How low is too low?

Which market are you looked in?

Its too low when your offer is rejected or when you don't get a return phone call for a counter-offer

Keep in mind that everyone respects someone that wants a deal but if you go into the 'insulting' phase, be prepared not to be taken serious or receive a phone call back

Can never say what the line is, but you'll know when you cross it

The market is in the Central Mountains of Colorado. Seller is in need of selling. The trouble is the market is not moving at all! House has been listed for over seven months. Given that is it Ok to take a leap of faith at 50% to get things moving or is that just naive?

Theresa

If it's that bad in your area, then why do you think you'll be able to sell it later for a profit?

Your reason for offering 50% less is because nothing is moving and ALL the houses have been on the market in excess of 7 months. This to me indicates that the 50% off is probably the real value.....no matter what the seller thinks his property is worth.

I have buyers in the waiting. A small profit to be made but a jumpstart to the process for me, the market. I agree that if they are not selling then the value placed on the property is not valid. The problem is figuring out what is a valid price.
Theresa

Make offers based on whatever formula you use. The adjust numbers accordingly based on the amount of repairs needed and your profit. It all depends on what you plan to do with the house too. What I said above was asuming you were wholesaling the house. That offer can still fly even if you were not wholsaling the house. Its something you have to gauge. Remember it is an offer, so they accept or reject. Some people will be offended, but..... you move on and even follow later with them. Remember the key is to find motivated sellers. I now know what a motivated seller is and how esay it is. They call you telling you to take my house. Literally no BS. Happened this weekend, lady in foreclosure called, from a letter I wrote her. Telling me everything, and said I will geive you my house for the balance, and said she will deed me her house. Met with her Saturday, got it under contract have a buyer interested who I plan to sell to for 60k. So I will make 5k if all works. This lady passed my info to her frined who needs to sell a house too. In the porcess a guy called me Sunday from a ad I placed on Craigslist with interest. Gave him the address, he drove to a look at it and said the problem was not enough parking, he has 3 cars. I asked what are looking for, where,and how much, I told if I find something I will call you. He says great just give me a call. He says he has money to lease a house. So I got retail buyer in the process. Said all this to emphasize that this is real. By the way I put this deal together with NO MONEY DOWN, not even a dollar. I know of someone else who is having trouble with his house and going to foreclosure eventually. Spoke with him a little, but I am going to give him 1 of my letters and leave it all up to him to call me wanting to give me his house.

Sorry for the long post ladies and gents.

I prefer to make offers based on profit potential, not percentages. If an investor takes the time to analyze all of the parts of the deal, like the rehab, closing costs, holding costs, and commissions, they can determine an asking price based on an acceptable profit margin of, let's say, $25,000. Then if becomes market forces that dictate if it's too low. If another investor is willing to do the project for a $15,000. margin, you will be out bid.

You just need to be aware of what other buyers are willing to take so you can stay competitive. Networking will help you figure that part out.