This lot has been on the market for a long time, and I'm probably paying too much for it. But it's taken a while for me to realize just how valuable it is to me and the future success of my property. The Seller has had the property on the market for quite a while. Years back he had offered it to the past owner of my building for $3,000, and she had declined. Then over a year ago he listed it for 6 months at the outlandish price of $12,000 and after no bites, he re-listed it for $7,000. It wasn't until the last week of his second 6 month listing contract that he got a response from me with an offer of $2,500. I figured that I'd start lower and work my way to the $3,000 price that he'd looked for from the previous owner. He countered at $3,500 within the first couple hours and I countered back at the $3,000 which I expected to end at. And then he went silent for 3 weeks with no response..... Apparently he had decided not to take my counteroffer and to re-list the property with another agent at $4,500. But what about his last offer to us at $3,500? "He fully expects to get the full asking price." Shit.
In my head, $3,000 was the value of the lot (and still is) and the cheap part of me was going to stubbornly sweat it out and hope that no other buyers surfaced for the lot. So I waited without making a move. Part of me was tempted to put a low offer back on the table but to give him a longer time frame to respond, but I didn't want him shopping my offer to others saying, "I've got this one, but I'll give it to you for a little more." I didn't think that anyone would really pay what he was asking for he lot, but what if there was someone willing to overpay?
What changed my mind was that every person that I talked to during those three weeks looked at me as if I were crazy. To let a mere $1,500 which would look like chump change down the road (or even worse the $500 difference between out initial offers) throw off my plans for my building was pretty shortsighted. It came down to my godfather quoting Ben Franklin saying that this was the definition of "Penny wise, but pound foolish" for that light bulb to go off in my head.
Once I took a different perspective that maybe it was worth more to me, did I see some things that I hadn't noticed the first time around. The biggest of which was that the lot was developable and that it sat right between my building and the city views, which I took to be one of my advantages. Yes it would be hard to develop the land, but not controlling the lot would leave that wild card on the table. It would also make it harder to attract the type of tenants that want off-street parking from an adjoining lot, which in OTR is a rare thing. Another potentially huge advantage would be left on the table for a mere $1,500.
Over paying by 50% of what I think the lot is actually worth isn't looking so bad now, but it all comes down the turning that potential into reality. Stay tuned...
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