Buyer Management in this Hot Market (LA 1704)
Buyer Management in this Hot Market (LA 1704)
Transcript:
Steven Jack Butala:
Steve and Jill here.
Jill K DeWit:
Hello.
Steven Jack Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill K DeWit:
I’m Jill DeWitt broadcasting from the valley of the sun.
Steven Jack Butala:
Today, Jill and I talk about buyer management and this super hot market we’re all experiencing.
Jill K DeWit:
Isn’t it great.
Steven Jack Butala:
Yeah. Greatest real estate market I’ve ever seen my entire life.
Jill K DeWit:
Who was I talking to? I can’t remember who I was talking to the other day, but I was just like we all need to take a step back and just think about what’s going on right now and how great this is. I was going to say this at the end, but lately the longer I have a property in inventory, the more the price goes up and I’m watching this too.
Jill K DeWit:
There’s a property behind us. It’s a spec home, and every six months they raise it $500,000. Instead of lowering it, they’re raising it.
Jill K DeWit:
We’ve done that. We’ve had some properties that we priced a while back and then an offer comes in. And we countered it. Not only our full asking price but we went, “You know what, we actually priced it too low.” So we countered with something else. And they’re like, “What?” And they walk, and that’s fine. They’re like, “You know what, we’re going to reset this with the agent.” [inaudible 00:01:19] like, “All right.” We’re like, “This [inaudible 00:01:21] right now that we doubled.” That’s the price it commands. We’ll talk about it more, don’t be too fast here.
Steven Jack Butala:
When I was in public accounting in the late ’90s at KPMG, I was working under a partner and our specialization was healthcare. But there were other partners that were in the same office building and their specialization was Y2K readiness. We all thought that computers are going to go haywire and all of that. Those guys retired and the amount of consulting that they delivered between 1997 and 2000 to get huge systems ready. We’re in a situation now where if you wanted to, you can.
Jill K DeWit:
You go nuts in retire.
Steven Jack Butala:
A return of $20 million a year for the next few years can just be done. Or whatever your magic numbers.
Jill K DeWit:
Yeah you don’t need that much.
Steven Jack Butala:
Before we get into it, let’s take a question posted by one of our members on the landinvestors.com online community, it’s free. Don’t forget to subscribe on the Land Academy YouTube channel, comment on the shows you like.
Jill K DeWit:
Where would you retire with those numbers by the way? If you want to retire in Paris, then you need that money. If you want to retire in Mexico like we are talking about, you don’t need nearly that much money.
Steven Jack Butala:
[inaudible 00:02:41] retire in Mexico at our age, honestly if you wanted to on a million bucks.
Jill K DeWit:
Exactly. And have a great life.
Steven Jack Butala:
Sure.
Jill K DeWit:
Yep. Austin wrote, “Just listed a property on the MLS on Friday with my broker, buying for $13,500 and selling for $38,000. I have two parcels in title right now, will probably be three next week. Land wheel turns.”
Steven Jack Butala:
Austin is… he was reporting that in the subsection on Discord of Success. Success stories and he’s also in our career path right now.
Jill K DeWit:
He’s working him through the system.
Steven Jack Butala:
Yep.
Jill K DeWit:
And the great thing is with that a broker, the broker’s doing the work and Austin can focus on getting more of them. That’s perfect.
Steven Jack Butala:
Today’s topic, ” How do you manage your buyer in this market of total hotness.” This is why you’re listening.
Jill K DeWit:
I’m going to say once… I don’t know if it’s once a week, but a few times a month, I get a call because whether it’s a deal funding or whether it’s a deal that we have. But the message gets to me like this, “Hi Jill, X broker thinks that we’ve got a guy on the line.” A buyer on the line here. “If we do X, Y, Z.” Fill in the blank, which usually revolves around somehow lowering our standards or lowering what we’re asking for a property, “we can sell us and get this done.” To which I say, “Nope.”
Steven Jack Butala:
Excellent Jill.
Jill K DeWit:
Thank you. Why am I going to change my standards for this whole thing? That’s ridiculous. This is such an awesome hot time to be in our business and be the keeper of all the property. Last time I checked, those of you listening and those of you in Land Academy, know how to find these assets and buy them inexpensively. Now your job is to sell them the right way. And not roll over or do whatever some agent tells you or somebody else is telling you, you should do. That’s not true. you have something that these buyers want. I want to remind you, you are calling the shots here. And last time I checked, you know like, “Well, what do you want to sell it for?” “The price it’s listed.” I don’t know why this is so difficult for people.
Jill K DeWit:
“How much is the property?” “What does the listing say?” And then if they don’t like that, throw me something and give me some reason why. If you throw at me, here’s the deal. I know you got it listed for $95,000. I have $88,000 to my name all cash ready to go. I will give you, I will waive all the contingencies and I will do this too because I want it that bad. I will entertain that. But if you just throw out to me like, “Eh, let’s see, you got listed for $95. How about we say $50?” And then it gets to me from a broker. Well, are you kidding me? Number one, I don’t want to sell it that cheap and number two your commission just got cut in half. Why are you even doing this other than you just want to move on and do more. Which yes, I understand that too but, we don’t have to do that right now. This is not the market that we’re in, this is a really hot market.
Jill K DeWit:
I want you to not be talked into a deal by a broker. I want to remind you, the asset is yours not theirs. You know what it’s worth and they work for you. Their job is to do what you say and the right agent will exactly do that, what you say and the right agent will even get creative with you. I’ll pause here and tell you this story why this was coming up. I have a property in Idaho for sale that we actually bought for personal use. We thought we were going to go up to Idaho. It has a falling down mobile on it. It’s got the infrastructure there. There’s a well, there’s all this stuff it’s four of five acres. I can’t remember, and it’s a great property. It’s right on a road, it’s beautiful. I’m like, “This could be a retirement thing.” Then after five minutes we said, “Who are we kidding?” It snows there. That’s what happened. Here we are by the way, this is February. It’s probably snowing the ground right now.
Steven Jack Butala:
Oh, sure.
Jill K DeWit:
Right? I didn’t think is going to happen. Here comes buyer number two. The buyer number one was way too low like I mentioned. I said, “We pass on that deal.” We countered higher and then we doubled what we’re asking, because that’s really what it’s worth. Follow the story with me because this is what happens. I think we’ve marketed it $45 because we bought it for $25. [crosstalk 00:07:40]
Steven Jack Butala:
It’s buy for $25, it’s listed for $165.
Jill K DeWit:
Well, hold on a moment. Originally marketed it between $40 and $50 and someone came along and they wanted to pay for it. And were like,” you know what, that’s too low.” And he said, “We’re counting at 65.” I said, “You’re right.” We counted at 65 he walked, which is great. Wasn’t the right person. Now we have it marketed at $165. Well here comes an offer at $120. We’re Like, what? That’s not right. I’m going back with this agent and this is the right agent. They’re like “Jill, you told me to present all offers.” I did. You were doing your job Right. Here’s what we’re going to do. I am coming, I’m getting them closer to my… I mean, I don’t need to have $165 in stone but $128 cutting it. I know it’s worth way more than that.
Jill K DeWit:
Especially with everything going on and this agent is really doing what I said. I said, we’re going to counter it. I also want, since they have these… I think it’s someone that they have, it’s either their mindset or they have a new agent. I do know the agent they’re working with is new. They’re asking for things you don’t normally ask for. I’m like “look, if you want to have these extra contingencies, that’s fine, but I need to keep it open to accept other offers. Because if I get a good offer in the meantime that doesn’t have all these contingencies, I’m going to take it. You need to know that.” just so you know listener, you can do that stuff. Even with… They have a form they go, oh, that’s just [inaudible 00:09:03] form. We’re just going to attach it here.
Jill K DeWit:
That we have the right to continue to market and accept other offers. I said,” yep that’s what we’re going to do.” I will be cool about it. I’ll give my buyer if someone else comes along, we haven’t even agreed on this yet. I’m going to make a decision today. But I will be a good person to say, “all right, I got this other offer.” You’re either going to blank or get off the pot here. You know, you got 24 hours to decide because I’m going to take this. that’s just the way it goes Kind of thing. that’s the story and that’s what’s driving all this. I need you to hear this and understand you have all these options. You hold the cards and so many times too, you’d be surprised how… It used to come up on our Thursday call.
Jill K DeWit:
I haven’t heard anyone mention it lately, but you know who you are because you’ve done this. Sometimes you take an offer. You’re like oh I guess I should take this offer. One week later here comes a full cash offer, what is better terms and you’re kicking yourself like why didn’t I just wait? I knew it. I just took this offer. I knew I could have held out for more. That happens. That does happen. I want you to know and be careful of that. my last point I made earlier, I’m going to make it again Here is, in this climate the longer I’m holding these properties, the more valuable they are. So right now this is the prices people are willing to pay or this community, the few people that are getting out and getting in their trucks and looking at property in the snow pales in comparison to how many people are going to start looking in May and June where the weather’s beautiful.
Steven Jack Butala:
Online.
Jill K DeWit:
if I hold on, I’m not going to roll over. I’m going to say, you know what, we’re going to hang in there because there’s a good chance. I’m going to get asking price and more in May or June. this is a great market. You’re in charge.
Steven Jack Butala:
That’s it. Jill you… I was just going to say what Jill’s really saying is you are actually in charge of these real estate deals right on the south side and don’t get used to it because it’s not going to be this way forever, might this be this way for another 24 months? honestly we’re sending out mailers knowing fully. I’ve changed how we’re sending out mailers because I know when we buy these properties, we’re going to be in complete in charge of what we charge for them and how we sell the deal and how long it takes and all the details. these are beautiful times we’re in. They’re not going to last forever. It’s not going to crash like last time, but it will plain out as the saging in place happens and things like that. don’t put up with crap is what Jill’s saying.
Jill K DeWit:
Exactly. Happy to join us today. Five days a week you can find us here on the Land or House Academy Show.
Steven Jack Butala:
Well, tomorrow the episode is the House Academy Show and it’s called, “Has your real estate agent been around the block?” You are not alone in your real estate ambition.
Jill K DeWit:
I think it’s so cute. I was reading the newspaper today. After we wrote the topic of this podcast title, I was reading like we’ve been around the block I showed you. Like, it was a cute little ad in our little local paper and it showed three women walking down a street, a residential street, showing them walking the block and I appreciate that. That’s not exactly what we’re talking about tomorrow. Like physically walk in the block, but but there’s a place for that too. You know, there’s in residential they need to know the area that well and more thanks for tuning in. If you’re a Land Academy member, make sure that you are joining us on Discord. We [crosstalk 00:12:49] are Steve and Jill
Steven Jack Butala:
Information.
Jill K DeWit:
Inspiration.
Steven Jack Butala:
To buy undervalued property.
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