How To Make Offers That Get Accepted In Real Estate Investing

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by: simon87
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Word Count: 556
Date: Mon, 7 Feb 2011 Time: 12:49 PM

 The biggest challenge facing most real estate investors is making acceptable offers. When investing in real estate, buying properties is the basic foundation of any real estate investing business.

 You cannot make any money unless you buy properties.

 Here is how to make offers that get accepted.

 The type of property you are buying determines the offer you make.
1)    Buying from motivated sellers
 It is important to have the following pieces of information if you buy houses from motivated sellers:

a)    Market Value
Do your due diligence to find out conservatively how much the house would be worth in a perfect condition.   You must have this information before you can make any offer.

b)    Mortgage balance
You must get this information before you can make an offer.   A seller who is not willing to disclose this information is not motivated enough. Move on to a motivated seller.

The mortgage balance must allow you to buy the house and still leave you with a profit.   You must own it free and clear and make a profit.

c)    Repairs needed
Based on the information given by the seller, you can estimate the repair costs even before you drive to see the house.

 You must know how much you need to fix up the house before you can make an offer. Of course I prefer to see the house myself.

d)    Asking price
 Taking into account the 3 pieces of information above, if the owner is asking for too much, you might never make it work.

 The market value, mortgage balance and repairs must be taken into account in a good asking price. You can then make an offer based on the asking price.  If at all the mortgage balance and repairs allow you to make an offer that can leave you with a profit, by all means do it.

 Even though it is necessary to consider the seller's needs, no offer can be too low.   If they face foreclosure, their asking price might be to just walk away from the property, or they might need some moving cash.

 It makes no sense making an offer when mortgage balance is so high you cannot make a profit.  Drop it and move on to the next one.

When all is said and done, the only bad offer is the one you have not made.   Always make all the offers that make sense to you.   You'll be surprised how many get accepted.

2)    Buying foreclosed properties
 The asking price and repairs are the only important considerations to make in this case. The bank is trying to offload their inventory and are willing to negotiate.

In today's market, most REOs will be listed below market value.   If your numbers look acceptable, by all means make an offer.

 Remember to make your offer lower than the asking price.

About the Author

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