Posted by Tony-VA on October 22, 1999 at 08:47:22:
I asked Lonnie this same question at the 3 day workshop. His response was that he prefers to buy homes during bad weather because he is the only one willing to do so. No competition on cold rainy days makes for motivated sellers. I think many of us have experienced a slower response from buyers this fall and are getting a bit nervous about winter. Admittedly, this slump could be caused by many things that are not necessarily related directly to the Fall slump.
Lonnie’s advice was to buy during bad weather but buy the home with the understanding that you may have to cover holding costs until better weather. This alone could be a great negotiation tool. Why not explain to the Seller just that. I have no doubt that they have already experienced it. Let the sit a little longer if they have not. Then explain that the reason you cannot pay what they were asking is because you know from experience that you will have to cover holding costs such as lot rent until next spring (or whatever time you choose). Give them your card, and explain that if they want to pay lot rent until spring, you may be interested in buying the home then, but not now for the price that they are asking. Then use Lonnie’s “if I can buy the home today, what would be your best cash price?” From there, use his walk-away technique if you do not get the price you want. Remember, you are the one with the options. If we look at the “Bad weather slump” as yet another negotiation option for us as the buyer, we can make the money going into the deal that will cover the holding costs and still produce the yields we want.
If we buy it right, we can even use this option when selling to our buyers. Explain to them that you are willing to work with them to get them into the home sooner. I always explain that if they can buy the home now, it saves us both money. I simply point out that if I have to pay more lot rents while advertising the home, then the cost of the house goes up because I have to add these holding costs. This technique has worked very well for me. Everyone understands that we are in this business to make a profit and that a quicker sale reduces our costs, which in turn reduces their costs. I have yet to meet anyone that is willing to admit that they don’t want to save money.
Best wishes for your success,