18. The Offer

It may be best to make your offer several times, each time raising it a little and then if not accepted, to "give it a rest." Let the seller think you are finished, and it also helps to implant the hint that you are wavering between his property and another. Now that he has turned down your offer you have washed your hands of his deal and are going ahead with "the rival." Of course it does not do to send in a higher offer im­mediately after rejection of an earlier one. That will soon give the seller the hint that if he holds out long enough he will get top price.

I have found that spacing should be a minimum of ten days between the first and second offers and two weeks between any subsequent ones. In no case is it wise to make more than three or four. If you have been rejected three or four times, and still feel you want this building badly enough to hurry its pur­chase, it is better to sit down and talk with the owner face to face and hash out what is the final bottom price. Then you take it or walk away.

An old friend, Peter Turchon, who owns the country's big­gest home-remodeling company and buys and sells an average of 500 homes a year, says, "We cannot afford to pay for a man's love for the property. We must buy it for what it is worth. We cannot afford heart-balm on top of the price."

It is not difficult to understand how many owners have heard rumors, many false, of how this seller or that got a big price for his property, and as a result have put an unrealistically high price on their buildings. After this is because the owner has worked on it with his own hands, nursed it, fixed it, cleaned it, painted it. It is his baby. But it cannot be yours. You are buying income-producing merchandise and that's all.

Perhaps the most profitable state of mind the buyer should maintain is, "There are plenty of properties. If I do not buy this one, there will be dozens more and better ones. I can wait." And that is the truth.

If the property is a choice piece, that is, if the MIF and Value Formula say yes at (let us say) $14,000, you can proceed to $13,000 and stop there. The figure of $14,000 must come from him. If necessary, ask him definitely and finally, what his bot­tom price is, and don't accept it too quickly even if he mentions $14,000. Take a few days to "think about it" and offer to split before you accept. I stress this procedure because I have found that if you accept the $14,000 figure quickly you make the seller back off and wonder whether he could not have gotten more. Since he has as yet signed nothing, you may find that he stalls on the signing and later comes back with, "My wife won't let me sell under $15,000. That's final."

Some examples in this regard are outstanding in my experi­ence and may assist you in this matter of offers. In the course of counseling and guiding students and friends, I have encoun­tered these situations.

A student comes to me with the facts on a property and raves about the location and the other choice features of it. The Value Formula says $30,000. Says the student, "He's asking $23,000 and I offered him $20,000. If he'd come down just $1,000 I'd grab it." The student is a victim of a habit. He cannot ever bring himself to pay what is asked for anything. If he can­not beat the seller down, he simply cannot bring himself to buy. I answer him in five words. "Stop fooling around. Buy it."

PRECAUTIONS IN THE OFFER

When making the offer, be sure to fill out the part that specifies that unless you get certain financing, on specific terms, you get your deposit back and all parties are discharged from all obligations.

There are a few things that you should carefully set out on your offer to be sure you get what you should with the property and that it is paid for, and that you DO NOT get what you shouldn't. Any furniture, refrigerators, rugs, et cetera, that will go with the property should be identified and listed in the offer as passing with the building and your lawyer will see that you are protected at the time of passing papers, against the danger of existing claims, liens, et cetera, on the items.

It is well to incorporate in the offer, since it becomes your agreement after both have signed, what leases, if any, exist. You may encounter a case where the owner has given a rela­tive a ten-year lease on an apartment for a very low rent and you may be forced to respect it.

If your state has rent controls, it would be necessary that the apartments be identified and the seller should warrant what the rents being collected are and that they are in accordance with legal rent ceilings.

These things will be checked later by your lawyer when he consummates the deal at passing papers, but he cannot hold the seller to anything that is not in the written agreement, or contract, since this is presumed to contain within its four cor­ners, all the terms and representations that the parties have made.

If there is any possibility that the building was ever con­verted, as from one-family to three-family, it is also provident that you incorporate in the offer the words:

"Seller warrants that the building is legally a three-family building in accordance with the building and zoning laws of the city and state."

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