Made an offer and seller is claiming there are multiple offers....

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Made an offer and seller is claiming there are multiple offers....

Ryan Dossey
Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes

We found a guy offering two turnkey properties as a package deal. He is asking 50k which honestly we could pay 50k and it is still a stupid deal. We would cashflow nearly 500.00 a month off of the two properties. He said his bottom was 47k. We offered 45k. He is now claiming that he has multiple offers and is asking if its our best. I have heard to never bid against yourself.... What would you do? 

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Account Closed
Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
12y

If it is a great deal at $50k and he said his bottom was $47k, why wouldn't you at least up your offer $2k?  I am not a big fan of playing games during negotiations, but unfortunately it is part of the game.  Do you really want to chance giving up $500/month cash flow for a couple grand just so you don't get outplayed?

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  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    12y

    That's common tactic and he may have another offer or he may not.  The other offer might be $30k or it might be $50k or it very likely doesn't even exist.  Personally I'd stand put with my offer, it really sounds like in this case and with the way it played out the seller is fishing to see if he can't pull a little extra out of you.  If you REALLY want/need the deal then come up a bit but personally I'm not going to play games and I'll just move onto the next one if the numbers don't work out.

    2Reply
  • Elizabeth Colegrove
    Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
    12y

    It really depends on your area. I can tell you where I live multiple offer are the norm if the house is priced right. The key is to know your numbers, the market and if your willing to lose the house over 2k. At the end of he day the key is to be okay to sleep.

    1Reply
  • Account Closed
    Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
    12y

    If it is a great deal at $50k and he said his bottom was $47k, why wouldn't you at least up your offer $2k?  I am not a big fan of playing games during negotiations, but unfortunately it is part of the game.  Do you really want to chance giving up $500/month cash flow for a couple grand just so you don't get outplayed?

    7Reply
  • Christopher Gilbert
    Investor · Pflugerville, TX · Member since 2014 · 152 posts · 95 votes
    12y

    Where we are at multiple offers are the norm on properties with good numbers.  I have seen so many people throw away good deals just because they had a number stuck in their head and would not bump up their offer by a thousand or two.  Most sellers just want you to come up a little bit so they can say they negotiated a better deal.  Some people pass on so many deals by the time they pull the trigger the market has changed and they missed out.

    Legally if a realtor is involved they are not allowed to use the multiple offer situation unless there are really mutliple offers but they also do not have to disclose anything to you.  Even if the other offer is $10k lower than yours they still throw out the multiple offer scenario to try and get you up some.

    If the numbers pencil out and are acceptable to you at $50k then anything under that is a better deal so take it.  Finish the deal and move on to the next one.  Five years from now you won't care if you paid a few thousand more than you wanted, you will be counting all the rent money that you have collected.  Think big picture and do not throw away dollars while tripping over pennies.

    1Reply
  • Ryan Dossey
    OP
    Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
    12y

    Thanks guys! This particular property isn't listed on MLS we found it through our DM campaign. So I personally think that he is fishing but at the same time I'm not going to lose the deal over 2k. Good to know for future reference!

    3Reply
  • Paul S.
    Investor · Valparaiso, FL · Member since 2014 · 374 posts · 76 votes
    12y

    @Ryan Dossey  I agree with @Patrick L. maybe bump your offer to 47K and tell him your best and final just make sure the numbers will work for you.

    0Reply
  • Elizabeth Colegrove
    Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
    12y

    @Ryan Dossey 

    Don't forget that 5k less than 50k is 10%. That is a huge number to a seller especially if you found him direct marketing and he gave you his bottom line at 47k.

    1Reply
  • Corey Demuth
    Real Estate Agent · Tampa, FL · Member since 2009 · 456 posts · 123 votes
    12y

    In my area this is a common tactic. When we were buying our home, I remember several deals where we made offers that were about 4% off the asking price and the realtor would come back and try to tell us that they had received another offer for more than that.

    I told them "then go ahead and sell to them" and that was that. Out of curiosity I looked again on the MLS months later (after we had already bought and closed on a different place) and - in literally every single case - those properties were still on the market. Right, I'm sure they had bidding wars and every single one fell through...

    0Reply
  • Ryan Dossey
    OP
    Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
    12y

    To tell the truth if he was just wanting more I would be cool with it. Just come out and say it. No need to get all "creative".

    0Reply
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    12y
    Originally posted by @Ryan Dossey:

    We found a guy offering two turnkey properties as a package deal. He is asking 50k which honestly we could pay 50k and it is still a stupid deal. We would cashflow nearly 500.00 a month off of the two properties. He said his bottom was 47k. We offered 45k. He is now claiming that he has multiple offers and is asking if its our best. I have heard to never bid against yourself.... What would you do? 

    Whenever I get a Realtor or anyone else say "Highest and best"

    I respond by saying "I wish the highest bidder all the best" lol

    There are many deals out there. Its not worth paying a penny more than what you think you should.

    Just my opinion and strategy.

    Thanks

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    4Reply
  • Elizabeth Colegrove
    Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
    12y

    I totally agree with the above responders. Many people will use this as a resort to get the best offer. I would not walk away but come back with your highest. That being said please know your marker. Central Valley has multiple bidders all the time! Our first house had 3 with 8 backups! Our friends house in San Diego had 7 offers in a 3 day period.

    0Reply
  • Derrick Craig
    Memphis, TN · Member since 2013 · 969 posts · 524 votes
    12y

    @Engelo Rumora 

    LOL!!! Now that was a good one!! I will have to steal that line from you!!

    TOOOOOO FUNNY!! I am still cracking up over here...

    1Reply
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    12y
    Originally posted by @Derrick Craig:

    @Engelo Rumora 

    LOL!!! Now that was a good one!! I will have to steal that line from you!!

    TOOOOOO FUNNY!! I am still cracking up over here...

    haha

    Thanks Derrick,

    I believe that if your firm with your offers eventually sellers (wholesalers) and Realtors will figure out that you play hard ball and they won't bother mucking you around and trying to pinch pennies.

    We know our numbers and what we can and can't pay.

    So its a no BS quick way of either buying or moving onto the next deal.

    Thanks and feel free to use it

    Disclaimer: No pending patents on the saying haha

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    0Reply
  • Ryan Dossey
    OP
    Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
    12y

    Me being stubborn..... We raised our offer by only 1k told him he could meet us in the middle or we would walk. He called last night and accepted our offer. We drove over and signed all of the paperwork. Looks like I just bought my first 2 rental properties!

    9Reply
  • Account Closed
    Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
    12y
    Originally posted by @Ryan Dossey:

    Me being stubborn..... We raised our offer by only 1k told him he could meet us in the middle or we would walk. He called last night and accepted our offer. We drove over and signed all of the paperwork. Looks like I just bought my first 2 rental properties!

    Awesome news.  Congrats

    0Reply
  • Ryan Dossey
    OP
    Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
    12y

    @Account Closed Thank you! Its nerve racking but exciting at the same time. The benefit is we could easily sell them for more if something comes up. 

    0Reply
  • Account Closed
    Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
    12y

    @Ryan Dossey 

    Playing Texas Hold'em was a hobby of mine for many years, so I totally understand the nerve racking/excitement you experienced.  There are definitely some similarities between poker and real estate negotiations. 

    0Reply
  • Ryan Dossey
    OP
    Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
    12y

    That's a very fair comparison. I play 5 card with some guys pretty often. 

    0Reply
  • Brian Tome
    Attorney · Worton, MD · Member since 2014 · 276 posts · 195 votes
    12y

    Congratulations Ryan!  Good work.  Your success will be a direct result of your hard work and common sense.

    1Reply
  • Raul Martinez
    Real Estate Investor · North Miami Beach, FL · Member since 2014 · 12 posts · 13 votes
    12y

    Bottom line, when a seller is asking for your highest and best and claims to have multiple offers, IMHO, it is best to know your numbers, submit your best offer and your outcome will not fail you, either way.

    I've learned from experience that when a seller says they have multiple offers, they are often times stretching the truth and by submitting my highest and best offer - by following my numbers - I am usually awarded the contract.

    1Reply
  • Christina R.
    Investor · DMV Maryland · Member since 2013 · 867 posts · 370 votes
    12y

    Congratulations Ryan - I'm glad it went in your favor.  It could have easily gone the other way.  if I'm reading everything right, this is a great deal at 50K - why risk losing it? Just act like it's killing you to pay 47K which he told you is his number and do the Quarles thing (with the "I'm not saying I could buy this at 47K but If I could"  and just shake your head and sigh a lot. . .)  and get it done without all this stress!!   I mean if he wanted 47K you were willing to lose $500/mo in cash flow over $2k, which equals 4 months of cash flow.  If it was 4 years to recoup, I see that.   

    I'm just trying to understand this.  

    A turnkey property at 25K??  I know, I'm outside of DC so my market perspective is skewed.     Why is he selling them?

    1Reply
  • Ryan Dossey
    OP
    Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
    12y

    @Brian Tome thank you very much!

    0Reply
  • Account Closed
    Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
    12y
    Originally posted by @Ryan Dossey:

    That's a very fair comparison. I play 5 card with some guys pretty often. 

    I miss playing but I just don't have the time for it anymore.

    0Reply
  • Ryan Dossey
    OP
    Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
    12y

    @Christina R. I know I was being more stubborn then I should have been. I've done sales all my life and have a hard time being the one who doesn't "win". Call it pride lol. ;)

    The guy is a contractor he actually owned 6 homes along with some land. He is wanting to get into the flipping game and wanted to build up some funds to do that. He called off of our DM campaign. We actually are looking for a property to wholesale to him. Its going to be a really good relationship. He is actually a licensed contractor and charges only $25.00 an hr. So we plan on using him a good amount for small work. His wife is a Realtor and was mad that he didn't list them because she knows he could have gotten more. 

    One of the units is actually under market value for the area so our cashflow will honestly be closer to 600.00 if not 650.00. The thing that made this kind of a no brain er is how cheap the mortgage will be on 36k. One property rented is enough to cover the expenses. The properties are actually in a really quiet area. Most of the homes on the street are owned by another investor as well so that's good. 

    0Reply
  • Account Closed
    Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
    12y

    The seller will be sleeping on the couch for a couple of days!

    0Reply
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