What I am fascinated with: how premium properties require utterly completely different negotiation guidelines—and when to attract a line within the sand.
We’re below contract to promote our 50-acre TX property for $750K (purchased for $400K) inside 30 days. Must be feeling reduction for an imminent massive money injection, proper?
As an alternative, I am coping with essentially the most nitpicking purchaser I’ve encountered in years—and we’re nonetheless not sure they will truly shut till the funds hit our account.
This is not some determined fireplace sale. We have gotten written presents each 7-10 days since itemizing. The earlier developer spent $50K on engineering research earlier than strolling, because the property was too flat (…what?) for his or her plans.
Inside every week of re-listing, this money purchaser emerged, providing $750K agency.
Whereas this was on the low finish of what we hoped to get for this property, it was beginning to get lengthy within the tooth, there was extra hair than we anticipated once we purchased it, and the kid parcel market (3 parcels of ~16.5 ac every) was much less sturdy in actuality.
So it made sense to money out and nonetheless get a wonderful return.
The $350K Revenue Deal That Nearly Fell Aside
The client pushed us on nearly all the things inside the contract:
- Requesting timeline extensions after agreeing to 30 days
- Questioning commonplace survey practices
- Requesting a minimal possibility charge ($100) for such a big buy
- Mendacity about lender necessities about needing extra time to shut (I referred to as their lender straight—confirmed 30 days was high quality)
My dealer needed to cuss them out. I couldn’t blame him.
However this is the strategic actuality: This can be a $750K premium deal with excessive purchaser curiosity, not a $20K flip. The principles change at this stage.
I instructed our dealer to concede on a lot of the minor objects (e.g., we’d cowl “shortages in space” upon title co. assessment, at most a pair hundred bucks).
After days of continuous to bend for this purchaser, they countered us on the contract, saying the vendor would pay for a brand new survey “if the title firm has points.” We would already spent $5K on a boundary survey inside the previous couple of months. They saved saying they’d want not less than 45 days to shut as properly.
Sufficient was sufficient. I advised our dealer,
“Inform them in no unsure phrases—if they do not settle for the survey threat, to be paid by the customer, and do not settle for our last closing timeline of 35 days, we stroll.”
Full cease. Line drawn.
Fortuitously, they realized we had been critical, they usually signed the contract inside 24 hours.
Why Troublesome Consumers Push Till You Push Again
Earlier than signing the contract, they’d talked about wanting us to maneuver barbed wire fencing to match precise survey boundaries. We stated they’d need to pay for it. They appeared to again off, so it by no means made it into the contract.
Then got here their psychological energy play: Inside every week of going below contract, they’re again: “We can’t shut except you deal with the fencing prior, although we’ll cowl the prices at shut.”
Zero logical sense. We might hook them up with a dependable contractor, however why can’t they cope with this after closing?
The Psychological Energy Play That Modified Every thing
We might work with them, however the phrases would should be inflexible:
- Contract value amended to replicate the price of the work ($4,750 quote)
- If the customer terminates, they’re required to pay for the work.
- Critically, the $4,750 value goes into escrow earlier than we pay the contractor.
- The deadline is agency. If work isn’t executed prior to shut, one other $1K EMD is required to go onerous to increase.
The funds HAVE to be in escrow. Authorized language means nothing when you understand you will not sue over $5K. You must perceive what you’re keen to sue for earlier than agreeing to any phrases.
No actual tooth behind contract language? Create precise monetary penalties.
4 Classes From Premium Property Negotiations
- Premium belongings deserve premium therapy. While you’re getting weekly presents, you negotiate from energy. Know your BATNA and your walk-away level (do you’ve one?).
- Take a look at purchaser resolve early. Troublesome patrons will push till you push again. Drawing early traces reveals whether or not they’re critical or simply testing boundaries. Work out what’s vital and what’s minor earlier than signing something.
- Construct tooth into concessions. Strict authorized language means nothing should you KNOW you received’t implement it. Escrow accounts and onerous deposits create actual penalties.
- Perceive cultural negotiation patterns. Clearly a delicate subject, and positively not a tough and quick rule, however in our expertise, this specific purchaser’s ethnic background tends towards aggressive pushing for psychological wins, even when requests do not make logical sense.
Recognizing this sample helped us reply strategically and saved us on our toes, figuring out there can be further sneakers to drop.
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On the lookout for dependable funding in your subsequent premium land deal? Severe Land Capital prefers higher-value acquisitions ($150K+ buy value) with sturdy exit potential. Our rising experience in advanced negotiations means higher safety to your offers and higher income.
P.S. Macro replace from my companion on the $200B hedge fund: They’re beginning to really feel extra optimistic, slowly opening up deal circulate after months of warning and wild market swings. And at SLC, whereas we’re sustaining our conservative strategy, the temper is certainly shifting. We’re monitoring intently and feeling significantly higher than we had been in early April 2025 (although staying on high of the final housing correction occurring all through a lot of the US).
