Investing in Real Estate is almost never easy and many times you learn your most valuable lessons by deals that have fallen apart. The only real hope is that these lessons are not expensive ones, but many times they are. You can have all the mentors you want or have packed your brain with as much knowledge as possible and that still doesn’t mean you will escape the school have hard knocks.
Deal #2 is officially dead! After 2 weeks of calling the sellers trying to figure out why we haven’t heard from them after only getting the addendum signed (not the contract) we finally decided to call the attorney and got our answer. The sellers backed out because we lowered our price ($2000) from our original agreement (the one that they backed out on). They really needed 40k but we just couldn’t offer that to them.
The consequences for us are not huge…
- Lost $75 for the title search that was performed
- Lost a potential $5k wholesale fee
- Had to inform our buyer the deal fell through (potentially lowering our credibility slightly)
The lessons learned though are valuable…
- We learned we need to be a bit more forceful when it comes to getting the contracts signed. As the saying goes “Strike When The Iron Is Hot” applies here. What happened is that we gave the sellers to much time to think about the deal and our offer. They got cold feet.
- We learned a little about human behavior. When sellers stop returning phone calls all of a sudden, it means they are getting nervous about the deal. Motivated people will be sure to stay in contact and not give you excuses for “taking so long to call back”.
- Build up good rapport with the seller. The deal will go much smoother if the seller trusts you and feels comfortable talking about what they are thinking. I believed we did this, but I guess we didn’t or in some cases this just isn’t possible depending on the seller.
Even if Deal #2 is officially dead, we plan on following up with them next month to see how things are going. Our buyer is still interested if we can rekindle the fire.
What is your experience with sellers who suddenly stop communicating with you? How do keep the lines of communication open?
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