Real Estate Investing Basics

The Two Best Weeks to Make an Offer on a House

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The time is now.

Don’t miss it.

December 3rd to December 14th, 2012 is your time to make lower than usual offers. If you can get your bids in by December 14th, you still have time to inspect, check title and close by December 31st. At this time of year, the banks are anxious to get their extra inventory off their books. If you can make cash offers, many banks will come down in price if you can close ASAP.

Another good thing is that most end users and investors are distracted and really busy with end of the year job projects, holiday plans and gifts to buy. So if you can spare the time to up your number of bids in the next two weeks, do it.

When making end of the year offers, there a number of strategies you can use to ensure successful closings.

Six Tips for Making Offers At the End of the Year

  1. Come up with a game plan to carve out time to look at the numbers, visit properties and make offers in the midst of all the other December pulls on your time.
  2. Make cash offers only. Get partners if you need to, but cash offers is what makes a difference to banks in December.
  3. Close by December 31, 2012.
  4. Keep you inspection period short if you can. I make 5 day inspection periods, but you need to be able to sleep at night so do what’s right for you.
  5. Reoffer on bids that were rejected earlier in the year.
  6. Plan ahead. Put a reminder on your phone or calendar for next November to start considering your December 2013 bids.

By the way, I kept this blog short because, guess what?

I’m busy out making bids.

Leave me a comment below and let me know your goals and plans for the next two weeks!

Photo: John Morgan

    Sharon Vornholt
    Replied about 7 years ago
    Great points McKellar. The banks really do want to get the houses off the books at this time of year.
    McKellar Newsom
    Replied about 7 years ago
    Hi Sharon, Thanks for the nice comment. December is a great time to buy! mck
    Brandon Turner
    Replied about 7 years ago
    Thanks McKellar – thanks to this article I went and drove by a house that was recently listed – and hope to get inside and make an offer later today! Way to keep me motivated!
    McKellar Newsom
    Replied about 7 years ago
    Hi Brandon, I’m glad I could help motivate you! Did you get inside the house? Did you make an offer? If you wait until late December, it’ll be hard to close by December 31st. Thanks. mck
    McKellar Newsom
    Replied about 7 years ago
    Hi Brandon, I’m glad I could help motivate you! Did you get inside the house? Did you make an offer? If you wait until late December, it’ll be hard to close by December 31st. Thanks. mck
    McKellar Newsom
    Replied about 7 years ago
    Hi Brandon, I’m glad I could help motivate you! Did you get inside the house? Did you make an offer? If you wait until late December, it’ll be hard to close by December 31st. Thanks. mck Reply Report comment
    Steve Toohey
    Replied about 7 years ago
    Spot on. Wrote one this morning for the very reasons you cited!
    McKellar Newsom
    Replied about 7 years ago
    Hi Steve, Great news! Have you gotten a response yet? Thanks. mck
    Ryan Bowman
    Replied about 7 years ago
    Great advice Mckellar!
    McKellar Newsom
    Replied about 7 years ago
    Hi Ryan, Thanks for the comment! How are things going out in Akron these days? Are investors trying to buy before the year end? Are the banks accepting lower offers? How is the real estate market there in general? Thanks. mck
    McKellar Newsom
    Replied about 7 years ago
    Hi Ryan, Thanks for the comment! How are things going out in Akron these days? Are investors trying to buy before the year end? Are the banks accepting lower offers? How is the real estate market there in general? Thanks. mck Reply Report comment
    Suzy
    Replied about 7 years ago
    Love it, love it, love it. 10 offers in the past 2 days…..it’s all a numbers game right? I have also been seeing MASSIVE price drops in the last couple of weeks with properties that have been on my radar for the past 6 months going under deposit after some massive bidding wars – mostly going to Owner Occupants who now see the new price drop as their way of “justifying” all the work that has to be done to their future “dream home”.
    McKellar Newsom
    Replied about 7 years ago
    Hi Suzy, Great to hear that you are bidding like crazy. Did you land any deals already? I agree that it’s a numbers game. The more offers you have out there the greater chance of landing one. You have seen massive price drops? Where are you located? We have had some price dropping but I wish it were massive. Thanks. mck
    Suzy
    Replied about 7 years ago
    Love it, love it, love it. 10 offers in the past 2 days…..it’s all a numbers game right? I have also been seeing MASSIVE price drops in the last couple of weeks with properties that have been on my radar for the past 6 months going under deposit after some massive bidding wars – mostly going to Owner Occupants who now see the new price drop as their way of “justifying” all the work that has to be done to their future “dream home”. Reply Report comment
    Jason
    Replied about 7 years ago
    Good tip, made me think of this though Many companies fiscal years don’t end on 12-31 a quick way to determine a company’s fiscal year is to bring up a stock quote for the company and to choose to view its annual income statement. The heading for the statement will usually show the last business day of fiscal year over which its income is being reported. Not sure if this will be helpful or not, depends on the bank that owns the house. Another thing is that most companies also care about their quarterly performance, which is announced as news and affects stock price, therefore probably affects orders from the top, so if you can see when their quarters land, this may be able to help you as well in some situations.
    McKellar Newsom
    Replied about 7 years ago
    Hi Jason, Good point about fiscal year ends. It would be great actually to have a list of the major banks and their fiscal year ends. You could target those banks 1-2 months before their particular year end. I have certain banks that I see dumping properties more than others. I’ll check on their fiscal year ends first. Great comment. Thanks. mck
    ThosMN
    Replied about 7 years ago
    Note that this probably won’t work with Fannie Mae properties (though you never know, try it!). They play by their own rules, usually keep dropping the price weekly, monthly, etc. til someone buys it for that price. I know they’re supposedly private, but they seem to act like a govt agency, and don’t care about quarters ending or revenue projections, they’re happy to hold it for years if need be. I’ve bought some that way recently, for half or less of original list price, months or even years after originally listing it..
    McKellar Newsom
    Replied about 7 years ago
    Good point. I don’t think HUDs care as much about quarters and year ends either. When you say you bought some “that way recently”, do you mean waiting out for the price to drop? There is definitely a correlation between waiting and return. Thanks. mck
    Brad E
    Replied almost 7 years ago
    Great article. Near the end of November, there was a fresh to the market bank REO six-unit that I had offered 62% of list price, which they countered with 89% of list price, and the agent firmly insisted I’d never be able to get them down any more. I re-countered with my original 62% and walked away. On Dec 13, I read this article while at my day job, and thought, “WHY NOT?” I immediately called called the list agent up and said, hey, I’ll bump my offer up to 68% of list price cash no contingencies, and we can close by the 28th so the bank can get it off their books this year yet. If they’ll do it, we’ll get the paperwork done today. He still insisted they wouldn’t come down lower than 89%, but agreed to call them with my verbal offer (small local bank). 15 minutes later we had a verbal agreeement, and two hours later we had buyer and seller signed purchase agreement, for 68% of original list price after only 3 weeks on the market. It worked! We closed on the 28th, and the existing tenants seem on board with a 40% rent increase.
    Sharon Vornholt
    Replied almost 7 years ago
    Way to go Brad! That’s awesome they agreed to the rent increase too. I’m still scratching my head over that one. Sharon
    Sharon Vornholt
    Replied almost 7 years ago
    Way to go Brad! That’s awesome they agreed to the rent increase too. I’m still scratching my head over that one. Sharon Reply Report comment