Hey there, so in my last email, I talked about why many investors freak out about not being able to sell the house that they have under contract and what to do about it.
Usually, it’s not selling for 2 reasons:
- It’s overpriced.
- You’re not getting the deal in front of the right buyers.
Now, I want to take that a step further…
As I mentioned in that email, one of the solutions is to go back to the seller and renegotiate the contract.
Whoa, I think I just heard a collective gasp…
You’re probably freaking out even more thinking, “Oh no!” It was hard enough coming to an agreement with the seller the first time—and now it has to be done all over again. Agony!”
As I said before, take another deep breath…
If you’re having trouble selling the deal, if you can’t find a buyer—renegotiating is a solution.
It’s just a business decision.
And think of it this way, renegotiating is better than cancelling the contract altogether. You and the seller both lose if that happens. 🙁
So, you should have a 2-week contingency in the contract for an inspection period—if you can’t find a buyer within those 2 weeks, you can go back to the seller to try to rework the contract.
Sure, maybe it’s a little embarrassing to go back to the seller, but do whatcha gotta do.
Try this tactic… I’ve done it and it works great!
You just need to use the 3 Rs to renegotiate:
You’ll go to the seller and say something like:
“Mr. Seller, when we evaluate a deal to decide if we can buy it or not, we look at 3 different things: 1. how much monthly rent it can bring in based on similar homes in the area; 2. what it would take to repair the property to get it fixed up; and 3. what the resale value would be. In re-evaluating your property, the numbers just aren’t working. I’m sorry, but we need to either renegotiate a lower price or I’ll have to cancel the contract and walk away. I’m sorry, but that’s just what the numbers show.”
So, do you see how I’m blaming the issue on the numbers?
Using the numbers makes your reasoning sound more fair and intelligent—and less subjective.
I mean, the seller can’t really argue with numbers. Numbers are logical. They are what they are…
Perhaps you simply underestimated the repair values and the resale value. Blame it on the math.
Now, the seller probably isn’t going to like you coming back to them, but they usually understand when you present the issue this way—with the 3 Rs.
Look, you’re going to make mistakes in this business, including evaluating a deal incorrectly or not being able to find a buyer… but you can definitely learn from ALL of them.
If you can’t sell the contract and the numbers aren’t working—use those numbers as your bargaining chip when you renegotiate with the seller.
Oftentime, they’ll say yes. And everyone still wins.