Putting offers in on properties - Be 1st or be last

30 Replies

I've been having a hard time finding a property to purchase. As soon as I seem to find a decent property there are multiple offers on it. I've ended up putting in the offer anyway, but nothing has come out of it yet. I remember hearing Brandon Turner say to try to be the 1st offer or the last offer (either on the podcast or a webinar). I'm always trying to be the 1st offer, but it just hasn't happened yet. How can you be the last offer? If you wait too long before submitting the offer, I'd assume you'd miss the window and the seller will not accept new offers - right? Can anyone shed more light on this? 

Thanks

I remember what you're talking about from a webinar a few weeks ago. What he meant was that if you look at a house that's been sitting for 6 months, they probably had some offers on the front end that they didn't take that have since expired, and those investors have moved on to something else. So you come in 6 months later with a similar (or lower) offer, and suddenly it looks a lot better to a seller that's been sitting on this property forever.

I have a house that I made an offer on that was rejected because, according to their agent, they could call 3 or 4 investors they knew and do $5-10k better than my offer. Fair enough - I told them to go ahead and call. About a month later, they came back to me and asked if they could take my original offer. Turns out the other "investors" couldn't seem to find enough cash to make the deal happen. 

I am not sure about your situation but I can tell you that I've put in offers at what I thought was my best case scenario. Then when/if I get countered depending on the counter I'll give up to my max number. If it's a best and final for example, I have a number that after that point the deal no longer works so I submit that. If they want to counter, I'll walk it because I'm at my max and it's an investment not a personal residence.

You can make  your deal more enticing by changing things like the down payment, closing time, contingencies, closing cost etc... it's not always coming down to price.

Also, I have bought a house that I put in a *lower* offer on later. IE I offered $X, they declined, and several months later we closed at a lower figure. 

I once was 13 out of 14 offers, I offered like 50k over asking and paid closing costs. I think the house closed at like 130k over asking all cash, nothing I would of done would of even come close to matching that haha. It made absolutely zero sense from an investment standpoint, but made me really really really question my valuation haha.

Thanks for the comments. It makes sense if the house takes a long time to sell, but what if it's a hot market and the property has multiple offers right off the bat? Is being one of the later offers more advantageous? 

Thanks Matt. I didn't think about the other ways in which the offer sounds good - down payment, closing cost/time, etc. I should also always get my worst case price to know exactly when of walk away. So far I've never got a counter though.

Not to be coy, but It pays to be the only offer. In a hot market like we are in now, you have to invest money in marketing so that you are dealing directly with a motivated seller and no other offers are in play. I got so tired of "highest and best" situations that I pretty much don't even bother with offering on listed properties anymore. Any time there is a good deal on the MLS, other investors are all over it as well.

So Owen, have you been able to acquire any good deals through the MLS (during a hot market)? Or are all of the deals your able to get through direct marketing? I've mainly been trying to get deals through the MLS, but it's frustrating now. Whenever I do find a good deal there are always multiple offers on it (over asking price, cash, etc.). Can you elaborate on what kind of marketing has worked for you? Are you 'driving for dollars' and mailing the properties you find? Or purchasing some kind of list (probate, tax lien, etc.)?

@Vasant R. , by the end of this year, I will have bought 30 rental units (2 houses plus some small apartment buildings), and will have completed about 20 to 24 flips/wholetails - depending on how the last quarter shakes out. All of them except for 2 houses were bought directly from the seller. 1 of the 2 that I purchased off of the MLS is the only one I will have lost money on because I paid too much to get it (multiple offers) and underestimated the rehab costs.

All of the 28 apartment units and 2 houses were bought as a result of direct mail.  The rest of the deals I have gotten were leads that have come in through my website as a result of PPC and SEO marketing.  I believe I put up my site in February this year.  The site is nothing groundbreaking or anything (anybody can do it), but I've invested heavily in PPC to get my site ranked at or near the top in my market for a lot of search terms that are used by motivated sellers.  But this approach certainly isn't for everyone.  I did it because I wanted to scale up and get consistent leads coming in, and I am paying for the marketing accordingly.  It's not an approach I'd recommend for people just looking to pick up a property or two here and there.  But the nice thing about PPC is, you can turn it on and off whenever you want, and/or adjust your bid pricing if your spend costs start to creep up and you have enough inventory already pending.  The SEO piece is slow to develop over time, but will ultimately rank you higher organically if you are diligent about putting out relevant content.  Mine still has a LONG way to go organically.  

Let me know if you have further questions, I'd be happy to answer what I can, although I'm certainly not as experienced as others.

Originally posted by @Vasant R. :

Thanks for the comments. It makes sense if the house takes a long time to sell, but what if it's a hot market and the property has multiple offers right off the bat? Is being one of the later offers more advantageous? 

Thanks Matt. I didn't think about the other ways in which the offer sounds good - down payment, closing cost/time, etc. I should also always get my worst case price to know exactly when of walk away. So far I've never got a counter though.

If they have multiples up front and a decent realtor they should rank them and pick the top ones to offer a counter. Value can be outside of money, but good chance they counter everyone and tell you to offer best and final by set time and date. Then few days later they tell you the outcome, doesn't matter when you offer because they'll wait till deadline to evaluate.

The more you can find out about them and why they are selling the better you can position yourself to provide value. You're investing, it's numbers, they either work or they don't. Sellers can have emotional attachment to the property or be in it at different price point than you so you need to find a solution to their problem. They are selling for a reason (or maybe they aren't actually interested in selling and want to much).

@ Owen D., that's awesome! Congratulations on the growth. I'm a newbie, and haven't really done much marketing. Only finding deals on the MLS (trying to). I might bug you later with some questions. I need to look more into creating a website and/or a direct mail system. Thanks again for your input.

@Matt K. , How do you find out more about the seller? I'm never in direct communication with them. I'm using an real estate agent who I ask to put an offer in and that's pretty much it. Do you have any advice on finding out why they are selling?

You're agent should be talking to the other agent.... that's kind of what you're paying them to do. But from a basic level, you could pretty easily find out some info (do they live there, was it an inheritance, investor, vacant, lease, etc).

Thanks Matt. I know my agent talks to the listing agent, but I've just never heard anything back about the reason for selling. I'll ask specifically about that next time. And that's right, I can always do some research on my own to find out more (owner occupied, etc). 

@Matt K. I laughed when I read your post about $130k over asking. Made you question your valuation lol. I had that happen to me last week. Made my strong $65k offer and I get a call from the seller that they accepted a $135k offer. Had me scratching my head. 

@Christopher Charles  

So far most of my leads are from the MLS. After reading some of these comments, I'm thinking about more 'driving for dollars' and possibly starting some marketing (direct mail, website, etc.)

@Vasant R. If you're offering off the MLS in DFW Metro, no wonder. You know what I call the MLS?????? "My LAST Source"

Every deal in DFW receives multiple offers within hours of showing up on the MLS. Total waste of time trying to buy off MLS unless you're willing to pay top dollar. You need to consider one of two options: 1) do other marketing, or 2) expand your market further outside the metro. DFW is very competitive, everyone mails there, everyone has bandit signs, billboards, radio/tv ads, etc etc etc. Find your niche.

Good luck, keep grinding!

Originally posted by @Matt K. :
Originally posted by @Vasant R.:

Thanks for the comments. It makes sense if the house takes a long time to sell, but what if it's a hot market and the property has multiple offers right off the bat? Is being one of the later offers more advantageous? 

Thanks Matt. I didn't think about the other ways in which the offer sounds good - down payment, closing cost/time, etc. I should also always get my worst case price to know exactly when of walk away. So far I've never got a counter though.

If they have multiples up front and a decent realtor they should rank them and pick the top ones to offer a counter. Value can be outside of money, but good chance they counter everyone and tell you to offer best and final by set time and date. Then few days later they tell you the outcome, doesn't matter when you offer because they'll wait till deadline to evaluate.

The more you can find out about them and why they are selling the better you can position yourself to provide value. You're investing, it's numbers, they either work or they don't. Sellers can have emotional attachment to the property or be in it at different price point than you so you need to find a solution to their problem. They are selling for a reason (or maybe they aren't actually interested in selling and want to much).

what are you trying to find out about them that will help your position? how would you go about doing it?

Originally posted by @Alex Abanto :
Originally posted by @Matt K.:
Originally posted by @Vasant R.:

Thanks for the comments. It makes sense if the house takes a long time to sell, but what if it's a hot market and the property has multiple offers right off the bat? Is being one of the later offers more advantageous? 

Thanks Matt. I didn't think about the other ways in which the offer sounds good - down payment, closing cost/time, etc. I should also always get my worst case price to know exactly when of walk away. So far I've never got a counter though.

If they have multiples up front and a decent realtor they should rank them and pick the top ones to offer a counter. Value can be outside of money, but good chance they counter everyone and tell you to offer best and final by set time and date. Then few days later they tell you the outcome, doesn't matter when you offer because they'll wait till deadline to evaluate.

The more you can find out about them and why they are selling the better you can position yourself to provide value. You're investing, it's numbers, they either work or they don't. Sellers can have emotional attachment to the property or be in it at different price point than you so you need to find a solution to their problem. They are selling for a reason (or maybe they aren't actually interested in selling and want to much).

what are you trying to find out about them that will help your position? how would you go about doing it?

 it's common sense, why are they selling. The reason for the sale will tell you what's important (time, money, getting rid of a headache etc). Obviously everything has a price, but price doesn't just have to be money... and if you're trying to be competitive in a multi bid find something that makes your offer stronger/more valuable. 


I saw a real life example unfold once recently. The family had a situation come up and were relocating on short notice. They had multiple people interested (one was first time home buyer, other was an investor, not sure the others). The realtor let everyone bid it out... eventually the first time home buyer had the highest offer and they were selected. Then they couldn't get financing and the deal feel through, then the investor was contacted to see if they still wanted it, they didn't. So now you have a house on the market the family trying to move and get their house sold, it looks bad because it's been on the market for a while and no one bought it. So then new couple looks at it on a whim, writes a offer at asking, has high down payment. It literally took hours for them to get it accepted. The point being, the seller needed to sell the house ASAP, a list price offer with high down payment was more valuable than a higher priced offer with little down payment.

Much easier to explain in person...

@Vasant R.

Find a mentor. Untill you get one. Here 

  1. Send mailers to out-of-state landlords of multifamily houses
  2. Send mailers to absentee owners of single family houses
  3. Send mailers to vacant land owners (only in specific areas in the path of growth)
  4. Place “We Buy houses” flyers/business cards at unemployment offices….a lot of people there could be having trouble with their homes and may need a solution
  5. One-page Flyers posted on bulletin boards at large stores
  6. Post ads on craigslist stating, “We Buy houses”
  7. Send emails to craigslist ads with properties for rent (the emails will go to landlords who may be looking to sell, or buying more properties)
  8. Mailers to specific zip codes, asking if they want to sell or know someone who does
  9. Mailers to divorce attorneys who can refer clients
  10. Mailers/emails to FSBOs
  11. Buy a “leads list” of landlords from AgentPro247 or RealQuest
  12. Post ads on Backpage stating “We Want To Buy Your Property”
  13. Send mailers to properties purchased between 3k-20k within last five years (the owner might be a novice flipper who never did anything with the property)
  14. Send mailers to Estate/Probate Attorneys (if you have an attorney, consider having them send the letter, because attorneys tend to open mail from other attorneys)
  15. Bandit signs: “We Buy Houses”
  16. Send mailers to owners who have owned for 15 years or more (these properties tend to be owned free and clear, which means they could be much more flexible with their sales price)
  17. Send mailers to people facing foreclosure
  18. Target people who own vacant homes – these are almost always ripe for purchasing at a discount
  19. Target people who are dealing with financial chaos of any sort
  20. Send ads/mailers/business cards to Credit Repair Agencies & Credit Counselors
  21. Target HUD/VA Foreclosures
  22. Purchase leads lists of folks who inherited homes
  23. Send mailers to people arrested for violent crimes (going to prison for a long time)
  24. Send Mailers/ads/business cards to Realtors
  25. Send mailers to employees who have been laid off (ie “corporate downsizing” in the news)
  26. Networking with other investors
  27. Locate list of section 8 approved properties—send mailers to the owners
  28. Post Newspaper classified ads: We Buys houses
  29. Send mailers to Properties with liens: Mechanics Liens, HOA Liens, Tax Liens
  30. Contact sales people at new home subdivisions (their clients will want to sell their OLD houses) or place a sign near a new home subdivisions that say “Sell Your House Fast” with your phone number. Often times, these new owners will be desperate to sell their old houses ASAP.
  31. Contact mortgage companies; they may know of people wanting to sell their old house/last house
  32. Hire bird dogs (sometimes even through craigslist “help wanted” ads)
  33. Send mailers to Bankruptcy court listings
  34. Send advertisements, business cards to Accountants and CPA Firms: They have clients with financial problems where an investor can be of help.
  35. Send ads, mailers, business cards to real estate attorneys
  36. Advertise “We Buy Houses” using Apparel with Logos: Hats, T-Shirts, Golf Shirts,
  37. Send to anyone getting their car repossessed: If the car is going the house isn't far behind.
  38. Send ads, business cards to carpet cleaners: Many of their customers are preparing a house for sale.
  39. Send mailers to charitable groups/churches: They frequently receive gifts of real estate, but they'd rather have the cash.
  40. Send ads, business cards to City & County Inspectors: Code violations and red tags. (If you develop a reputation of buying distressed properties and improving them, you become an asset to the community)
  41. Place ads on boards at Nursing & Retirement Homes: Frequently residents need to sell a house.
  42. Consider placing Door Hangers on target properties: You can also use pre-printed post-it notes to leave messages at target properties. Be sure to advertise on both sides, you can even sell the back side and recover your advertising cost!
  43. Send mailers to addresses of people having Garage Sales: Are they moving?
  44. Send mailers to Hair Salons/Barbers: These places are social hubs – lots of talking going on during haircuts
  45. Send mailers, ads, business cards to Insurance Brokers: Policy changes from owner occupant to landlord or vacant house coverage.
  46. Recruit Mail Carriers to notify you of vacant properties
  47. Send mailers to owners of multiple properties (target them to offload portfolios)
  48. Post advertisement in PennySaver type papers: “We Want to Buy Your Property”
  49. Send mailers to water, gas, and electric company shut off lists
  50. Or, just buy leads from:
Originally posted by @Matt K. :
Originally posted by @Alex Abanto:
Originally posted by @Matt K.:
Originally posted by @Vasant R.:

Thanks for the comments. It makes sense if the house takes a long time to sell, but what if it's a hot market and the property has multiple offers right off the bat? Is being one of the later offers more advantageous? 

Thanks Matt. I didn't think about the other ways in which the offer sounds good - down payment, closing cost/time, etc. I should also always get my worst case price to know exactly when of walk away. So far I've never got a counter though.

If they have multiples up front and a decent realtor they should rank them and pick the top ones to offer a counter. Value can be outside of money, but good chance they counter everyone and tell you to offer best and final by set time and date. Then few days later they tell you the outcome, doesn't matter when you offer because they'll wait till deadline to evaluate.

The more you can find out about them and why they are selling the better you can position yourself to provide value. You're investing, it's numbers, they either work or they don't. Sellers can have emotional attachment to the property or be in it at different price point than you so you need to find a solution to their problem. They are selling for a reason (or maybe they aren't actually interested in selling and want to much).

what are you trying to find out about them that will help your position? how would you go about doing it?

 it's common sense, why are they selling. The reason for the sale will tell you what's important (time, money, getting rid of a headache etc). Obviously everything has a price, but price doesn't just have to be money... and if you're trying to be competitive in a multi bid find something that makes your offer stronger/more valuable. 


I saw a real life example unfold once recently. The family had a situation come up and were relocating on short notice. They had multiple people interested (one was first time home buyer, other was an investor, not sure the others). The realtor let everyone bid it out... eventually the first time home buyer had the highest offer and they were selected. Then they couldn't get financing and the deal feel through, then the investor was contacted to see if they still wanted it, they didn't. So now you have a house on the market the family trying to move and get their house sold, it looks bad because it's been on the market for a while and no one bought it. So then new couple looks at it on a whim, writes a offer at asking, has high down payment. It literally took hours for them to get it accepted. The point being, the seller needed to sell the house ASAP, a list price offer with high down payment was more valuable than a higher priced offer with little down payment.

Much easier to explain in person...

 I see your point i just hard  find it hard finding this info out..its like a poker tell..they arent voluntarily volunteering this info out some of them..like im struggling i need to sell..lost my job going through divorce..etc etc...if they blurt that out..they lose their position..I guess some people just tell you straight up..my wife died, im broke need to sell asap..some are more honest than others i guess and just will be straight up with you. Thanks for the insight

Originally posted by @Alex Abanto :
Originally posted by @Matt K.:
Originally posted by @Alex Abanto:
Originally posted by @Matt K.:
Originally posted by @Vasant R.:

Thanks for the comments. It makes sense if the house takes a long time to sell, but what if it's a hot market and the property has multiple offers right off the bat? Is being one of the later offers more advantageous? 

Thanks Matt. I didn't think about the other ways in which the offer sounds good - down payment, closing cost/time, etc. I should also always get my worst case price to know exactly when of walk away. So far I've never got a counter though.

If they have multiples up front and a decent realtor they should rank them and pick the top ones to offer a counter. Value can be outside of money, but good chance they counter everyone and tell you to offer best and final by set time and date. Then few days later they tell you the outcome, doesn't matter when you offer because they'll wait till deadline to evaluate.

The more you can find out about them and why they are selling the better you can position yourself to provide value. You're investing, it's numbers, they either work or they don't. Sellers can have emotional attachment to the property or be in it at different price point than you so you need to find a solution to their problem. They are selling for a reason (or maybe they aren't actually interested in selling and want to much).

what are you trying to find out about them that will help your position? how would you go about doing it?

 it's common sense, why are they selling. The reason for the sale will tell you what's important (time, money, getting rid of a headache etc). Obviously everything has a price, but price doesn't just have to be money... and if you're trying to be competitive in a multi bid find something that makes your offer stronger/more valuable. 


I saw a real life example unfold once recently. The family had a situation come up and were relocating on short notice. They had multiple people interested (one was first time home buyer, other was an investor, not sure the others). The realtor let everyone bid it out... eventually the first time home buyer had the highest offer and they were selected. Then they couldn't get financing and the deal feel through, then the investor was contacted to see if they still wanted it, they didn't. So now you have a house on the market the family trying to move and get their house sold, it looks bad because it's been on the market for a while and no one bought it. So then new couple looks at it on a whim, writes a offer at asking, has high down payment. It literally took hours for them to get it accepted. The point being, the seller needed to sell the house ASAP, a list price offer with high down payment was more valuable than a higher priced offer with little down payment.

Much easier to explain in person...

 I see your point i just hard  find it hard finding this info out..its like a poker tell..they arent voluntarily volunteering this info out some of them..like im struggling i need to sell..lost my job going through divorce..etc etc...if they blurt that out..they lose their position..I guess some people just tell you straight up..my wife died, im broke need to sell asap..some are more honest than others i guess and just will be straight up with you. Thanks for the insight

 You'd be surprised, why wouldn't they? In a multi bid situation it's pretty easy to see who's lowballing you and what the value actually is. If you list at 100k, one bid comes in at 50k and the rest at 75-80 then maybe your house wasn't worth 100 and it's obviosuly worth more than 50. That's when they say hey realtor close this asap I need to move/want to be done with it/ taxes.... and that's when you get a counter and go to a 15 day close vs 30.

But you're right you can't walk up and say hey why you selling... you gotta actually have a convo. Chances are it's their house and if they are proud of it... they'll talk to you about it.

@Christopher Charles

Awesome! Thanks for the detailed list of suggestions. This gives me a lot to think about. I've been pretty focused on the MLS, but this will give me several different ways to find deals. I just need to do some research on marketing (different direct mail styles, getting a PO box, cost of getting lists, etc.).

Let's also point out when they are selling is another clue... if they selling now, they likely "have" to for a reason. Not many people want to sell a house right before thanksgiving, Christmas, and around here all the way till superbowl.

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