This episode details how the difficult Texas 50-acre cash buyer demanded barbed wire fence relocation to match surveyed boundaries after contract signing despite this never being included in final terms, leading to strategic countermeasures: requiring $4,750 into escrow before work begins, maintaining the original closing date regardless of completion, and demanding additional hard deposit if extension is needed to cover opportunity costs.
Key Takeaways:
- Legal Language Without Teeth Means Nothing for Sub-$5K Disputes Contract clauses requiring payment for work if buyers back out are unenforceable at small dollar amounts since nobody sues over $5K, necessitating escrow deposits for actual protection.
- Cultural Negotiation Patterns Require Psychological Win Accommodation Certain buyer cultures push for continuous concessions seeking psychological victories, requiring strategic responses that provide the appearance of flexibility while maintaining financial protections.
- Closing Date Firmness Requires Additional Hard Deposit for Extensions Any extension beyond the original closing date must be accompanied by increased earnest money to compensate for opportunity costs and strengthen buyer commitment.
Listen to the full episode for the complete strategic response to difficult buyer tactics.
(Podcast transcript below)
Welcome to get serious today an update on that 50 acre Texas parcel that were in the midst of selling for those of you who aren’t familiar really quick. This was a kind of golden opportunity, minor subdivide that was roughly 45 minutes outside of downtown Dallas.
utilities outside of sewer that we had purchased for roughly 400K earlier this year. A developer went under contract for it for about 863. That fell through because amazingly the property was too flat. You can hear me speak about that in previous episodes. And we went under contract with another cash buyer within roughly a week.
After that buyer dropped for 750 K that was going to close in like, um, Yeah, roughly 30 days approximately. Uh, so, you know, still a very, very solid return. Obviously we would have loved to have the eight 63 here, but you know, can’t complain too much. And the deal is just getting a little long in the tooth. Plus, you know, there’s a bit more hair on this. Um, uh, as you know, uh, we kind of had different buyers evaluate the deal. So.
Still a nearly 2X on a very substantial investment. Can’t be complaining. So I know I’ve talked a bit about this buyer who’s looking at the deal. They were really playing hardball with us from pretty much everything. Just super, you know, just being sticklers about the contract and every single line item and just kept pushing and pushing and pushing. I know I talked about this.
I think last week on how we eventually said, Hey, enough is enough. Had it drawn a line in the sand for what they were asking for. And if you don’t accept these final terms, like we’re in the walk from the deal. cause we know it’s still a prized asset, even with that bit of hair that we still have on it. And they agreed to it. signed the contract. and I talked to the broker a few days ago who had met the buyer out there and they were walking it and just saying, yeah, we’re very, very excited to close.
looking forward to wrapping this one up here next month and their feasibility period I think is only 14 to 20 days I want to say went from when we signed the contract so we have that in the books though if you know feasibility period drops technically they only had a hundred dollar option fees so it’s almost a free option for them to get us under contract for you know 750 grand
you know, pretty substantial difference there. And, you know, even with that good news, like my partner and I were just discussing this, like we feel like, there’s going to be another shoe to drop just given how difficult this buyer has been to work with from the start here. And I know I mentioned before, you know, it’s a, you know, certain ethnicity where their culture more is just kind of.
pushing in negotiations and you just have to deal with that. It’s all types of buyers, not the most easy to work with, but we were able to kind of maneuver and still find a way to get to the, at least past the initial negotiation stakes and move toward the closing table. But we just felt, like, you know.
even if things are really looking good here, just like we are expecting that something else is going to come up, they’re going to continue to push us or try to look for additional concessions up until like the last day of closing. So we just had that in mind. And lo and behold, you know, maybe roughly 48 hours after they had visited the property with our broker, they were insisting that
in order to close on the property that we needed to have the existing barbed wire fence that surrounds the property moved so that it is fully in accordance with the surveyed acreage of the parent tract. And I discussed this on a previous podcast that just the way that the property was oriented, there’s
you know, a portion of the property that just makes it a little bit easier to access from one of the sides. So you didn’t have to like install a culvert and enter, you know, kind of directly from the main street frontage of the property. It’s a little hard to describe, but there was a reason behind this. you know, due to this, the barbed wire fence was offset a little bit from
where some of the acreage was and very, very minor. But you know, they were, they had been asking for this prior to going under contract, but it was never included within the final terms. Cause we just told them, Hey, we’re not lowering the price at all here. That that’s our final. Like if you want to do this, you can, you can take care of it or, you know, we can have the work done prior to close, but you’re going to have to pay for it.
So they didn’t push on that we didn’t include it in the original contract, but they came back and Are now insisting. Okay, this needs to be done prior to Closing here, even though it’s not in writing And so I was just talking to the brokers like this doesn’t what why does it really matter? Like hey, we could even set them up with a contractor So they can price it out and they weren’t insisting that we pay for they were just like hey We’ll bump the purchase price. The property is just you guys need to do this
What does it matter? why can’t you guys you know, you’re about to acquire this in less than a month? Just do it after we can get you a contractor if there’s really no difference in the total cost. It’s going to be to you What what’s the necessity of doing this and And logically, it doesn’t make any sense, but you know from a cultural perspective with this type of buyer it appears It’s just more like hey we want
keep pushing we want to get another psychological win from the seller here and it’s like okay well you know if this is what it takes to get it over the finish line fine but we’re gonna need like significant protections in place in order to do this first it’s like a timing thing you know we have a fairly tight closing date to come up here so you know both okay how much is it gonna cost
to get this done and how long can it be done? And the broker was thinking, yeah, probably between five to 6K and shouldn’t really take that long. He did not think that it was going to take longer than closing just to move over some fencing. Like it wasn’t a super substantial job, but he was on top. Okay, I got to figure out where these contractors are coming in at. And ultimately it looks like it’s going to be a $4,750.
job still on clear timeline. So that part needs to be determined. And then we were going to rewrite and update the contract where.
You know, we’re not going to be paying for any of this, you know, for the final, you know, gross sales price of the deal. So they need to up their purchase price to account for this. And if they decided back out from the deal for whatever reason, they’re going to be liable to pay for the work that we did as well. And that’s what the broker was initially suggesting, but I wanted to take it a step further. I’m like, no, have them
put those funds into escrow into the title, the title company account, because even if we have that wording for, you guys need to pay this, if you back out of the deal, you know, for something that’s sub 5k job, let’s say they just, you know, walk for whatever reason, we’re already out the near five grand for doing that fencing work, you know, it’s only a cost of 100 bucks to them. And
Even if we have the wording within the legal agreement, that’s the thing is oftentimes there’s no teeth behind the legal agreement for lower cost jobs or lower amounts of money. You’re not going to sue somebody over five grand. And that’s what I was telling the broker. It doesn’t actually mean anything if there’s no teeth behind a certain legal agreement. So we need their funds to be in to ensure that.
Yeah, the job is effectively paid for from them. even if we need to pay upfront while the property is still under our name, like it’s a, it’s a ridiculous kind of request to like, just, it doesn’t make any sense. but you know, again, if they’re looking to get a psychological win, fine. But you know, you guys are going to have to eat our terms for, for, for us to do this, prior to.
to closing here. So that’s what I told the broker to go back with. And then our land investor partner in the deal suggested to, it’s like, yeah, we need to ensure that we remain firm on the closing date here to where, you know, even if the job is in process, we still close on the same day. Or if you want to extend just to wait until this, you know, fence is moved, you’re going to have to put additional funds down as a hard deposit.
into the property and the amount there I Would probably just ask for doubling it up Or maybe like another Another thousand bucks probably we didn’t determine that yet. This hasn’t been finalized But you know another hit that’s like, okay We’re working with you here for kind of a ridiculous request if you needed to go longer like we’re gonna need extra money in to make you even more incentivized to close
on this deal and make it worth our while if you guys bail on it for whatever reason. Because the original hard deposit would at least cover our costs for doing the work, but we would want additional hard deposit to cover our opportunity costs of being off market. So that’s the other strategic move to take into account there. So…
Again, kind of a wild scenario to deal with here, but this is how to approach scenarios like this whenever you get into a more difficult buyer or seller arrangement on a particular property. Like just know where to draw the line, build in relevant protections. Know if you do have enough at stake to potentially sue if something goes south.
And if you don’t make sure you have like, if you know you’re not going to sue, then you need to have more protections to ensure there’s like actually teeth behind a negative outcome in, in, the scenario that you’re dealing with. So, hopefully this is helpful, with this in mind, serious land capital, for, any of your funding needs had a number of deals come in that were just like,
questionable quality here. Yeah, but that’s just how it goes. I saw another one just come in from Florida here recently. So I had to check that one out. Land Daily Diligence Facebook group for zero cost review of your land deals and landpricer.ai had an excellent meeting with my engineering team earlier pushing over the weekend. We were going to get this out here ASAP. I’m working every single day until we are wrapped up and have that out to you all. Looking forward to.
The next one, take care everybody, subscribe and share. Bye.
