There is a turnkey listing in my market and my max purchase price is list price for the home. This is based on sold comps and rental comps in the area. The problem is that it is not fully renovated yet and there is a open house in two weeks (when it is completed). I obviously have not physically seen the property yet (besides driving by it). I would like to take the best course of action that will increase my chances of purchasing the home.
1. Contact the listing agent and see the property before the renovation is complete. If I approve and there are no curve-balls, put it under contract before it is completed with the contingency that it will be completed as stated. (I don't know if this is possible, but it sounds good).
2. Wait and show up to the open house with pre-qualification letter in hand and put an offer on the property.
My only fear when seeing the listing before the renovation (option 1) is that they will still hold the open house. And at the open house they will tell other buyers that there is a full price offer is on the table with hopes that the offers will go over their list price. If I make an offer on the home before the renovation I would need the contracts signed before the open house. I don't want to reveal my hand to early.
Whats my best course of action in this situation?
I am in contract with a turnkey property and have yet to see the inside pictures. I have found old pictures of the inside online and will compare to the new pics when I receive them later this week. I made my contract subject to receiving pictures, scope of work, inspection, home warranty, rental credit (since I would rather have my own management company place a tenant that I approve of), ability to get financing, and 2% concessions towards my closing costs. The other suggestion I have is to ask for a 3 week inspection period so that you have a chance to back out during that time (or extend if rehab is not complete). Put as little money for the option contract as possible. I put $1k down on mine ($63k purchase) but know that with all the contingencies I have I could back out if needed to (though I don't plan to as I want my deal).
In your situation you should lock up the deal if you really want it. At the end of the day if the deal is fair to all sides I don't think it is a big deal if you try to lock it up now.
Make an offer with contingencies removed after completion but before the open house. Experienced sellers won't hold out on a strong offer that's a done deal and risk losing it for a few extra dollars. Rehabbers like nothing more than closing within a couple weeks of completion.
If you're trying to backdoor this and get it on the cheap before adequate exposure--particularly if your market is competitive--you won't get very far if the listing agent is any good and the sellers are confident of their asking price.
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