How to Manage Seller Drama (LA 1339)
How to Manage Seller Drama (LA 1339)
Transcript:
Steven Butala:
Steve and Jill here.
Jill DeWit:
Hello.
Steven Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit:
And I’m Jill DeWit, broadcasting from sunny Southern California.
Steven Butala:
Today Jill and I talk about how to manage seller drama. And I heard that there’s a story here.
Jill DeWit:
Yeah. It just makes me giggle. When we just sat down for a minute and I looked up which topic this was, I remember the other day when I was dealing with this and it’s just comical. It’s so funny. These sellers, sometimes it’s just drama around the situation. And like trying to sell something out from under somebody, which is really funny. That’s the last place you want to be involved. And then there’s the other kind of seller drama where they just paint the story of you should love and appreciate this land the same way my grandfather did and here’s why. And I’m like, “Look, lady, I really don’t care.” It’s so funny. Anyway, we’ll talk about it more.
Steven Butala:
Before we get into it, let’s take a topic or the question posted by one of our members on the landinvestors.com online community. It’s free.
Jill DeWit:
Gary asks, I’ve never had this situation before or come up so far. One of the direct mail purchase offers was accepted, signed, and returned via mail. The seller apparently is very eager to sell. The seller began calling a couple of times a day and wanted a status report of when the purchase of his land would take place. I decided I did not wish to purchase this parcel because, not because of the seller drama.
Steven Butala:
This is seller drama.
Jill DeWit:
Kind of. But because the area was not as desirable as some other parcels and therefore the offer price was much more than I should have offered. His area was not nearly as valuable as a parcels I had based my price per acre on with my comps. I contacted the seller, made him aware that I had decided not to move forward with the purchase parcel. Now he says, if I do not purchase this parcel of land by the date written on my offer, is so funny, he will hire an attorney and sue me. I use the same offer letter been using from offers to owners template. Any thoughts about the legal circumstances and me not moving forward with a purchase and the seller threatening legal action? I now feel I need to add another clause to the offers to owners template contract for right to cancel within a period of due diligence. So darn funny. Do you want to go first?
Steven Butala:
Never in the history of ever, in all the times that Jill and I have been, let’s just call it threatened or scolded. Scolded is more accurate. That’s never come to anything. It’s never actually even come to a discussion with the lawyer because I’m sure whatever lawyer looks at that says, yeah, I mean, there’s all kinds. There’s three ways. There’s a clause in there that says we’re going to review the property and if we don’t want to buy it, we’re not going to buy it. For any reason, right up to the day of closing, I think. And everybody in this string is really vocal about that.
Jill DeWit:
Oh yeah. Stuff happens.
Steven Butala:
Don’t worry about it at all.
Jill DeWit:
And I’ve had it happen in the past, the other way around. I’ve been in escrow and ready to close and the guy changes his mind last minute. You know what? There’s nothing you can do. Am I going to go after him?
Steven Butala:
No.
Jill DeWit:
It’s fine. It’s just funny.
Steven Butala:
Today’s topic, how to manage seller drama. This is the meat of the show. I’ll tell you, we could have spent a lot of time on that question, but it’s such a simple answer. A lot of times the answers aren’t that simple. Like it’s well, yeah, if you do this over here and you’ve got to make sure this is signed over here and there’s this like six moving parts, nobody’s suing anybody over this contract.
Jill DeWit:
Exactly. It’s just so funny. I was just thinking too, could you imagine what circumstances, have you ever sold anything and you had a backstory to justify it? Like a car or a piece of furniture?
Steven Butala:
No, it’s all about the money.
Jill DeWit:
I know. So my question is, is it us? So here, before we get into this topic and what to do with it, it’s kind of funny, I’m just kind of thinking about the reasoning behind it. Is it because we’re so straight forward people? Is it because we see land as a line item, which is true and a lot of people can’t do that? Or you think it’s?
Steven Butala:
Let’s take it like a step further. What in your life, if you went to sell it, would you feel have second thoughts and get all emotional about it and really sit the buyer down and say, “I want you to treat this with the respect it deserves.” I mean, is it jewelry? Is it a classic car? There’s never really been a tear in my eye when things go out.
Jill DeWit:
Isn’t that funny. Even cars, I would think for me, it’d be like, there’s some cars that I have loved and I’ve sold and there’s cars that I, like six little green car, I couldn’t wait for it to go. I didn’t want to see it on its last day. Do you want a picture? Nope. Nope. It’s okay. Let it go. Because it was just got to be a pain in the ass because so many things were going wrong with it. But I’m trying to think of anything. You know what it is for me when I decide I’m going to sell something, I make a mental, I flip a switch in my head, like it’s not a home anymore now it’s a house, kind of thing. But when you move in, it’s a home.
Steven Butala:
Jill and I have, in our little beach community, this social group that we hang out with. And there’s a couple of people who own restaurants in the social group. So once in a while we go over there on the weekends and sip some wine and talk. And last weekend, she and I were sitting there, both of us looking at our phones, flipping through things saying, because we’re buying a bunch of trailer parks right now, mobile home parks. And I were flipping through it, look at some of the offers that are coming back, the step that’s for sale. And so a half hour into it, we’re just going back like we do.
Jill DeWit:
You and me? Was it you and me?
Steven Butala:
Yeah. On a regular Tuesday.
Jill DeWit:
Okay. Got it.
Steven Butala:
And the people that we were with, we both looked up from our phones about the, at the same time and their jaws are, these are people who are in our socioeconomic group. They’re not any strangers to buying stuff and or just, they have their own businesses, most of them and everything. And they just could not believe, this is this taps into the topic, couldn’t believe how we were talking to each other, what we were talking about.
Jill DeWit:
How casually.
Steven Butala:
And just intense. It’s not negative in any way, but it was just the intensity of which like we should really buy this mobile home park. It’s got these RV spots. We can do this, we can do this. The price is pretty good. The capitalization rate. And they were like, “What’s wrong with you guys? Do you talk like this all the time to each other? There’s something really wrong here.” So I think that that applies to this. Buy and selling 180 acres in Northern California and making a few hundred thousand bucks on it, is like drinking a glass of water. And so I don’t think that that’s the case for some people. I think it’s like a decade event for them.
Jill DeWit:
Well you have to realize that a lot of these offers, we’re hitting people that have owned properties for a long time and it’s a life event. This is a normal transaction. They’ve owned for a long time. They’ve been paying taxes. They were lovingly going to retire there or do something special with it. And now a life event happened. Maybe COVID causes a job loss or Grandpa or Dad or Mom or husband, somebody passed on and now they have to sell, kind of thing. That’s usually how it goes. So maybe that’s partially why there’s a little bit of personal feelings baked into the property. So that’s what happens.
So what do you do? So this came to me the other day, because I’ll give you the example and I’m going to tell you my three steps here. I had a woman that we’re going back and forth with and she’s a real estate person. She is a commercial real estate broker. She got our letter. She called me hopping mad of course. And then after she started talking to me, she liked me. You know what, we actually have been thinking about selling it, I like this. I like you, let’s talk. Well, this is in August. Right? And now we’re in almost October, this is September as we’re recording it.
Steven Butala:
Yeah, October.
Jill DeWit:
So, and it’s in California, there’s been fires and all kinds of things that have happened since we talked. So she finally got some stuff back to me. Here’s what’s so funny, my only question was access. She didn’t fully realize what she’s dealing with. She’s sending me all kinds of pictures and maps and things that I already have. I’m like, I don’t need any more Google shots. I got all that. It’s so funny. So she writes me and finally sends me the letter confirming from the county, the legal access. I’m like, this is what I needed. So then I wrote back and I said, look, and this is funny because now I’m like, I don’t really kind of like the property any more and I certainly do not like it at the price I originally started out at considering all that has gone on in that area. And I said, “Hey, I know your time is valuable, as well as mine. Let’s just cut to the chase.”
Steven Butala:
Excellent.
Jill DeWit:
A lot has happened. And I’m now only buying property in that area with the right price. And it’s kind of a, now I have to buy it situation. So what’s your bottom number? And that was it. So she wrote me back a book. A book. A book about her husband Tom, he’s 73 and all of this stuff, the loving care and the cabin they had built that had burned down, thank goodness they had insurance on it. I picked up on the insurance. Yay, they got some money out of the property already and all of this stuff. So I had to write back and I had to say one more time, “Hey, you know what? All I want is your bottom number.” And she said, “Let me talk to Tom.” That was kind of it. But this whole thing was supposed to make me fall in love with the property too. She knows who I am and she’s in the business as well. So what do you do in these situations?
Steven Butala:
Well hold on. What happened?
Jill DeWit:
I’m still waiting for her to write back. As far as I’m concerned, I’m walking. Because I’m pretty sure she’s not going to come back with a number that works for me. My thing is you either want to sell or you don’t. That’s really kind of it.
Steven Butala:
My question is when does that approach work?
Jill DeWit:
It works often. I’ve had several people. They said, this is my bottom number.
Steven Butala:
No, I know your approach works. When does the pull on the heartstrings? When does somebody say as a buyer? Oh gosh.
Jill DeWit:
Never. Never.
Steven Butala:
I was really only willing to pay a hundred thousand dollars for the property, but because of the circumstance that you and your husband are in, and this burned down, I feel bad for you. Some I’m going to pay 180,000 instead.
Jill DeWit:
Isn’t that funny.
Steven Butala:
Does anybody ever do that ever?
Jill DeWit:
I did not realize this fence was hand-carved and built out of your garage. Like, could you imagine? It is absolutely worth three times as much. No, it’s not. It’s just a fence. Anyway. So my tips are here, number one, pick out the details. I will entertain it. If it’s an email, I’ll scan it. If it’s on the phone, I’m giving it a few minutes. I’ll tell you the second here. Because I’m picking out the details. Like this exact situation I picked out, they already got some money out of this property. They’re not hurting. And you know what I happen to know too, because she told me the reason that she was so delayed in getting stuff back to me is because she’s selling so much property. She’s so flipping busy herself. I’m like, all right, not hurting for cash. They already got some money out of this property. I’m expecting something good or I’m walking because I know what could happen here.
Steven Butala:
Did you come to a number?
Jill DeWit:
That’s what I said. No, I’m waiting for it to come back. I am not going to throw out a number. That’s the thing. That’s not how we roll. I’m not going to hear it and negotiate. I’m not going to say, “How about this much.” She’ll say, “How about that much.” Mm-mm (negative). I want her bottom number. It’s either going to work or not.
Steven Butala:
Then you’re going to say yes or no.
Jill DeWit:
Yeah.
Steven Butala:
You’ve already written this off, I can tell.
Jill DeWit:
Yes.
Steven Butala:
You’re already like it’s not an on your acquisition list at all.
Jill DeWit:
Oh no. It’s not. I’m entertaining. Exactly. It’s kind of funny. Just throwing it out there. If she comes up with something good, I’ll entertain it. If not I don’t really care. I am not spending any more time on it after the show. This is more time than I care to spend on it. So thank you. It’s making me irritated that you’re asking me this many questions.
Steven Butala:
I can tell. That story is more interesting than the actual deal.
Jill DeWit:
Yeah. So it’s just hilarious.
Steven Butala:
I’ll leave you alone.
Jill DeWit:
My three things with seller drama is one, pick out the details. Like I just told you how to do and what I picked up out here. Number two, shut it down. Your time is valuable. If they have that much to say it’s taken from your time, it’s probably not going to work out. Who cares? And number three, which we kind of already picked out from our banter here, is don’t let any of this rule your decision. No matter how beautiful, what they tell you the view is, who got married there and how great it is and what’s possible, or who wrote a book about the back woods? That’s the stream that neighbors your property, I’ve had that too. None of that should rule your decision. And that’s my point.
Steven Butala:
I mean, the only thing that that does is take up more time during your workday where you could be doing other deals.
Jill DeWit:
That’s the point.
Steven Butala:
And it’s so meaningless and ridiculous.
Jill DeWit:
I’m not an author. If I were writing a National Geographic or some kind of a book, if I was writing a book about the history of the area, then I’m concerned, but I’m not. And it’s important because this comes up often and I know people get sucked in and your time is wasted and it’s valuable. You want to ask me more questions.
Steven Butala:
Yeah, I do. No, I don’t want to ask any more questions.
Jill DeWit:
Not about the situation.
Steven Butala:
I’m afraid to ask anymore.
Jill DeWit:
No not about that thing, but you could ask me about the whole situation.
Steven Butala:
Have you ever listened to a podcast or back in the day, our talk show or our radio show, and it’s all somebody is talking about some situation that’s going on in a current event. Any time, like 95% of the people that call in to talk about it, want to tell you their personal story. So you could be talking about something that’s going on in Washington or some bill that’s going to get passed or some major event like that, it has a lot to do with humanity and people call and say, “My sister had cancer three years ago and this.” I don’t care. Why do people bring? That’s what this is? Why do people bring in their personal story somehow to digest some current event?
Jill DeWit:
Because it’s life, that’s how they think.
Steven Butala:
It’s live?
Jill DeWit:
Life.
Steven Butala:
Oh life.
Jill DeWit:
I think, I mean, are we talking in a social situation, then that’s normal.
Steven Butala:
Well I just think that I want to buy your land and it’s worth $80,000. I don’t care about anything else. I don’t care about any personal anything. Except for something like, if there was a cabin on it, then they dealt with the sanitation and the water and utility somehow. Okay, good. I get that. Let’s just keep it right there.
Jill DeWit:
That’s what we’re doing. I understand what you’re saying. You’re talking about a seller talking about a life story.
Steven Butala:
Personal. Anything personal.
Jill DeWit:
Yeah, that’s a person that doesn’t have anybody to talk to. There’s plenty of those and that’s just your mailer hit somebody and they called you and now they’re just happy to have someone on the other end of the phone. Don’t go down that rabbit hole too because that happens. Like Gary, I think it was Gary who wrote the question, the guy calling how many times a day to bug him. That’s a lonely person. That’s it, that guy is just lonely. He’s not going to sue anybody. He just wants you to talk to. There’s a lot of that going around.
Steven Butala:
Or he needs somebody. I get it.
Jill DeWit:
Or that. I understand. And then Gary did the right thing. It’s like, sorry. And shut it down.
Steven Butala:
I bought a primary residence from, this is a lot of years ago, long before I ever met you. And from a guy that it was in Arizona and he retired and he was there and the manufacturing facility that he sold and the money that he was receiving on that sale, it didn’t work. The person who bought it failed at it. So he had to sell the house, go back to Chicago and unretire himself. And boy, did I hear about it? And I wouldn’t have bought the house. I was very young at the time. I would not have bought the house if it wasn’t a great deal, obviously. But so he had to justify it and he had to just stick it to me. He had to stick it, like make sure that I understood how this is just disrupting his life and how lucky I am. And so if that would happen today, I would-
Jill DeWit:
Did you make him feel good? Did you tell him, “Ah, I understand.”
Steven Butala:
I walked around making people feel good. No, I didn’t make him feel good.
Jill DeWit:
What’d you do? Just stand there and walk away?
Steven Butala:
No, I didn’t walk away because it was a great deal. But I said, “I’m sorry you have to go through this, but you really got to get out of my house.”
Jill DeWit:
Can you sign the papers?
Steven Butala:
Get out of my house now.
Jill DeWit:
Can you just sign this?
Steven Butala:
If that will happen today, I wouldn’t put up with it for not even half of a minute. I would say, I’ll meet you at the title company.I’m not, not going to listen to this, not even for one minute.
Jill DeWit:
That’s so funny.
Steven Butala:
So that’s the difference between you and me. Because you will turn that into a situation where now you’ve got all the furniture for free or something and I’m just not going to. Neither way is wrong. There’s a story, you should probably listen to people’s stories when it’s important.
Jill DeWit:
Happy you could join us today. Five days a week, you can find this right here on the Land Academy Show.
Steven Butala:
Tomorrow the episode on the Land Academy Show is called What Would You Do With Limitless Capital? You are not alone in your real estate ambition. Tomorrow it’s fun stuff to talk about.
Jill DeWit:
Really?
Steven Butala:
Limitless capital?
Jill DeWit:
Well, yeah. I mean, I mean, I don’t.
Steven Butala:
What’s more fun to talk about than that?
Jill DeWit:
I guess. Well, there’s other lots of things, but yeah, you’re right. I know you’re right. That’s just not my first thing that comes to mind because I guess I take it for granted. Maybe that’s why.
Steven Butala:
Yeah, because we have limitless capital.
Jill DeWit:
I know. I haven’t thought about it for a while. You’re correct. I take it for granted. For a lot of people this is a very big deal.
Steven Butala:
And most people who own companies and businesses, not just regular people, but are scrambling around constantly looking for cash because they’re underwater with cash but their asset value is okay. It’s justifying it. Seriously. I mean we never scramble around. When’s the last time you scramble around for acquisition money?
Jill DeWit:
It’s been a long time.
Steven Butala:
It’s been years.
Jill DeWit:
It has been years. I can’t remember.
Steven Butala:
Maybe we don’t spend enough. We’ll talk about it tomorrow.
Jill DeWit:
Yeah. Hey, thanks for tuning in. We hope you find our content valuable and we appreciate your support. If you haven’t already, please get on over to YouTube and hit the subscribe button on our channel.
Steven Butala:
And your comments and suggestions help us to create the type of content you’re here for. Hitting the like button helps to support our channels algorithm. Engage your interests for future shows. We’re Steve and Jill.
Jill DeWit:
We’re Steve and Jill.
Steven Butala:
Information.
Jill DeWit:
And inspiration.
Steven Butala:
To buy undervalued property.
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