Why Not to Accept a Low Ball Offer Too Soon (LA 1744)
Why Not to Accept a Low Ball Offer Too Soon (LA 1744)
Transcript:
Steven Jack Butala:
Steve and Jill here.
Jill K DeWit:
Hi.
Steven Jack Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill K DeWit:
And I’m Jill DeWit, broadcasting from the valley of the sun.
Steven Jack Butala:
Today, Jill and I talk about why not to accept a low ball offer too soon when you’re selling your property. Boy, if I had a nickel. This whole business, or this whole episode, came from during this uptick in pricing and hot market hotness that we’re all experiencing right now, Jill and I sold a bunch of properties too low and too fast. And so we’re going to talk about a little bit about that and how to gauge where you should price your property these days versus, let’s say, maybe, a couple years ago.
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. And I hope you know that we have a full blown operational commercial printing company called Offers2Owners.com. Jill and I set out a lot of years ago to rectify poor perform in the industry. We set up our own company and a few years ago, we set that up for you. You can either call (800) 725-8816 or you can email support@offers2owners.com and see what they have to offer if you’re sending out blind offers to real estate owners.
Jill K DeWit:
Just like we do. All right, here’s our question. Greg wrote, “Hey, do you guys ever use a non broker/agent for boots on the ground in your due diligence phase? I’ve got a timber guy that hit me up from an area mail who wants to be my boots on the ground. We’re on the same page but I’m trying to see how we can come up with a contract test agreement for compensation, make sure I don’t get cut out of the deals I have him look at. I appreciate any suggestions if y’all have any experience with this.” Oh, that does worry me a little bit.
Steven Jack Butala:
I have real bad taste in my mouth about this whole thing.
Jill K DeWit:
Yeah.
Steven Jack Butala:
What this person’s asking is, I sent a mailer out to a bunch of owners and I’m getting responses back. And we’re doing the Land Academy thing. Timber guy called me back, probably because he got one of your letters, or he is talking to a landowner and said, “Hey, how about I just go bird dog these properties for you? And the ones that we buy together, you pay me?” What he’s really saying is how about you shove me the great deals that you got and I can steal them from you?
Jill K DeWit:
Yeah.
Steven Jack Butala:
That’s what I think.
Jill K DeWit:
Yeah. I wouldn’t do this.
Steven Jack Butala:
The boots on the ground that we’ve had with great success are we have a personal former relationship with them.
Jill K DeWit:
Or they’re Land Academy people.
Steven Jack Butala:
Or they’re Land Academy members. And that’s what I was going to say. Find a Land Academy. Often, very, very often on a Thursday call, when we look at people’s deals to give them our opinion about whether or not they should buy them, there’s other people in the group that’ll chime in and say…
Jill K DeWit:
“I’m right by there.”
Steven Jack Butala:
“I live 20 minutes from there. I’m happy to go take a look at it for you.”
Jill K DeWit:
Right.
Steven Jack Butala:
That’s what [crosstalk 00:02:52]-
Jill K DeWit:
Yeah. I’m sorry. I got some red flags.
Steven Jack Butala:
Me too.
Jill K DeWit:
I wouldn’t do that.
Steven Jack Butala:
Today’s topic, Jill’s going to talk about why not to accept low ball offers too soon. This is why you’re listening.
Jill K DeWit:
We haven’t had this in a while. When I say while, I mean, weeks. It hasn’t been that long, but it pops up every now and then that someone says, “Shucks, I wish I wouldn’t have taken that offer. They came in so fast. I was so excited. It sounded great. Hey, I doubled my money, even though it wasn’t what I listed it for. It was a good offer, so I took it. And then two days later, here comes Mr. Full Price Cash Man. Shucks.” And that’s the point here. That happens sometimes. I want you to know, especially in today’s environment, it’s still kind of happening where I have my properties, the longer I hold them, the more they’re worth a little bit. I’m not afraid to hold on them for 30, 60, 90, three months, four months, five months because the prices are going up, especially right now.
Jill K DeWit:
I’m coming into the springtime in the summer. I’ve got some properties that didn’t sell in January. No kidding, they were under snow. I didn’t really expect it to be flying off the shelves. And I’m glad I didn’t take those offers in January just because I was desperate. I’m glad now it’s getting to be springtime and especially with the housing market interest rates, there might be more people that are saying, “You know what? I’m going to plop down some cash for the land I can afford. And, baby, we’re going to build our own house and take our time doing it and make it great.” Because those are my buyers. It’s still happening. I want you to not worry. I want you to hang in there a little bit and I especially… I have two points. That’s point one. My point number two is, don’t get desperate and reduce your offer price as your first means of trying to move a property. Before you do that, look at the property. Are the pictures great? Is it properly conveyed what’s going on?
Steven Jack Butala:
Can you see what’s possible?
Jill K DeWit:
Yeah. Does your description need some work? Is it not being reached to the right people? Like I mentioned yesterday, I had an agent that… And this is by the way. This property, it’s an amazing Idaho property that we have that I will not let this go until I get the right place from the right person. I have had several offers that we did not accept. We just renewed our six month contract with this girl for another six months. And I just now, this can happen, I just now realize, “Oh my goodness.” She did not have the address in there right so it was triggering… It wasn’t populating in the right area and not showing up in some of the right feeds. I fixed it with her.
Jill K DeWit:
I don’t care. I paid cash for it. It’s a great property in Idaho. I want to more than quadruple my money on it. And the longer this goes right now. It’s April. It’s going to be May… June is when someone’s going to want to come in and go, “That’s amazing.” And I’m going to get a great price for it. I’m not worried about it. I want you to look at those things first before you lower price.
Steven Jack Butala:
I have a couple points to make. When you buy a piece of property, here’s the old way. People buy a piece of property, and if they don’t have a lot of real estate experience or they watched their parents buy and sell a house, or they had grew up in my age and they’ve had some real estate experience in an office where the old way is to say, “We bought this piece of property. We control it. We’re going to post it somewhere with a broker or an agent for as much as we possibly can. We’re going to suck every single penny out of that deal, knowing full well it’s going to take a while to sell it and wait for prince charming to come along and plop the money down and buy it.”
Steven Jack Butala:
That’s silly. That’s not the Land Academy way and it’s not modern in any way. When you buy a piece of property, we always buy property well, and we buy really good property and we buy it for a very inexpensive amount. Then we have a job. We sit down and we say, and this is what do I do mentally, I know I can double or triple my money on this really quickly. I know that because two real estate agents, good real estate agents, in the area are telling me that my and my partner agrees with me and we all want to get a deal done on this property quickly.
Steven Jack Butala:
Or I can say, “This isn’t one of those deals.” We bought it right. It’s out there, all the fixed, the non-variable things that go on in a real estate deal, it’s all there. Great property, really cheap, everything around it’s selling for $150,000. I’m going to try to sell for 150, even if it takes some time and I’m going to deal with that mentally before I even list it and with my partner so we’re on that same page. Jill and I really utilize the velocity of money on a lot of properties for that bucket one property that I just described.
Steven Jack Butala:
For the second one, but I call it bucket two, we’ve got property out there that’s been for sale for a while, like this Idaho property she just talked about. And we’re totally okay with that, because we know what it’s worth. Here’s my second point. It’s a little off topic. To finish that first point, you got to decide what you want and then deal with it. And then maybe you might have to reduce the price a little bit after quite some time.
Jill K DeWit:
As the last resort.
Steven Jack Butala:
But I’ll tell you what.
Jill K DeWit:
Yeah.
Steven Jack Butala:
Not often enough do people in Land Academy, and sometimes us, just don’t accept doubling and tripling our monies enough. We have to undo this on on a high volume land business like Jill and I have.
Jill K DeWit:
Right.
Steven Jack Butala:
Yep. The property’s worth 150 grand. We just sold it for 90 in three days. We left a bunch of money on the table. We bought it for 20. We sold it for 90. We shake hands on it. We left 50 or $60,000 on the table. We’re onto the next deal.
Jill K DeWit:
That’s a personal decision.
Steven Jack Butala:
Yep.
Jill K DeWit:
It really is. Maybe that should be the new topic of this show. You have options.
Steven Jack Butala:
Well, you control the deal.
Jill K DeWit:
You do.
Steven Jack Butala:
This is why we buy it, not option it or any of that other silly business that goes on. That’s going to be a fad for sure.
Jill K DeWit:
You know what? And I’m sure some people are like, “You guys are a bunch of whatever, I take the first offer all the time. I make sure I at least double my money and move on.” And we used to do that.
Steven Jack Butala:
I think that’s a great model.
Jill K DeWit:
We used to do that. But we’re talking about it could be a low ball offer, because you know what’s interesting? A low ball offer could be only doubling your money and that’s kind of funny. Then there’s a whole nother discussion there. We’re not going to get into it right now.
Steven Jack Butala:
Right.
Jill K DeWit:
But I just want to let you know what’s possible and the things you could do and consider before you grab that offer.
Steven Jack Butala:
My final point is this and it falls under people make mistakes. People make honest mistakes at times. And so as a business owner, an employer, a business partner and a parent, and a seller sometimes, and a buyer sometimes and all of those things… There’s a lot of opportunities for mistakes and honest mistakes.
Jill K DeWit:
Same.
Steven Jack Butala:
I get it. But I’ll tell you what’s not an okay mistake. An experienced seasoned real estate agent posting the wrong freaking address on a property and for that reason, my property’s been on the market for a year.
Jill K DeWit:
Yeah.
Steven Jack Butala:
And so that’s the time when heads need to roll, where you have to decide what that is as a father, parent business partner, employer. There’s a line where you’re just a dumb ass and it’s your fault, not mine. And now I’m taking stuff away from you.
Jill K DeWit:
Thank you, Jack, for taking this show into a totally different direction and I don’t know… I’m glad you got that off your chest.
Steven Jack Butala:
Your dumb ass-ness cost me $100,000 and I don’t care if it was a-
Jill K DeWit:
But you can’t get it back. I know. Move on. It’s okay. I hear you and I understand. Just like a marriage, your dumb ass-ness cost me a $100,000.
Steven Jack Butala:
Just trying to smooth it over. This is in real life. This is what happens. I say stuff like this. She’s like, “No, no, it’s fine. Put him over there in a corner and…”
Jill K DeWit:
I’ll work with him.
Steven Jack Butala:
Turn some light, nice music on and-
Jill K DeWit:
I’ll work with them.
Steven Jack Butala:
He’ll be fine in a half hour.
Jill K DeWit:
I’ll get him there. Oh boy, happy you could join us today. I’m going to cut this off. Five days a week you can put find us here on the Land Academy Show.
Steven Jack Butala:
Tomorrow the episode on the Land Academy Show is an interview with Luke Smith, a long, long time Land Academy member. And it’s actually pretty amazing
Jill K DeWit:
And it’s not our first interview with Luke. It’s probably our fourth. I don’t know.
Steven Jack Butala:
Probably, at least. We talked about it on the show when we recorded it. He was member number four.
Jill K DeWit:
I don’t remember. But I do remember when he checked out. I remember being at Randy’s coffee shop with that promo with those whatever…
Steven Jack Butala:
It was a 10 acre Nevada properties.
Jill K DeWit:
That’s it.
Steven Jack Butala:
He told that whole story on the interview.
Jill K DeWit:
Oh good.
Steven Jack Butala:
The whole story, from start to finish.
Jill K DeWit:
Oh, that’s really good. That was cool. Thanks for tuning in. Jack and I are very aware that not everyone has 100 grand lying around, by the way, to buy land. Just so you know, we fund many Land Academy members deals every week. And where do you find out more? Go to landfunding.com or go to landinvestors.com and look for the tab that says deal funding. You can also sent a note to my team at support@landacademy.com. We are Jack and Jill.
Steven Jack Butala:
We are Jack and Jill. Information-
Jill K DeWit:
And inspiration.
Steven Jack Butala:
To buy undervalued property.
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