Today we’re looking at the art of negotiating real estate.
Bob Nelson, Eugene real estate investment broker
Marcia Edwards, Eugene residential real estate broker
Marcia Edwards: Let’s talk a little bit about negotiation from a seller seat. We are in a sellers market. We’ve got a lot of opportunities of buyers coming towards you. How do you manage that, Bob? When you have just got a property on the market and it’s hitting with a lot of activity. How do you communicate to those buyers who say, “We want to write an offer today?”
Bob Nelson: Well, it’s an interesting process. If you don’t do it today, you don’t have to worry about it because there’s not going to be there tomorrow most likely. It is interesting. First of all, I have to put myself in a position where I will hear information more rapidly and more accurately than any other person in the market, brokers and potential buyers and that’s part of the process.
Once I’ve done that to be able to evaluate it quickly, I have several gauges of does this make sense? What’s the cap rate? Are we dealing with a pro forma net operating income? which is next year’s income and some portion of last year’s expenses. I don’t look at pro forma much at all, which actually happened last year. That’s my big concern.
Marcia Edwards: So in looking at that from the lens of a buyer’s agent, clearly you want to make sure it makes sense. When you’re looking at it from the sellers, you’re representing the sellers in the circumstance. You have more than one opportunity coming towards you. Do you reset a deadline? How do you manage that in investment real estate?
Bob Nelson: And it’s interesting, you do have to take offers as they come in. I’m not obligated to take the first one and beat that one to death until it doesn’t work. And before I go to the second one, I have the opportunity to deal with whatever is in front of me at all times.
In fact, if I don’t, I’m compromising my agency position to my client. They need to know exactly what’s happening real-time and so forth. And also my anticipation, how active is this thing going to be? Should we move immediately? Should we wait until tomorrow to see what else happens? On occasion, waiting till tomorrow causes the good offer to go away. I don’t want that either.
Marcia Edwards: So all right, we’ve got to respect the role of the buyer. They’re coming forward with an opportunity for you and you’ve got to respect all the opportunities and then bring them to the fruition in a process that is equitable to your gain at the end.
So what you’re looking at in the process of multiple offers coming at you is you want to make sure it’s not a price game, it’s not a hunch. You want to make sure you know the ability of the buyer to actually perform on the promises they’re making. So you don’t want to do this alone. You want to make sure you have a broker next to you to make it right.
Join Eugene, Oregon, real estate experts: Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments, and Marcia Edwards, Residential Real Estate Broker with Windermere Real Estate, daily at 5:30pm on KPNW for the “Real Estate Today” radio show.