Dealing with a seller who isn't open to negotiating

Another question for everyone tonight… planning on making an offer on a park, we are thinking of offering cash. We feel based on the numbers that the asking price is too high and had a number we felt comfortable working with to start the negotiating process to get it under contract. When we contacted the seller to obtain some information to fill in the contract properly he told us he is only accepting asking price and nothing less. Do we continue to offer what we were going to offer? If he is not open to negotiation now, do you think he would remain in this position if during due diligence we found items that would support a lower price? I know you’ll never necessarily know another persons actions but is it worth the time and energy going through due diligence just to find them refusing to lower the price if they’re taking this stance from the beginning?

I kind of have an idea the overall answer may be, well is the park worth purchasing at asking price or not but if anyone has some insight it would be appreciated. Thank you.

If the price is already high and the seller won’t negotiate, then you should seriously pass.

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Make the offer conditional on due diligence , tell them it is open for them to revisit in the future if they turn it down and walk away. There is no point in doing any in-depth due diligence until a offer is accepted.

I would just tell him you’re really interested in the park, but you just can’t get your numbers to pencil out at the asking price, and leave it at that. I’d then check in every few months and when the park hasn’t sold since it’s overpriced work on building that relationship (ask how the park’s going, etc), and probe on if he’s now open to considering other offers.

I would personally be very reluctant to put in an offer I know there’s no way I can close on, there’s a good chance it won’t work and will blow up the relationship vs using the above tactic.

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bingo this is the proper protocol when handling this situation.

There is a lot of great advice here. I’d add that if you don’t ask, you don’t get. If I was you, I’d let the the seller know that he’s asking too much for the park and that parks generally sell at an ‘x’ cap rate (he may or may not understand this) and lenders won’t lend at the price he’s asking. Then I’d say that I may have the ability to pay all cash - and if so I can offer $x… and I can include an extra $x which is the amount I’d have to pay for a loan.

Sometimes the old timers/old schoolers take a hard negotiating stance. Another thing to possibly be prepared for is a short and simple purchase agreement.

The asking price isn’t absolutely horrible but based on the numbers we were given its more than we feel the park is worth. We were thinking about just placing the cash offer anyway and see what happens. I don’t think my partner had mentioned to him in discussions we were offering cash so that might change his mind. Can’t hurt to try I suppose. I’m sure if we get it under contract we could flush out a lot right off the bat before we go paying for inspections and etc. Ask for what you want or take what you get right?

I think you are all looking at this the wrong way. The price is a function of the risk. A great deal can support a lot of risk. If the deal sucks, it had better not be risky to boot. The more stiff the price, the more sure I have to be during DD that there’s nothing that can go wrong. (Of course something will always bite you, but you want this to be minimal).

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