Putting in an offer without walking through the property?

Question

Question to you more experienced buyers out there...

The back story... I'm working w/ a new broker - so the trust factor hasn't fully been established yet... And this would be the first time I'm purchasing something in this particular neighborhood.

She sent me a listing that looks like it could turn into a good rental property (a duplex) with some (cosmetic) work.  The price for the area looks good and the listing agent believes that it's priced to sell... So of course I drove out to see the neighborhood and exterior of the house for my self today and am comfortable with what I saw.  I told my broker that it looked like something I'd want to check out more but can't make an appointment to see the inside until Monday at the earliest.  Given that, she suggested that we make an offer contingent on viewing and accepting the conditional walk through of each unit since it is an 'as is' purchase.

Has anyone else done this before - is it advisable?  And would I be offering asking if we're at such a rush to offer, or can I still offer up numbers that I believe would make this purchase better?

Thanks in advance for the insight!!!

Aaron Mazzrillo · Answer

If your offer is contingent on seeing the inside, what are you scared of? What do you think you can lose beside some time? Almost every house I buy I don't go any further than Google maps to see. Walk thru it? I ain't got time for that!

Chris Webb · Answer

Agreed! An offer contingent on inspection is perfect. I think one of the most important things when making an offer is if the numbers work. If the market rents make sense for the purchase price my next step would be to do an inspection to figure out how much work is needed since I don't have the experience to estimate that on my own. The inspection was the first time I actually got inside both of our properties.

Offer the numbers that make sense and align with your business plan. If the asking price doesn't line up with what you need for the deal to work don't worry to much about your broker saying the price is fair. This early in a broker relationship they may not truly understand what you expect and as you said the trust factor may not be there yet.

I think almost every property is advertised as-is. However, both our properties we as-is and after our inspections we still negotiated a credit for repairs of 4k on one and 1500 on the other.

Account Closed · Answer

@Jennifer McElliott When I know enough about an area I will make blind offers. I think your broker is confident in this area. Your offer should have "out" clauses that protect you as well.

Aaron Mazzrillo · Answer

I've definitely purchased a few that were so bad all I could do was laugh. Cat urine has been the worst factor. I have 2 rentals that were quite horrid, but if you throw enough money at it, regardless of what it is, it can be fixed.

Burned, no. A rehab budget that was somewhat higher than expected, yes. All things are relative though. By not looking at any of them, I save hundreds? of hours a year. Maybe my budget on some is deficient, but on others it comes in surplus so it all averages out when you start doing a respectable volume. The most successful investors I know do not look at houses. They play the numbers game. I suggest you adopt this same strategy early on and get comfortable buying based purely on your numbers.

When I stopped looking at houses, suddenly I was buying a lot more of them. More time available to get offers out? Less second guessing myself? More focused on the numbers side of the equation than the emotional side? More time to work on my business instead of working in my business? Not sure exactly why, but I was doing 10 or so houses a year when I was going on absolutely time wasting appointments and talking to pretender sellers, but now I look at maybe 2-3 houses a year and on average I'm buying 25-30.

Dean Letfus · Answer

I always make offers sight unseen with an inspection clause. This avoids the hassle of getting all excited about the upcoming viewing and then finding the place sold the morning of your inspection.

I usually also make the offer at asking price and negotiate down once I inspect. My experience in the USA is that sellers will easily give up their price when you show them a list of issues they probably already knew about :-)

John Thedford · Answer

Your offer should always be contingent on an inspection. If you make an offer subject to that, using 5-7 days, you have plenty of time. When your inspector comes, you can also go through the units at the same time. Always give yourself a reasonable clause to drop the offer. Remember that they do have a timeline, so if it does not meet your needs then CANCEL offer to receive your EM back. The positive of putting in an offer ahead of others means yours may get accepted, meaning you get first shot at the deal. Put it in today!

Jennifer McElliott · Answer

Thanks everyone for the input.

I definitely feel more confident now about going ahead w/ the offer with the contingency.

@Emily Brozovic - when you put your offer in, did you offer the asking price then?  I'm guessing they won't be inclined to accept a lower offer w/ contingencies before they've even really had time to be on the market?

@Aaron Mazzrillo - have you ever been burned by not walking through the property??

Meghan McCallum · Answer

DON'T RUSH ANYTHING. But, know that it is YOUR investment. Make the offer contingent on an inspection. AS IS doesn't mean you can't add an acceptable inspection into the contact's contingencies. Is it vacant? Can you peek in windows? Are there tenants living there that you could ask what they like most or least about the units...they normally want to stay and want to tell you EVERYTHING that they hate...hoping that you the new buyer will come in and fix it.

If you want to test your broker's faith in the project, ask them to partner with you on the property. Listen to their answer.

Putting in an offer without walking through the property?

Most Popular Reply