Making Investor Offers

8 Replies

Long time reader...first time poster   :)

I am a real estate agent. I am looking at making offers in the investor arena. However, I am a bit nervous about making offers at lower prices.

Do y'all call the listing agents before you make the offer? Every Offer?

Do y'all worry about what the listing agent will say when they receive a "low" offer? 

Any encouragement/advice about making these types of offers would be greatly appreciated.

Thanks,

Brandon

Originally posted by @Brandon S. :

Long time reader...first time poster   :)

I am a real estate agent. I am looking at making offers in the investor arena. However, I am a bit nervous about making offers at lower prices.

No need to be nervous.  You do the math, and the numbers will tell you what is an appropriate price to pay for a cash-flow (note: it may be zero, in which case, you do not pen the offer).

Do y'all call the listing agents before you make the offer? Every Offer?

If you mean, "Do I give the agent a heads-up that I'm putting in a lower offer than retail" ... no, we just prepare out offer and send it along.

Do y'all worry about what the listing agent will say when they receive a "low" offer? 

No.  The offer is for the vendor, not the listing agent.  The agent has a duty to take the offer to the vendor.

Any encouragement/advice about making these types of offers would be greatly appreciated.

Just do the math and make offers which make sense and cents (or, better, dollars).

Updated over 3 years ago

BTW: Welcome to BP!

Updated over 3 years ago

BTW: Welcome to BP!

@Brandon S.  .  I do agree that an analysis needs to be run before putting the offer together so you know what to offer.  

Where I will differ (and it's probably because I don't only work with investors) is the process by which the offer is made.  I would always call a listing agent prior to submitting an offer, I just think it's the courteous thing to do.  My broker had an offer go straight to his spam the other day that he didn't even see until 3 days later.  If he new to look out for it that wouldn't have happened.  If you're going to submit a ton of offers this may not work but I would always ask the listing agent if the offer can be presented to the seller in person.  No listing agent will represent your client as well as you.  We see offers get accepted all the time that aren't the best terms but because the seller likes the buyer they go with them.  

Hope this helps.  

Good luck!

@Brett Synicky  

I probably wasn't clear in my response.  I do not tip the listing agent that I am sending in a low offer.  I do typically tell her/him that an offer is coming ... or, if I am using a buying agent, my agent will tell them.

I do agree with asking to present the offer in person.  Though my experience has been that this works in the commercial space, but not in residential property sales as the vendor's agent tends to be over-protective (or insecure) and does not want you dealing directly with the vendor.  I can understand the reasoning behind this if the vendor is John & Jane Public selling their, or Mom's, house, but even in this instance, they should ask the vendor if they are comfortable having a dialogue directly with the buyer.  If the vendor is another investor, then I typically prefer the agent allow a face to face meet.

Originally posted by @Roy N. :

@Brett Synicky  

I probably wasn't clear in my response.  I do not tip the listing agent that I am sending in a low offer.  I do typically tell her/him that an offer is coming ... or, if I am using a buying agent, my agent will tell them.

I do agree with asking to present the offer in person.  Though my experience has been that this works in the commercial space, but not in residential property sales as the vendor's agent tends to be over-protective (or insecure) and does not want you dealing directly with the vendor.  I can understand the reasoning behind this if the vendor is John & Jane Public selling their, or Mom's, house, but even in this instance, they should ask the vendor if they are comfortable having a dialogue directly with the buyer.  If the vendor is another investor, then I typically prefer the agent allow a face to face meet.

My two centavos? As an active Listing Broker and Wholesaling Realtor® I make offers on MLS property all the time. If you are dealing with fixup type property, let's just call a spade a spade.

Oftentimes, the one who is brave enough to say "The Emperor Has No Clothes!" is often the one who gets the business. The problems with MLS property that would cause you to flip them (the 3D Effect... Disease, Death, Divorce) or M&M's (Mistakes and Motivation) generally are known to the parties.

As a buyer, your determinations are based upon what you would pay.  The rest, as they say... is irrelevant.

Good luck, and may I recommend using "The Pawnshop Presentation?"

I have always found that if I am going to be making an offer that is substantially lower than a list price I will call the realtor and talk to them about my "buyer" and their reservations with the property and rehab costs, etc. I will typically try to start a dialogue to get an understanding on the seller's motivations and if there are any other offers on the table. 

You don't want to waste your time or the other realtor's if there is no chance of a consideration to your offer. However like the others have said if you are going to be submitting a bunch of offers I always say "well look, let me shoot it over to you anyways and if this goes highest and best or another offer is accepted, keep me in as a backup." You will be surprised how many backup offers do come back. I can probably account for 8-10 deals that have come back months later in an email: Your offer is accepted!

If you are an investor, certainly there's a certain mentality you have to adopt to be successful- I have come to realize, and it's a constant conscious process, that IF I DON'T FEEL GUILTY ABOUT MY OFFER, sometimes (not all the times) it probably isn't low enough. remember, you make money when you buy. That said, the most i'd tell the other agent is that my offer is coming, that is cash, and some reaffirmation of my serious intent to close once (not if) my offer is accepted. Also remember it's a numbers game, so keep submitting away and know exactly how much flexibility (price wise) you have before you have to walk away from a deal.

Des

When you make the offer, have the listing agent write the offer. it will help you.

Thanks for all the advice! Y'all are awesome!

I submitted an offer over the weekend and the listing agent came back and was very unprofessional about the price on the offer. He said it was a waste of his time to even open the email.

I need to work on my mindset and that I shouldn't take things personally. 

I'll keep submitting offers so I just need to let what others say roll off my back.

-Brandon

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