A disappointed newbie in buying SFH

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A disappointed newbie in buying SFH

Flora Granter
Magnolia, TX · Member since 2016 · 31 posts · 5 votes
Past December I made a full price offer on a single family house on its first day of listing. The house was in perfect condition. Our offer agreed to close the house by the year end, as my realtor advised that closing date last year will make the offer more attractive since the seller does not have any tax for 2017. Unfortunately, there were multiple offers and our offer was not selected. I found out from database that the house was sold less than what I offered, and it closed today Jan 5th. I was rather disappointed with this. The feedback from the seller's agent today is that they wanted a home owner not an investor. Any advice/insights from seasoned investors? Do you ever encounter anything like this? What lessons can I learn from this experience? Is this real reason home owner vs investor that I did not get the house? A disappointed newbie
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Christopher Phillips
Real Estate Agent · Garden City, NY · Member since 2016 · 3k+ posts · 1k+ votes
9y
Flora Granter Yes. It happens. Many times sellers are concerned about who buys their house because they want someone that will live in the home. Not rent it out. Or they would rather have someone that plans to live there do the renovations. It's also possible that a young couple or someone they knew made a good case for wanting the home. It's not always about maximum bid. Sometimes it's about the story.
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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y

    How much did you offer and how much did it close at?

    Sometimes it happens. People are emotionally attatched to their homes and want to see it go to another family.

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  • Flora Granter
    OP
    Magnolia, TX · Member since 2016 · 31 posts · 5 votes
    9y
    Russel, I do not know how they figure out I am an investor. It asked for $150K and it closed at $149K. As far as I know, we were the first offer. Just disappointed.
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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y

    $1,000 difference is virtually the same. To distinguish your offer I'd use an escalation clause, and at this price point I'd consider escalating  $3,000 to $5,000 over best offer. Someone might leave $1,000 on the table, but they'd be a little more hard pressed to leave $5,000.

    [email protected]301-893-4635Podcast Guest on Show #192
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  • Christopher Phillips
    Real Estate Agent · Garden City, NY · Member since 2016 · 3k+ posts · 1k+ votes
    9y
    Flora Granter Yes. It happens. Many times sellers are concerned about who buys their house because they want someone that will live in the home. Not rent it out. Or they would rather have someone that plans to live there do the renovations. It's also possible that a young couple or someone they knew made a good case for wanting the home. It's not always about maximum bid. Sometimes it's about the story.
    2Reply
  • Aaron Lovett
    Realtor · Smyrna, TN 37167 · Member since 2013 · 248 posts · 147 votes
    9y

    Hi @Flora Granter, 

    It happens - maybe more often than anyone realizes.  The average homeowners form an emotional attachment to their home, it's normal.  Here's a theory: I think sometimes they want that emotional attachment to transfer to the new owners. If they hear that an investor is interested, then it's all business - and it's possible that their real estate agent hasn't prepared them to think that way.

    My question for your agent (or for you if you handled this on your own): how did they know that you were an investor?  I'm not at all suggesting that you should lie, and if a company name was on the paperwork then the answer is obvious.  But, if you could keep that "investor" card a little more out of sight, it might not be an issue.

    If you are going to present yourself as an investor, try to find out what the seller's motivation for selling is, and respond to that.  If emotional attachment is an issue, or if the move is unwanted but necessary, the sellers agent might be able to speak to some of that, provided they seller has given permission.  Their agent probably knows how attached they are to the property, and might have suggestions for how an investor could win over the buyers.  Some things that come to mind are adaptations to some things buyers might do in a competitive bidding environment: 

    • Submit a letter of explanation to the buyer's agent explaining how you love the house and will find the perfect tenants/next owners/etc.
    • Be the first and best offer
    • Present a no-strings-attached gift with the offer

    I'm curious to hear other suggestions.  

    Personally, I wouldn't worry too much about it beyond a little discussion here on BP.  You aren't going to get every deal, but you'll get plenty if you don't give up.

    All the best, 

    ~~Aaron  

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  • Flora Granter
    OP
    Magnolia, TX · Member since 2016 · 31 posts · 5 votes
    9y
    Russel, I own one property in the same subdivision. I know that the full price offer is already slightly higher than the market value. I would not be willing to pay $5K more. Plus you would think the December market is supposed to be a slower season, right after Thanksgiving. Sigh.
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  • Naima Cakirlar
    Investor · Hauppauge, NY · Member since 2016 · 9 posts · 1 vote
    9y

    You should be very proud of yourself. As a newbie you were able to go out and make an offer, run your comps get an Arv and do all the steps it takes to go after a property. Hooray. You could choose to celebrate all these steps that you have conquered. You are not in control of the homeowners decisions. In Fact you should respect it and move on.  The next deal is waiting for you, so bring a positive mind and disposition and tell us about your success. Do not feed into the things you can not control. All these experiences sharpen your sword so when it time you will be ready . Happy New Years 

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  • Flora Granter
    OP
    Magnolia, TX · Member since 2016 · 31 posts · 5 votes
    9y
    Aaron, my offer has my personal name. Other than it is an Asian name, the offer was rather standard without any disclosure of any use of the property. I have a seasoned agent representing me. I would be more disappointed if she slipped her tongue when dealing with the seller agent. Oh well...
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