Gateway Village Denver, cO

As you know we just listed this spectacularly remodeled home for $169,900 on Monday.  Today is Wednesday.  This speaks to just how prompt you are as a buyer’s agent.  Thank you also for excitedly calling me from the property to let me know you were putting together an offer and that you will need a response this evening.  Needless to say, this marked a bit of a high point for my day.

Thanks for sending the 40MB scanned offer directly to my email in separate pieces.  In the email,  I could not help but notice the long list of letters following your name.  You are certified as a specialist in residential property and since you passed the $225 dollar class, you are now an expert negotiator, congratulations.

Unfortunately,  it appears your offer is going to fall a little short.  Let me explain.   Prior to listing, I spent quite a bit of time with my client determining exactly where the property fell with regard to the competition.  That is no doubt why you, who have been feverishly trying to find a property for your buyer, noticed that my listing was the best property available in the area that falls in the price range that your client is looking at.

Thanks for making me aware of the sold comps as well.  You must think that I had not considered them when arriving at the list price but I actually have.  You see, just because one floor plan sells for a price does not mean that is the absolute value of the property.  Apparently, some appraisers like to compare properties by the condition and the square footage.  So a similar home, a little smaller than my listing, that sells for a price that suggests $120 a square foot was an appropriate price may suggest my larger home is also worth $120 SF.   Of course, that’s not an absolute either but is an actual method some people use to find value when homes tend to vary a little bit from one another.  Either way it doesn’t matter, we are only asking $101 per SF and the appraiser will have no problem seeing the difference between a distressed property and a non-distressed property. 

As a general suggestion, when you want to know what a home is worth, you probably should not start by comparing it to a foreclosure or short sale…unless of course it actually is.  This home is not a foreclosure or a short sale.  In fact, as you had noticed, this property is not distressed in any way.  It is actually quite nice, or as you point out, perhaps too nice. 

Yes, my client is an investor and yes we did recently purchase this property at the public trustee’s auction.  Yes, I do believe that he should make a healthy profit on this home.  You might take note that what he paid for it at the auction has nothing to do with what the property is actually worth.  To put it in perspective, what would your client offer if we took away the appliances and features that make this home so nice?  Also, what if the home didn’t have title insurance and could not be inspected?  In fact, let’s pretend you couldn’t even see inside before you made your offer and your buyer had to pay all cash.  Clearly, this is not the same situation as when my seller purchased the property and in many ways, it is not even the same property as was purchased at the auction. 

As you explained to me, your client doesn’t qualify for the list price so it’s really not worth making a counter.  Thanks, that makes my job fairly easy though it does confuse me a little bit.  Shouldn’t the buyer qualify to buy the homes you are showing him?  Now I do not want to tell you how you should run your business but working with buyers that can actually buy the property you show them will make you much more effective.

What really confused me is that you then explained that he didn’t necessarily need all the closing costs you also asked for.   Really? 

I’ve also noticed that you seem to be using the “let’s see what sticks” method of negotiating.  Personally, I don’t believe in it.  It’s right up there with the idea that you could offer $20,000 dollars less and we should just meet in the middle.  Is that what is taught in the negotiation expert certification class?  I’d love to know because if that’s the trick, then I could save my money for the certification that says I work well with senior citizens.  So my question is,  why all the coy games?

Thanks for sending over the heavily redacted and initialed contract that seems to be filled out incorrectly.  Per our conversation, you mentioned you sort of needed that money for closing costs then mention it in multiple locations throughout the contract.  A couple years ago, the Colorado Real Estate commission changed the standard purchase contract so that, now when you do that,  I have to add them all together effectively doubling the amount you had mentioned to me on the phone.    I am sure if you had closed more than one buying transaction in the last 3 years, you probably would have realized that…then again…maybe you did realize it and were just trying to be sneaky.  I would certainly be impressed if that were the case. 

 Either way, as written, the contract cannot be accepted as is.  Of course, this makes your initial offer a bit of an exercise for all of us rather than an actual offer that could be accepted but thanks for keeping me on my toes.

As far as a counter offer goes, I’m not sure we should bother.  Especially since your buyer doesn’t qualify for anything higher than your offer.  Wouldn’t my seller be at risk accepting an offer from your buyer at a higher price now that we know he simply won’t qualify for the loan?  I’m afraid we’re going to have you talk to someone we trust at an actual bank that can let us know if we’re wasting our time or not.  Your  ‘conditional’ preapproval letter from your mortgage broker  is not a preapproval letter and we can’t treat it as such.

Again, thank you very much for your offer.  While it seems to be a complete waste of my time, it is not.   Because of your efforts, I know I have a hot property.   To be on the market just two days and to already have an offer, that must mean I’m doing something right.  I know that we must be  one of the best properties available in the area and in this price range, otherwise you would have written your offer on a different property.  This makes me quite optimistic of getting an acceptable offer worked out for my seller though I’m quite sorry that it probably won’t be with you and your client.

Sincerely,

Spencer Barron