Real Estate advice needed, seller is being difficult!

[expos]

I'll try to summarize best I can.

My wife and I are looking at property to buy. It's in a prime location, downtown, and in a small yet beautiful building with kitchen space that her grandfather once owned (so it's personal). We want to open a boutique pasta shop that serves homemade dishes 6 days a week. We have investors and people are excited about it.

However, the owner of the building sends me a message every month asking when we are going to buy the building and threatens us that other people are interested so that we "better put an offer in soon". However, over the past 10 months nobody has stepped forward and bought it, so he's obviously lying about the amount of interest the building is getting. He won't drop his price either. The cost is roughly $450K (!) and he won't budge on the price or lease it to us.

We put in an offer for it 11 months ago for $375K and he was pissed at the offer and rejected it.

He has been a bigger jerk lately because he just paid summer taxes on the building and it's vacant. He's been telling me, unsolicited, that two businessman are now interested in moving in before the winter comes.

So, is this guy pulling my leg? I'd say yes. Any real estate professionals want to chime in on why this guy is doing this crap to us? It's getting really annoying.

 

[Bible_Belt]

He is probably just as annoyed with you for low balling on your offer.

Get creative. Ask him to take part of the purchase price as a note, and receive payments instead of all cash up front.

 

[expos]

He is probably just as annoyed with you for low balling on your offer.

Get creative. Ask him to take part of the purchase price as a note, and receive payments instead of all cash up front.

Good idea, however, this guy is in bankruptcy and needs all his money now because all five of his restaurants shut down due to lack of business. I believe we are his only offer to date. Everyone we've talked to says his price is WAY too high for the area and won't sell if he doesn't drop it.

 

[taiyuu_otoko]

Be patient with them. Real estate prices are falling, and will continue to fall.

If he really DOESN'T have many other offers, you have nothing to worry about.

I'd just make sure there aren't any offers, and be patient.

Maybe keep tabs on prices in the area, and gently remind him that prices are falling and will continue to fall.

IDEALLY he'll get the idea on his own that if he doesn't accept your price he won't ever get any price.

Worst case is if he has already made the decision that if he doesn't get his price he'll stand pat.

But since he's trying to convince you he is getting offers, this isn't likely the case.

The worst thing is to let him know how much you have invested emotionally in the place. Never a good idea.

 

[expos]

The worst thing is to let him know how much you have invested emotionally in the place. Never a good idea.

Oh believe me, he already knows. His already knows about the tie-in to my wife's grandfather once owning it and writes me emails telling me how he really wants us to get the building, but then sends texts about other people being interested, which I think is in poor form. He already lied to us once about "getting another offer and going with them" because it would be a short sale, but it never happened.

 

[BeExcellent]

Good idea, however, this guy is in bankruptcy and needs all his money now because all five of his restaurants shut down due to lack of business. I believe we are his only offer to date. Everyone we've talked to says his price is WAY too high for the area and won't sell if he doesn't drop it.

This tells you all you need to know. Get your investors lined up and get cash prepared. This nit wit is in process of losing the building. The blood is already in the water. Other investors are too smart to over pay. Until he loses it he's too greedy. Once the price comes in line you'll have competition and you need to be prepared you may lose the place. That has to be OK in your mind.

You could always tell him that for now your offer stands but that if he waits too long your offer will have to decrease to reflect market values. Do not put any timeline on decrease of your offer. In fact, say, in writing that unless he executes a signed sales contract that you reserve the right to reduce your offer by whatever amount you deem appropriate.

That will put him in a place of having to consider your 375K in the context that he may not be able to get that. It creates value in your offer. It also prevents him crying foul legally if you do choose to reduce the price you are willing to pay.

Meanwhile be patient and take the emotion out of it. This is a business transaction. You can always buy it from the bank or the bankruptcy court later.

 

[Bible_Belt]

BE makes good points, but did you mean "in bankruptcy" in the sense that he has already filed, or just that he is broke? If there has been a filing, are you in the us or canada?

 

[expos]

BE makes good points, but did you mean "in bankruptcy" in the sense that he has already filed, or just that he is broke? If there has been a filing, are you in the us or canada?

I should clarify. He is BROKE. They did liquidation. I think one of our investors mentioned bankruptcy by I don't have anyway of determining that. Google search reveals nothing - no press releases.

 

[marvinlfloresq]

IMO he may have other offers. If you are firm on your offer, then why worry? Tell him you are firm & to call you if he accepts it.
Aftermath:
A) he accepts your offer
B) he rejects it and sells or loses to the bank. C) you find somewhere else.
D) make a higher offer and meet him slightly in the middle.
Thats all. Good luck.