T&T: Buying under asking price.

[LRZeitlin at aol.com]

In a message dated 2/1/08 12:03:15 AM, Mike writes:


> Sellers rarely take the best offer they get. Generally they turn down
> the first, best offer, wait several years and then take a much lower offer.
> 
> 
Good advice. A friend of mine, an avid yachtsman and a very successful real 
estate dealer made his considerable fortune by waiting sellers out. The 
nonnegotiable purchase price that many sellers offer is based in part on an estimate 
(often faulty) of the value of the property and their personal ego and 
emotional investment in the sale. It takes the passage of time for them to realize 
that carrying costs of the property, whether boat or house, erode the profit 
they might realize on the sale. Taxes, maintenance, yard costs, and inflation can 
amount to 5 to 10% or more of the property value per year. In a down market, 
the property won't sell quickly, if at all, at the asking price.

His strategy - make a firm offer at 20% to 25% under the asking price. Say 
that it is good for some reasonable period of time, 6 months or so depending on 
the market. Then wait. More times than not the seller will call up near the 
end of the offer period to sell the house or boat. No haggling required.

Larry Z



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