In my time I’ve seen property owners make some pretty bad decisions, but this one last month was among the worst. I’m still not over it.
A potential client of mine, Steve has a property that is suitable for the development of 8 or 9 units over 3 levels. Steve called me in early December as he was considering a sale of his property to a developer. I went over to see him, presented to him and he decided to list his property with me in early February.
The comparable sales suggested that we could sell the property for $770,000, but I told Steve that I was confident that we could get $800,000 and that we would hopefully get even more than that. He was on board and suggested we speak again in the middle of January to start planning the sale.
I contacted Steve again in early January. He informed me that over the Christmas period a developer knocked on his door and offered to buy his property. Steve eventually agreed to sell his property for $760,000 to this developer – I couldn’t believe it!
Fortunately he hadn’t signed the contract as yet. I told him not to sign the contract and that I would find a far better offer that day. After 2 hours of furious scrambling I managed to obtain an offer of $800,000, which even after my commission was $20,000 better for Steve than his original offer. Thinking I had averted the crisis and saved Steve from making a terrible decision I called him to pass on the good news. To my amazement he told me that in the past 2 hours he had signed the contract with the developer and that the deal was done.
To make matters worse for Steve, the buyer that I scrambled to get the $800,000 offer from later confessed to me that he eventually would have been willing to pay up to $850,000. So instead of selling for $850,000, Steve sold for $760,000.
For his impatience, Steve lost a minimum of $68,000. The equivalent of a year’s salary tax-free.
You can lead a horse to water, but you can’t make it drink.
Don’t do what Steve did…