with the deal or don't. If you choose to get out, that's fine. But if you want to stay in, this is a great time to re-negotiate your contract.
However, there is too much of a good thing, and if you push too far, you risk losing the deal. In the transaction we were looking at, the contract was for a good price. The lender offered concessions to cover the all of the costs of the new found renovations. Any new negotiations at that point are strictly for more profit.
In this case, the deal was lost. And that's ok. It never hurts to be agressive and to figure out the bounds of what can be done. It never hurts to go after that spectacular deal where you make a killing.
You as an investor need to take a close look at yourself however, and find out how much profit is acceptable to you, and try not to negotiate too far under that number. You need to assess how much you need this particular deal. If you need to make some money, as was the case I was referring to above, it would be a good time to take a reasonable profit, and leave the aggressive negotiations to a later time when they had more flexibility to possibly lose a deal.
Either way, there is no right or wrong answer. There is just the facts that each seller will tolerate different amounts of re-negotiation. It never hurts to try. You just have to realize the sellers also have the right at any time in the negotiations to pull the rug out from under you and cancel the deal. Be prepared for that, and negotiate away!!!
I have recently been working with some clients who are very agressive on making offers. One problem came up though when the due diligence was done, there were more repairs than what was originally estimated. They re-negotiated the price, and got a concession from the bank. However, they went back for a third re-negotiation, and eventually lost the deal.
At this stage, there are two main options, continue with the deal or don't. If you choose to get out, that's fine. But if you want to stay in, this is a great time to re-negotiate your contract.
However, there is too much of a good thing, and if you push too far, you risk losing the deal. In the transaction we were looking at, the contract was for a good price. The lender offered concessions to cover the all of the costs of the new found renovations. Any new negotiations at that point are strictly for more profit.
In this case, the deal was lost. And that's ok. It never hurts to be agressive and to figure out the bounds of what can be done. It never hurts to go after that spectacular deal where you make a killing.
You as an investor need to take a close look at yourself however, and find out how much profit is acceptable to you, and try not to negotiate too far under that number. You need to assess how much you need this particular deal. If you need to make some money, as was the case I was referring to above, it would be a good time to take a reasonable profit, and leave the aggressive negotiations to a later time when they had more flexibility to possibly lose a deal.
Either way, there is no right or wrong answer. There is just the facts that each seller will tolerate different amounts of re-negotiation. It never hurts to try. You just have to realize the sellers also have the right at any time in the negotiations to pull the rug out from under you and cancel the deal. Be prepared for that, and negotiate away!!!