Another Real Estate Story

Business is booming in Antigua (at least for me), and with all the projects I’m involved in I decided it was time to move out of the bedroom office and into a real office space where I could meet people and have a functioning staff.  Another local businessman and I have been looking around at office space in Antigua proper and we found a perfect office for our needs, a four bedroom condo type home on one of the main streets of Antigua with a perfect entryway area to function as a reception area, a small kitchen and patio.

The real estate agent showing us the property had told us the owner was asking $1000 but that the house could be rented for $750 on a two year contract.  So, we offered $750 for three years, seeing in the longer-term contract greater value for the owner, given the current economic conditions.  (I know, very naive of me).

The owner wasn’t impressed, and countered with saying her rent was actually $1000 a month, plus IVA, some sort of tax which adds up to 12% and which every agent tells me is never paid or collected.

So we increased our offer to $850 a month for three years, and explained to the owner that she was unlikely to rent this particular house to a family due to the traffic noise on the street, the lack of parking, the lack of hot water in the building, and that the distance from the park made it not as desirable as some other currently vacant properties on the market.  We also pointed out that the house would need some clean-up and painting, and that we would take care of those.

After initially claiming that she’d be better off just selling it (good luck), she agreed to $900 per month for two years and 11 months.  Apparently she wanted to avoid a three year contract.  We told our agent we could agree to the terms and to put things in motion.

Well, I wish I could say I was shocked by what happened next, but that would be an overstatement.  I was only mildly surprised when the agent reported back that the owner’s new offer was $1000 plus the 12% tax.

Let’s set aside the rather questionable negotiating strategy of dropping the price and then raising it or the threat to just sell the house instead of renting it; this is a dirty house on a loud street in Antigua without hot water that has a setup that would only work for a small number of commercial clients, and in the middle of a 30% drop in tourism and 40% drop in remittances and with vacant properties all over town that have been vacant since I moved here.  Despite all this, the owner has decide to increase her asking price after someone shows interest.

So, let me share with you how I will handle this situation.  I will now go to another real estate agent and have them indicate interest in the property in about a week’s time.  My offer will be $550 a month for one year.  This offer will be insulting to the owner and will call to mind the very reasonable offer she had from the other interested party.  It will also be a signal to the listing agent that the property can be rented, but not at the current offering price.

I’ll keep you posted.