OfflineIn real estate, as in almost everything in life the advantage goes to the one in control. Putting a property under contract even before all the details are worked out puts you in the drivers seat. And thats where you need to be. When you find an opportunity that looks good, always think about quickly getting it under contract. The contract gives you control and you will always have clause that will allow you to exit the deal if your due diligence (inspections, conveyances, zoning research, etc.) shows that you need to get out. In some cases you might need to invest in an option or a non refundable deposit, but this may be a small consideration in return for the advantage of controlling the sale. If you determine that you do not want the property, you can still assign your contract to another investor and be pad for it.
Control the Property & Include Escape Clauses In Your Offer
1. Escape Based on Condition at Inspection
2. Escape Based on Results of Feasibility Study
3. Escape Based on Financing
4. Escape Based on Repairs
5. Escape Based on Other Party Approval
Negotiate everything. You do this when you make your initial offer and later with counter-offers.Of course, being a Graziosian, you will get your price with your discount, but that is only the beginning. Look at the property and see what could be conveyed with the sale.
Valuable conveyances could include the washer, dryer, the drapes or blinds, the gas grill, or some of the furniture. I had a friend named Kimberly, that was a practicing REI, convey in the contract that the sellers 1967 Mustang and their Harley Motorcycle, go with the property. In another deal she conveyed that the spa stay with the house as well as the Italian marble hall table. SHE GOT IT ALL!
When appropriate ask for needed repairs or for the seller to cover part or all of your closing cost. YOU NEVER KNOW WHAT YOU CAN GET TILL YOU ASK! Think A Little Different...think outside the house!
NEGOTIATE EVERYTHING
1. Price
2. Financing Costs
3. Closing Costs
4. Possession Date
5. Conveyances
6. Ability to Rent Prior to Closing
7. Ability to Start Repairs Prior to Closing
8. Ability to Assign Contract
The key is to find out what is important to the seller, like I did with the 3 Houses. Offer them what they want and hen ask for what you want. If it doe not work, it does not work.
Great negotiators and great investigators (refer to May 28th assignment). They know that every transaction needs to be a win-win. You need to make make it a win-win or you for sure, but also look for the best way to make it a win for the other party.
Always be curious; always ask. Find out what is important to the seller and know what is important to you.
NEGOTIATE ANYTHING AND EVERYTHING
....boy! my fingers are tired, but I just had to gt it off my chest.
Anita
******************************************
TWITTER - anitarny / FACEBOOK - anitarny
"FAILURE IS NOT AN OPTION"
Just met with a seller this morning who owns a $250K home FREE & Clear in a wonderful neighborhood. House needs about $20K to $25K in repairs.
Seller looking to use the money made on this home to apply towards Mother-In-Law's Senior Living Expenses.
Seller is shopping right now for the Highest Bidder, therefore is not pressured to sell right away.
I made an initial verbal offer of $125K inwhich seller didn't accept.
At what point should I have made my final and last offer? Please advise.
Thanks
Rodney
Start Where You Are! Use What You Have! Do What You Can!
Never let failure dominate you. Never let the mistates of your past Lord over you.
Go Confidently in the Direction of Your Dreams. Live the Life You Have Imagined.
- Henry David Thoreau
Website that get's results: www.jracrealestateinvestments.com
I would have made my first offer my highest and best. I know a lot of people start low and maybe they will get their first offer accepted. I just don't personally operate that way. I work the numbers and make an offer. Here is what I would have done (others would do differently) I would make sure the place would sell quickly at $250,000 with your $25,000 rehab estimate. Once I have confirmed those numbers I would have offered 65% of ARV minus repairs. My offer would be $137,500. This is if I plan on wholesaling. If I am going to do the flip myself or buy and hold I can offer 70% of ARV minus repairs because I do not need to cover my wholesale fee so I would offer $150,000 in that case.
Just my opinion, but I skip extreme low ball offers, I think you loose more than you will ever get doing that. Plus, it is time consuming! I just say here is my offer, if I could have gotten it $5000 cheaper I really don't care because my numbers work the way they are. The seller is very happy and so am I. No time wasted and on to the next. Of course I do volume. If you are doing one deal every 6 months looking for that needle in a haystack than you have time for the back and forth. I don't !
Hope this helps,
Michael Mangham
MD Home Acquisitions LLC
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
I think you are right on Michael.
The one thing I don't like about low balling is when you finally get up to your highest offer, I believe the sellers feel you are playing them.
Not very professional in my humble opinion.
I made my highest offer of $142,580. Again, I don't believe the seller will get a higher offer than that which will send him crawling back my way. At least that is my hope.
Nevertheless, off to the next one.
Again Thanks!
Rodney
Start Where You Are! Use What You Have! Do What You Can!
Never let failure dominate you. Never let the mistates of your past Lord over you.
Go Confidently in the Direction of Your Dreams. Live the Life You Have Imagined.
- Henry David Thoreau
Website that get's results: www.jracrealestateinvestments.com
That's the way to do it. An intelligent offer and a fair one. On to the next while waiting for that egg to hatch. Repeat!
Michael Mangham
MD Home Acquisitions LLC
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
I made my highest offer of $142,580. Again, I don't believe the seller will get a higher offer than that which will send him crawling back my way. At least that is my hope.
Great Job, Rodney!
Wait for a week and contact them again with your offer, just to remind them you are serious and ready to deal.
This will also give you time to find and end-buyer, if you don't have one lined up already.
NO FEAR! MAKE THAT OFFER RIGHT NOW!!!
Contact US if you have any questions , need help or want to collaborate!
John Hamilton and Connie Donley
Cedar Creek Enterprises
Camino, CA/Chicago, IL
cedarcreekent (@) gmail (dot) com
(925) 784-2226
(925) 784-6004
New to this site. Have been reading a lot of the questions and replies. I will be doing the same (asking questions), as I forge forward to my first "deal". Hopefully, I will get a lot of positive, encouraging and truthful feedback.
Hi i just got my buyers list and sellers list together where do i find the paper work to seal these 2 together can somebody help? Thanks
Michael - I really like all your advice, you always have great straight forward advice that I've never seen else where.
Make me a blessing, make me a blessing;
Out of my life may Jesus shine.
Make me a blessing, O Saviour I pray,
Make me a blessing to someone today.
That was very nice of you to include those cool sites (for building lists). A big help to newbies like me. Just wanted to say thank you.
My father had an old saying, "you can never get more than you ask for". So, it is up to you to walk through the property and take notes with regard to any fix up items, or possibly personal property you want included. Then incorporate those items in your offer. You will know quickly how motivated your seller is by the reaction to the number of items you have asked for. If you are negotiating through a realtor, they will bring back either a signed contract, meaning you get what you asked, or a counter offer. In the counter offer the seller will state what they are willing to include in the purchase price. You will then need to decide if what they are willing to sell and at what price is satisfactory to you. If not, you can either walk away or go for another round of negotiations. If it is acceptable, you have a deal.
This is some grat information and encouragement for me Anita, thanks so much..Just put in a first offer, on "my" contract...Agent called and said that the offer had to be on a "Mississippi Realtor's contract" since it was listed w/ the MLS, also told me no assign, no potential renters to view until closing,and also, I could have it inspected now, but that after acceptance, it had to be done by a licensed inspector....I just told her not to submit it...Should I have just told her to just "submit my offer"!! as it was ??? It is a v.a. property...Have your information bookmarked, have enjoyed, appreciated, and learned from so many of your posts...Thanks again, Can't wait to be a superstar like you!!
Have a beautiful day..
Peace,Love and $$$
XO
Angie
Some people like to negotiate through a real estate agent and some don't. If the property is listed, then the seller will want their agent in attendance when the offer is made. Even if you have a real estate agent representing you, you can ask to go with the agent to present the offer. Some sellers will allow that and some won't.
If you are buying a FSBO then there are no agents involved and you will be dealing directly with the seller. If you offer is way below the asking price, it may be uncomfortable for you to tell a seller that they have their house priced too high. It helps, however, if you bring a few comparables so that you can show them that you are offering a fair price.
Two other points when dealing with FSBOs: 1) when you walk through, don't make many comments, especially complementing the sellers on the property because they will think you are in love with the property and may hold out. 2) While walking through try and get some info from them such as how long the property has been on the market, and what their plans are to see how motivated they are to sell. You can price this in your price.
Thanks for this info..
I'd like to know how any of you out here negotiate "Starting repairs before closing." What do you say to the seller?
Thanks,
Marizel
Control the Property & Include Escape Clauses In Your Offer
1. Escape Based on Condition at Inspection
2. Escape Based on Results of Feasibility Study
3. Escape Based on Financing
4. Escape Based on Repairs
5. Escape Based on Other Party Approval
Negotiate everything. You do this when you make your initial offer and later with counter-offers.Of course, being a Graziosian, you will get your price with your discount, but that is only the beginning. Look at the property and see what could be conveyed with the sale.
Valuable conveyances could include the washer, dryer, the drapes or blinds, the gas grill, or some of the furniture. I had a friend named Kimberly, that was a practicing REI, convey in the contract that the sellers 1967 Mustang and their Harley Motorcycle, go with the property. In another deal she conveyed that the spa stay with the house as well as the Italian marble hall table. SHE GOT IT ALL!
When appropriate ask for needed repairs or for the seller to cover part or all of your closing cost. YOU NEVER KNOW WHAT YOU CAN GET TILL YOU ASK! Think A Little Different...think outside the house!
NEGOTIATE EVERYTHING
1. Price
2. Financing Costs
3. Closing Costs
4. Possession Date
5. Conveyances
6. Ability to Rent Prior to Closing
7. Ability to Start Repairs Prior to Closing
8. Ability to Assign Contract
The key is to find out what is important to the seller, like I did with the 3 Houses. Offer them what they want and hen ask for what you want. If it doe not work, it does not work.
Great negotiators and great investigators (refer to May 28th assignment). They know that every transaction needs to be a win-win. You need to make make it a win-win or you for sure, but also look for the best way to make it a win for the other party.
Always be curious; always ask. Find out what is important to the seller and know what is important to you.
NEGOTIATE ANYTHING AND EVERYTHING
....boy! my fingers are tired, but I just had to gt it off my chest.
I Just want to say, it seems very hard but I will not give up all I will continue reading deans books till I get it. and I must say I am having problem finding an agent I think they scared of getting out of the box and see the light, I did ever thing deans said in the book, and I wait and wait and no reply I follow up with calls and e-mail and still nothing, and I am in new york and these agents act as if they don't know nothing, as soon as I speak to them they all willing to help and as I e-mail the things I need no reply.
I will not give up I believe God will lead me to the right one
Fear not for I am with thee be not dismayed for I am thy God I will strengthen
thee I help thee, I will uphold thee with the right hand of my righteousness
Isaiah 41-10 May the Lord be with us all
Lorna
The questions and answers are great. I love the quotes that are placed within this forum. They are so motivating and thought provoking. I feel on fire! overly charge as I read and learn more and more to get my business moving forward and obatining my goals. Thank you so much for being a wonderful source of information.
my question is where can i get a copy of a power of attorney form?The one in the student resources it don"t gives you the control to sell the property if the person is in agreement.To receive this form will help me make my first deal.Please help me if possible. Thanks in advance!!