I’m negotiating a deal to acquire a MHP in good faith through the seller’s broker - out of left field comes a third party “1031 buyer” who submitted a “strong offer” on the deal that I am wanting to get done. It is strange, b/c the deal has been on the market for 24 months with no activity til I showed up.1.) How do I know if the 1031 buyer exists, or if it is just a ploy to jack up my offer?2.) Supposing this is a real competing offer, does the fact it is a 1031 buyer suggest that it could be 1 of the 3 properties that have been deemed as potential buys? (which is a lesser threat, playing the odd’s)3.) The broker is self employed - does that mean he/she is less concerned with playing by the rules (whether benefitting me or not)?4.) Is there a way to “call him” on the potentially bogus offer, other than to walk and/or put an expiration date on the offer?Thank you!
There probably is no 1031 buyer. That’s the oldest trick in the game. You simply tell them that your offer is the most that the property is worth, and if they go with someone else, then you will probably move on to another property – that you’ve seen several others that you like just as much – but they can always call you just in case. Then when the guy calls you, tell him that you’ve found something you like better, but that you might consider the park at a lower price. The “I’ve got other options” pitch can work both ways. When you call the bluff, it puts the seller in a much weaker position because he is now chasing after you.
jkmhp2, as a SC Real Estate Broker-In-Charge and Realtor the 1031 Buyer could or could not exist.This weekend I just called about a Mobile Home Park, which had been on the market for 2 years +, and low and behold it now had a Ratified Contract and it is closing today.My husband and I placed 3 different offers on the same Mobile Home Park (over a 2 year span). Only the third offer terms were acceptable to both parties. We ended up purchasing this MHP on the third offer (third time is a charm :-).However, when we placed the first offer, we heard the ‘we have another offer on the table’. They wanted us to give our ‘highest and best offer’. Since we had already given our highest and best offer, we stayed with the same amount. The Sellers ended up going with the other offer, but during Due Diligence the ‘Potential Buyers’ pulled their offer.You honestly never know if the ‘other offer’ exists or does not exist.Below is a list of things to do if the Mobile Home Park is listed on MLS (Multiple List Service):1.) As a Buyer determine the following before you even make your offer:a.) Initial Offerb.) Counter Offer/sc.) Final OfferOnce you determine your ‘Final Offer’ do NOT go above that price. If the Realtor says that there is another offer, just tell them that you have put in your best offer (if you have done this). If you have not put in your best offer, then submit your final offer. Mobile Home Parks are Investment / Cash Flow properties and the price can be determined using formulas. This helps take the emotion out of the equation.2.) Retain a Real Estate Buyer’s Realtor (who is knowledgeable in MHPs): Do NOT use the Seller’s Real Estate Agent. If the MHP is listed on MLS, the Seller will be paying the Commission. Thus, you will want to secure a Real Estate Agent that works specifically for you and has your best interest in mind. A Real Estate Agent does not have the same duties in SC if they are working for both the Seller and the Buyer. Logically, the Real Estate Agent just cannot truly represent both sides to the same degree as two different Real Estate Agents.3.) Place An Expiration Date On Your Offer: Do NOT give an Offer with no Expiration Date. Make sure that your Offer has an Expiration Date (2 Days, 3 Days Or 1 Week Max…if a Bank or Large Institution).The Expiration Date should have both the Date and Time that it expires. Having no Expiration Date leaves you at the mercy of the Seller/s. You want to have the upper hand. The Seller/s need to know that you have a wad of money and that you will either spend it on their MHP or another one.4.) Include An Addendum About Yourself: As a Realtor I have even included an Addendum written by the Potential Buyer about themselves. If it is an individual trying to purchase a ‘Mom & Pop’ MHP, then the Potential Buyer can personalize themselves to the Seller.One of the MHPs that my Husband and I purchased was from the Daughter of a Mom and Pop who built the MHP. It was their family land and part of the Daughter’s life. As part of the Offer we included an Addendum stating that we were a family and sought to keep their family’s heritage. The Daughter sold the MHP to us two years ago. She still owns adjoining property (Pecan Grove) and drives by the MHP on occasion. The Daughter actually wrote us the other day and said that she was happy to see that the MHP was being kept up and that it made her happy that we purchased it.Sometimes intangible items are very important when trying to purchase a MHP.We wish you the very best!