Real Estate Acquisition Tips

Do Sellers Choose A “Non-Economic” Reason Not To Sell?

by Marvin Levin

In 1967, Larry Warner, a Lake County, California broker, brought to me an opportunity to buy 2,000 acres. The parcel was owned by three brothers, who had inherited the property from their father, Mr. Noble.

I asked Larry how long the property had been on the market, and he said it had been over two years. Apparently, he and other brokers had brought offers to the sellers and Larry reported they had all failed to close. Larry made an insightful remark, which I totally missed at the time. He said that the sellers had never replied with a counter offer.

So, Larry and I traveled to Orange County in order to submit the offer in person. Two of the brothers were there, along with their wives. We presented our offer (which included a release of the home parcel in exchange for the down payment, plus usual subdivider terms). One of the wives asked me about my financial condition, and I scribbled out a balance sheet as we sat at the table. She said: “You don’t have much of a financial statement.” For the next half hour or so, Larry and I bantered back and forth with the two brothers and got absolutely nowhere. It was then that I understood the impact of Larry’s comment that the sellers “had never replied with a counter offer.”

It was then that, entirely by accident, I stumbled into an important real estate idea – the point of this chapter.

I got up to leave and said to the two brothers: “Well, I hope we can make a deal. And, if we do, I hope you will permit me to name the project ‘Noble Ranch Estates’ (the family name).” Then, one of the brothers reached out, took me by the arm, and asked me to sit down to discuss the deal a bit further. Without exaggeration, I can now report that in five minutes we had a deal subject to minor tweaking.

The accidental discovery was that the Noble family, to some extent, tied their identity to this property. I told them that I planned to build an elevated arched sign over the entrance to the property that would contain the words “Noble Ranch Estates.” I had absolutely no intention to manipulate the transaction because I was extremely serious that the Noble family was well known in the community and that, as a developer of these 40-acre ranchettes, we would also obtain some benefit. I also requested that I be permitted to engrave the history of the Noble family on a brass plaque to be placed alongside the entry gate.

Several times, I have had occasion to borrow from that idea. I sincerely think that it is an act of kindness to acknowledge the family history of a land parcel or a building.

This is a simple application of the “golden rule.” If your family had acquired the property over 100 years ago and it has passed through several generations, wouldn’t you want to preserve that history in an appropriate way, particularly if it would contribute to the success of the project?

If you need financing or joint venture equity for a project, please contact me.