Strategy Question--when Seller Doesn't Know I Know...
I get calls sometimes on my ad from sellers who hide certain details (surprise), guess they don't want to show all their cards. I'm meeting a guy this weekend who sounded casual about selling, though he did call, and claims to be "motivated." A bit of courthouse research showed he bought this primo lakeshore raw land two years ago (it's appreciated by 50%+ already) on Contract for Deed. He hasn't paid taxes since, and missed an October 1 full-cash-out balloon payment due. He doesn't know I know--and may not realize how easy it is to get--this info.
So how would you play it? Tell him early on that I know, and use my upper hand to bargain my best price right away? Get a contract making a higher offer with contingencies, then come later and say, "Oh, by the way, guess what I found...?" and use this info to renegotiate an even better price? It isn't a Sub2 or Forceclosure situation yet, just a seller who apparently needs to sell worse than he lets on. This guy talks like he's quite a player, and has several recent DWI and Disorderly Conduct criminal convictions (also easy to find online). Any advice appreciated.
Just be right up front with them but don't flash it in their face. If they ask why your offer is so low run through the numbers with them. When you get to the part about deducting the cost of the missed ballon payment and they say, "Oh no that's taken care of." Just say, "You know I thought the same thing but when I checked the courthouse records a satisfaction wasn't recorded so for now I have to consider it" and just keep going. Don't even wait for an answer.
Knowing the severity of the Seller's problems simply gives you leverage in that you can press harder without worrying the Seller will walk.
Don't show your cards. Don't mention you know. Don't use this information openly. Just bargain for the best price with confidence that the guy is in worse shape than he is willing to admit.
The only exception would be if you think the Seller genuinely is unaware of these problems. Some Sellers don't know about that tax lien or credit card judgment, because they have not checked. But it sounds like this guy knows.
Whenever I am negotiating I try to remember the old adage, "Do you know why God gave you two ears and only one mouth? Because he wants you to listen twice as much as you talk."
I'd keep my mouth shut for a while and let him talk.
I would just play it by ear. Not only from his financial record but his criminal record as well he is pretty reckless. From a psychological point just have the contract drawn prior to meeting him at your price point and maybe he will impulsively /recklessly sign. Also, please steer me towards this easily attainable info.
You can not read into the psychy of a person. He already told you he was motivated. What else do you need to know? So he is reckless, that means that he just might tell you to go take a hike, even if he is motivated. I agree that you should listen to him. Then ask some questions - are you current with the taxes, how do you have the property under control, if I were you pay you all cash and close quick was is the least you can take, etc. Stay professional. I do not think that knowing someone's dirty laundry puts you in a better negotiating position.
Brenda