Thank you so much for checking out the Real Estate Today podcast. Right now we’re going to talk about negotiating after the pending sale.
Bob Nelson: I’m Bob Nelson, Eugene commercial real estate broker with Pacwest Real Estate Investments.
Marcia Edwards: And I’m Marcia Edwards, residential broker with Windermere Real Estate, but we’ve been talking about the typical real estate transaction. Regardless of what type of real estate you’re purchasing or selling, there’s some common threads. One of those that we want to talk about today is the negotiation. You anticipate its pending sale, that means we have a meeting of the minds. What I intend to do as a buyer meets up with what the seller would like to see and vice versa and it should proceed and close gracefully. So, you think you’re done with your negotiations.
Bob Nelson: The negotiation is never done until it’s closed. With certain individuals, it’s not even done after, before it closes, or at closing. They keep trying to negotiate afterward. As long as you’re not bringing an attorney into the game with a lawsuit, you have to listen to the situation, bottom line.
Marcia Edwards: Well the transaction is somewhat like peeling an onion. You’ve got many layers to it. Once it goes pending sale, you step towards the property, you take a closer look at that, you engage in the process of the purchase with your finance and getting it in order. In your case Bob, you’re looking at the first side of the 1031 exchange and landing this at the right time. So, all those parts are still moving and you’ve written the offer to protect yourself if things don’t go as expected, something else will happen. That’s where the negotiation could occur.
Bob Nelson: That’s right. And frequently we’ll get bloody. I mean brutal. The buyer has discovered that the roof has maybe three to five to six years left and, as long as its got three years left, most lenders say “That’s okay,” but what if they say its got six and they say “I want a brand new roof and I want you to pay for the whole thing.” And my logic is “Well, hey listen. That may not be the fair way to go,” as if there was a thing called fairness in deal. Did you expect it to be a new roof when you looked at it? No, you saw it was a used roof when you made your offer. I may pay for half of it as a seller, but I’m not paying for the whole thing.
Marcia Edwards: It is interesting. In my opinion, anecdotally, I would say that more sales are failing in residential real estate due to that second tier of negotiation in regards to repairs versus other things like appraisals are not often coming in low right now. The things that have been the hurdles historically, in the recent past anyway, it’s most amplified, most agitated at that point when I’ve got my inspections in hand, I may have over paid, seller feels they may have been underpaid and it’s why I’m very tight. So, that’s the time to pay attention. I’m Marcia Edwards, Windermere Real Estate.
Bob Nelson: And I’m Bob Nelson, Eugene commercial real estate investment broker with Pacwest Real Estate Investments.