Rental home offer accepted

5 Replies

Hi,

Made an offer of $150K (never expecting to be accepted) to one story SFH that was listed for $189K. 77450 zip code. Received a note from broker this morning that owners will accept my offer. Broker sent revised offer to amend closing date. Now, I am bit hesitating. However it has perfectly fit 1 percent rule of renting, and thats what I originally planned my offer on. Houses in the same size being rent out for $1400-1500K per month.

Shall low ball a little more to fit 95$ per sqft median value of the houses sold in the area in the past year? Its size 1475 sqft and per my offer I will end up paying $101.7 per sqft. And in order to meet median value of $95 per sqft it would have to be $140K another $10k down. Any recommendations about buying this rental home and strategy I should go with are appreciated. I am including little more details about the house here as well.  

One story. Mature trees. Lot size 7,035 sqft. 3 bedroom/2 bath home. Recent paint and flooring (wood laminate and carpet), lighting and plumbing fixtures and fans. Updated kitchen with granite, stone backsplash, gas cooking. Private master with updated bathroom and walk-in shower-recent tile and glass shower door. Secondary bath has a recent tub, tile surround, granite. Spacious private backyard. 

Thanks

Rashad

If you made an offer of $150k, I’m assuming you did your research and could justifying paying that amount. Now that the seller has accepted your offer at that price, I wouldn’t recommend coming back to them and saying “Nevermind, I changed my mind and will only pay $140k”. Doesn’t sound like anything has happened (i.e. failed inspection, new information was discovered, etc) since your initial offer that would justify you doing that, and you’ll likely just offend the seller and their agent. It’s just bad business. 

I agree with Kyle above. Unless you come across something significant during inspection,  it would indeed be bad business. Also, make sure your rent estimate is accurate by comparing it to what is currently available for rent in the neighborhood. If it's saturated with open rental listings (4+ or more IMO),  you may have trouble getting what you want, especially if your house doesn't stand out from the pack finish-wise. 

Kyle, Michelle thanks for your feedback. House went under contract, sellers accepted another offer instead, likely higher than mine. 

I wanted to ask Michelle to elaborate a bit more about her note "saturated with open rental listings (4+ or more IMO)" to help me understand rental home buying criterias 

This house was standing out in terms of renovations and upgrades done to it 

@Rashad A. Leverage your inspection to create additional spread on your end. Just be sure to consider all factors before resubmitting your offer which could possibly kill the deal. Everyone wants to get the best deal possible, however if the numbers work and like you said, "never thought they'd accept this offer", don't get to greedy. 

I always thing of a quote I heard on one of the BP podcast, unfortunately I don't recall who said it, but it goes like this... "If you aren't embarrassed by your offer, your offer is too high!" My realtor knows my strategy and she has a boiler plate offer made up for me so whenever I want to send in an offer, she basically just updates the address and my price. 

Last Wednesday I closed on a real for less than 45% of the listing price!!! Incredible deal, that I never would have landed without submitting my "embarrassing" offer.

Good luck!

Originally posted by @Rashad A. :

Kyle, Michelle thanks for your feedback. House went under contract, sellers accepted another offer instead, likely higher than mine. 

I wanted to ask Michelle to elaborate a bit more about her note "saturated with open rental listings (4+ or more IMO)" to help me understand rental home buying criterias 

This house was standing out in terms of renovations and upgrades done to it 

I think she meant to look as if you were wanting to rent a house in that area. If you see a ton of rentals (4+) then the market is saturated? That's how I took it anyways.

For my area it would just mean those 4 + houses were over priced.

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