Some investors make me laugh

Buying & Selling Real Estate
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Some investors make me laugh

Justen Ashcraft
Braselton, GA · Member since 2013 · 243 posts · 57 votes
My wife and I just listed the last of our sfr’s in Gwinnett County. It’s in a very up and coming neighborhood with a new hospital less than a mile away etc. we listed it below the “Zillow” estated 176k for 169,900. We’ve had plenty of interest, but haven’t accepted anything as of now. My real estate agent says you have an offer at 155 and they want this and that and this... “cash buyer”. I told him not even to respond with this lowball crap. We’ve had full price offers already, but will wait until tomorrow mornings showing to ask for highest and best. I’m not a flipper, but is this how it goes with investors looking to buy an investment property? I guess people will just throw junk out there hoping it will stick. Ye, I do understand that this is what most of us do, lowball, but that’s an embarrassing offer even though the percentage isn’t that far off.
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Brian Pulaski
Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
8y

A $155k cash offer on a newly listed $169k asking price is not that low ball to me. He may assume your bottom line is $160-165 and they will end up there. I had a house listed at $285k and was offer $250k, with his reasonings. I countered back and he disappeared. I never felt insulted, I found a buyer shortly after and al went well.

If you have full price offers, and waiting on another showing, you don't need to worry about that lower offer, however to me that is far from an insulting low ball offer... something like $130k would be a lowball offer.

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  • Dan BeaulieuPro Member
    Lender · Knoxville, Tennessee (TN) · Member since 2016 · 422 posts · 667 votes
    8y
    Justen Ashcraft don’t take it personally, we are all out here just trying to keep the most cash in our own pocket and make an honest living for our families. I make tons of offers and am pretty much always embarrassed, but the intention is certainly not to offend!
    24Reply
  • Justen Ashcraft
    OP
    Braselton, GA · Member since 2013 · 243 posts · 57 votes
    8y
    I know, I’m just ranting a little. Thanks.
    0Reply
  • Brian Pulaski
    Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    8y

    A $155k cash offer on a newly listed $169k asking price is not that low ball to me. He may assume your bottom line is $160-165 and they will end up there. I had a house listed at $285k and was offer $250k, with his reasonings. I countered back and he disappeared. I never felt insulted, I found a buyer shortly after and al went well.

    If you have full price offers, and waiting on another showing, you don't need to worry about that lower offer, however to me that is far from an insulting low ball offer... something like $130k would be a lowball offer.

    29Reply
  • Rito Altamirano
    North Las Vegas, NV · Member since 2015 · 77 posts · 27 votes
    8y
    I agree with @Brian Pulaski for an all cash offer that's pretty good. as an agent I would've advised my client that your asking 169k and 155k is slightly low but I would've had him submit at 155k and hope for a counter offer at 160k to 162k.
    6Reply
  • Justen Ashcraft
    OP
    Braselton, GA · Member since 2013 · 243 posts · 57 votes
    8y
    In my opinion a cash offer isn’t any better than financing. It will appraise without issue, and they weren’t going to close any sooner than our full price conventional mortgage offer.
    1Reply
  • Christian Cramer
    Property Manager · Kihei, HI · Member since 2016 · 85 posts · 97 votes
    8y

    A 155k cash offer on a 169k listing is very strong, why didn't you come back with a counter? 

    Also for the future, Zestimates are probably the worst way you could price a property, at least in my market it is extremely inaccurate. 

    17Reply
  • Justen Ashcraft
    OP
    Braselton, GA · Member since 2013 · 243 posts · 57 votes
    8y
    As I mentioned, a cash offer is no better than a bank financed offer in our situation.
    0Reply
  • Maugno M.
    Flipper / Landlord · Tyler, TX · Member since 2016 · 255 posts · 126 votes
    8y
    Hell yeah buddy that's a good CASH offer. I always lowball that's the only way to get deals what are you talking about. If I'm putting up cash I woulda offered you 140k or less because it's cash !
    2Reply
  • Sergiu Ionita
    Real Estate Agent · Social Circle, GA · Member since 2015 · 116 posts · 53 votes
    8y
    In your case, a cash offer may not make a big difference, but to a motivated seller who wants to sell their home quick and doesn’t want to deal with the risk of a buyer not being able to obtain financing, this could be seen as a very strong offer. There are many investors that make low cash offers like this in hopes that a seller will be motivated enough to accept.
    3Reply
  • Justen Ashcraft
    OP
    Braselton, GA · Member since 2013 · 243 posts · 57 votes
    8y
    Sometimes I think people actually believe the buyer is walking in with a briefcase of cash :(. If that’s what some of you think, please do some research .
    0Reply
  • Michael Plante
    Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
    8y
    Originally posted by @Justen Ashcraft:

    In my opinion a cash offer isn’t any better than financing. It will appraise without issue, and they weren’t going to close any sooner than our full price conventional mortgage offer.

    Cash talks especially when you have had deals fall through after 2 months, at the last moment because financing which was agreed to by the bank

    3Reply
  • Michael Plante
    Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
    8y
    Originally posted by @Justen Ashcraft:

    Sometimes I think people actually believe the buyer is walking in with a briefcase of cash :(. If that’s what some of you think, please do some research .

     I’ve actually been to closing where there was all actual cash more than once 

    3Reply
  • Charlie MacPherson
    China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    8y

    @Justen Ashcraft Even if closing times are identical and there is zero chance of an appraisal issue, a cash offer is still better.  

    Financing can blow up for any number of reasons - the buyer does something that changes their DTI before closing like buying a car. They do something to change their credit score, like falling behind on a bill. The buyer loses his job. Or he gets very sick and has a temporary loss of income. Buyer does something stupid and gets arrested or imprisoned - the list is nearly endless.

    Any and indeed ALL of these things will cause a buyer to lose financing and assuming that their offer includes a financing contingency, their offer will fail.

    Any time there is a choice between an offer with a financing contingency and one without one, the latter is stronger offer, all else being equal.

    In order to know whether an offer is insulting, you need to know two things.

    1. What are the comps?  I mean the legit comps.  Solds, not those currently on the market.  

    2. What is the average sale to list price percentage?

    If the average property sells at 99% of list, then an offer (assuming yours is properly priced) of 85% is a lowball.  But if the average home in your particular market is selling at 90% of asking, an offer of 85% may actually be in the ball park.

    Either way, your agent should engage the buyer with a counter offer and should be negotiating on your behalf.

    5Reply
  • Justen Ashcraft
    OP
    Braselton, GA · Member since 2013 · 243 posts · 57 votes
    8y
    Taking a $10k hit versus a couple grand in holding costs is a big spread. We’ve sold some things in the past and most come with a prequel letter qualifying for more than our asking price. Coming with a lowball offer is one thing, coming with a low ball offer and asking for multiple(expensive) concessions is another.
    0Reply
  • Pablo Mendez
    Abita Springs , LA · Member since 2017 · 80 posts · 43 votes
    8y

    out of curiosity... have a link to your listing?

    1Reply
  • Christian Cramer
    Property Manager · Kihei, HI · Member since 2016 · 85 posts · 97 votes
    8y

    Its not the "briefcase of cash" that makes a cash offer strong, its the flexibility and security the offer provides not having the whole deal contingent on a loan. Either way, the offer was a great starting point for a counter offer on your end to open the negotiations, which is the point of an offer. Just my 2c

    3Reply
  • Justen Ashcraft
    OP
    Braselton, GA · Member since 2013 · 243 posts · 57 votes
    8y
    If ALL things are equal, I agree a cash offer is better. It’s also better if they can close faster. In my area home values are rising rapidly. A lot, greater than 50%, of the properties are going under contract with multiple offers over asking on the second or third day. This is why I feel lowballed with their offer. I doubt that they know that I know the game, and that’s fine. It just makes me laugh and want to rant.
    0Reply
  • Justen Ashcraft
    OP
    Braselton, GA · Member since 2013 · 243 posts · 57 votes
    8y
    We countered at 165 and they came back with 160 plus concessions as their final. I laughed.
    0Reply
  • Justen Ashcraft
    OP
    Braselton, GA · Member since 2013 · 243 posts · 57 votes
    8y
    https://www.zillow.com/homedetails/6945-White-Walnut-Way-Braselton-GA-30517/83343927_zpid/?view=public
    2Reply
  • Brian Pulaski
    Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    8y
    Originally posted by @Justen Ashcraft:

    Sometimes I think people actually believe the buyer is walking in with a briefcase of cash :(. If that’s what some of you think, please do some research .

     I made that offer to my attorney on the closing of my current house. He said just wire him the money... 

    Also financing falls thru ALL the time.

    If the cash offer isn't a quick close, negotiate that in. If they want work done, negotiate that out. This is business, seems you took it personal!

    It sounds like your vision of the offer/deal is much different than everyone else here. No worries. Your in a hot market, you can hold out for more money and wait out financing if need be, good deal!

    4Reply
  • Peter Pratti
    Rental Property Investor · Knoxville, TN · Member since 2017 · 147 posts · 65 votes
    8y

    Hope you sell!  Just make your counter offers and move on though, people are just going to offer whatever and if it is truly worth 169 then it will sell at 169 and who cares what is being offered.

    4Reply
  • Justen Ashcraft
    OP
    Braselton, GA · Member since 2013 · 243 posts · 57 votes
    8y
    I guess I did take it personally. Foolish mistake. I’ll brush it off. Likely because my wife and I were living there when we were married. Sentimental attachment that I need to **** down. Thanks for letting me vent.
    7Reply
  • Al D.
    Investor · San Francisco, CA · Member since 2017 · 303 posts · 327 votes
    8y
    @Justen Ashcraft: Yes, that’s how it goes with this investor. I embarrass myself almost daily. Despite the colloquial expectation, I have not yet died of it. Sure, it may seem insulting to receive lowballs. But I consider that part of doing business. I’ve been on both ends. “Sometimes you are the bat, sometimes you are the ball.” Or getting lowballed. You say you know the game, yet you are so offended as to laugh at someone for what you described. I practically feel offended by that, since you are so educated in the game. This forum is about sharing knowledge. A beginning investor reading your post may easily get discouraged. One thing I keep seeing repeated as advice on this site is that “you make money when you buy.” I agree. Depending on the specifics of a given market at a given time, my lowballs may have been as much as 40% below listing - and accepted. Specifically, I bought duplexes in a place that, at that time, for some reason, only had SFRs selling. I saw those sitting on the market for close to a year - would you not make a lowball offer? Maybe that’s not your market - right now. Good for you. I once actually had sellers tell me that they were insulted when I came back with a still-lower offer after an inspection (I had that contingency in the contract,) having first accepted my offer, which was already lower than their asking, as if I were already getting an amazing bargain. I had to explain that their listing agent’s describing the properties (it was a package) as “turnkey” - specifically telling me that there was no deferred maintenance when I asked - was in stark contrast to reality: it could be readily seen from the street that some needed new roofs, to start with. The fact that I was in another state may have played a role in trying to play me. (I took it out on the listing agent separately - after negotiating concessions.) I know that this is not your case, but still - I was told I actually insulted someone. I’ve had my (non lowball, yet considerably lower than the asking price) cash offers accepted over other (allegedly-) higher financing offers, even if mine were slightly lower than those. I am always happy to negotiate with anyone interested enough to make even a lowball offer when there are no other offers. (Again not your case.) I’m happy for you that you have other offers, genuinely. It’s business. Don’t ever take or make it personal, unless someone defrauds you.
    6Reply
  • Brian Pulaski
    Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    8y

    @Justen Ashcraft the example earlier, the $250k offer on a $285k asking price was the house that me and my wife bought as BF and GF, got married there, and had both of our children there. Very sentimental house (eerie feeling the last day I walked it emptied out) but it's all business.

    Sounds like at the end of the day you will get your money and that guy will move on to another deal.

    0Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    8y

    I don't know what the concessions were, but a $160k cash offer on a list of $170 is a 5% discount from asking. Even the original offer is not a low ball, unless the concessions were something like remodeling the entire house before closing. 

    As for cash not being better than financing, you are correct so long as you are sitting at the closing table. Some of my rentals, I bought when the previous buyer's financing fell through. I have lost a sale of my own when the prequalified buyer ended up not being able to close a loan even after several extensions. 

    It sounds like you're just in a lucky market. Anything that has multiple full-price offers on the first day, from qualified buyers, is either grossly underpriced or in a bubble market. 

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