Monday, August 10, 2009

Game of Chicken

1800 sq.ft. office + 1500 sq.ft. apt.

Ask: $187k
Offer: $162k
Counter: $175k
Stand firm... hold your ground.
Don't be a prick! You can afford a little more.
But it's not my job to ensure they don't lose money. Besides... they won't lose any money: they bought at $158k four years ago. They're lucky to not lose money in today's market.
But... they did put perhaps $15k in upgrades.

But I don't need an apartment. I'd be happy with the office. Besides, I should be more concerned that I don't lose money. They still have a mortgage to pay. I don't yet!

I've got two days. What'll I do?


Lilian said...

I'd say... holding ground seems to make more sense. You have nothing to lose. There will be other properties for sale, right?

undine said...

I don't know, but let us know how it turns out!

ArticulateDad said...

This morning I rejected their counter, and proposed that perhaps they should simply lease the office space to me, at terms I offered. While I like the building and the location, I may be in a better position to simply lease for a couple years. I don't have a mortgage to cover yet, but they do. The risk lies in holding the bag.

In terms of the value of the building itself, I wouldn't expect to realize any gains over the next few years. There is simply too much vacancy downtown.

The value for me is in having appropriate office space for my business. If I can get that by leasing, without locking up so much cash in a down payment, then I may be better off, while I bide my time to see how the economy, the market, and my business settle.

The value for them is that now they have a mortgage to cover, and no tenants. I can relieve some of that burden by leasing it, or by buying it at a comfortable price. The next move is theirs.

undine said...

Good logic.

ArticulateDad said...

Latest word from their agent: They're really not interested in leasing only part of the building (no surprise there), but if I inched up to $165k or so, and closed mid-September, they'd probably go for it. Hmmm. I'll talk to the bankers tomorrow and see what's reasonably possible. For a commercial transaction that might be tight. But, I think I could do that. I'll keep you posted. Stand by.