All
Members
Companies
Blog
Forums
Podcast
Webinars
    User Log in  /  Sign up
  • Forums
    Newest Posts Trending Discussions Followed Forums Real Estate News & Current Events General Landlording & Rental Properties Buying & Selling Real Estate Deal Analysis See All
  • Education

    Read

    BiggerPockets Blog BPInsights: Expert Analysis Guides Glossary Reviews Member Blogs

    Watch

    Webinars Video Library Financial Independence Blueprint Intro to Real Estate: Rentals

    Listen

    BiggerPockets Real Estate Podcast BiggerPockets Money Podcast BiggerPockets Business Podcast Real Estate Rookie Podcast Daily Podcast (Audio Blog)

    Topics

    Business Operations Finance Finding Deals Property Management Property Types Strategy
  • Network

    Recommended Vendors

    Real Estate Agents Mortgage Lenders Hard Money Lenders Insurance Contractors Investment Companies Build Your Team

    Search

    Members Events Jobs
  • Tools

    Calculators

    Rental Property Fix and Flip BRRRR Rehab Estimator
    Wholesaling Mortgage Payment 70% Rule Airbnb

    Services

    BPInsights: Property Insights Tenant Screening Property Management Lease Agreement Packages

    New Feature

    BPInsights (beta)

    Quickly analyze a property address or ZIP Code to compare your rent in your neighborhood.

    Analyze a property
  • Find Deals
    Real Estate Listings Find Foreclosures External Link Ads, Jobs, and Other
  • Bookstore

    Real Estate Books

    Profit Like The Pros Bidding to Buy See all books

    Featured Book

    BiggerPockets Wealth Magazine book cover
    BiggerPockets Wealth Magazine

    Written by financial journalists and data scientists, get 60+ pages of newsworthy content, expert-driven advice, and data-backed research written in a clear way to help you navigate your tough investment decisions in an ever-changing financial climate! Subscribe today and get the Oct/Nov issue delivered to your door!

    Get the Magazine
  • Pricing
Log In Sign up
User
Quick search links
Podcast Hard Money Lenders Books Washington
ForumsArrowBuying & Selling Real Estate DiscussionArrowReceived an offer- what should I be looking for??
  • Newest Posts
    • Newest Posts
    • Unanswered Discussions
  • Trending
    • Top Discussions
    • Trending Discussions
  • Browse Forums
Search Nova
Create post

Received an offer- what should I be looking for??

20 Replies

  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
Rotate Log in or sign up to reply
user profile avatar
  • Posts 18
  • Votes 3

Lisa S.
Investor from Alexandria, Virginia

posted about 3 years ago

Hi All,

My multi unit (4 units)attracts a lot of attention from buyers even though it’s not on the market. One buyer in particular has really been hounding me ( a real estate agent) I told him what the minimum amount I would sell for is and to my surprise he emailed me a written offer. I don’t have an agent and have never sold a property before and have no idea what to look for. Additionally, the offer included a reference to a $1k earnest money deposit but its less than a 1/2 of a percent of the purchase price which seems really low. And it’s sight unseen. I’m not sure if I should take this seriously or not and need to know what I should be looking for. Also they offered $25k below what I’m asking for. Should I ask for proof funds? Anything else?? Lisa

Rotate Log in or sign up to reply
user profile avatar
  • Posts 515
  • Votes 399

Brian Adzadi
from Allentown, Pennsylvania

replied about 3 years ago

@Lisa S.

If your property is truly in Alexandria, VA, this is what I would do. NOT A DAMN THING. Sit on that property for a couple more years. Alexandria is seeing a big boom because of the bigger boom going on in Washington, D.C. That 4 unit of yours is a gold mine. Give it at least 2 more years and that property will be worth millions.

Tell the buyers that you are not selling at the moment and just sit on this baby. It will be worth the wait.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 89
  • Votes 80

Nate Burgher
from Olympia, Washington

replied about 3 years ago

Hey @Lisa S. , get a realtor and / or a lawyer, plain and simple. If this were your 100th sale, I'd say otherwise, but you need people with experience with this kind of stuff. Their commission is your protection.

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Single Family, Residential, and Taxes & Accounting
  • Posts 418
  • Votes 173

Robert Freeborn
Real Estate Agent from Bellingham, WA

replied about 3 years ago

As the first replied said (sorry, on the app and I can’t see who posted) I would wait.

Buuuuut, if you want to sell, remember, it was an offer only. It is YOUR property. If they aren’t offering what you want, counter for someone you WILL take or drop them like a rock.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 18
  • Votes 3

Lisa S.
Investor from Alexandria, Virginia

replied about 3 years ago

Brian, Nate, Robert- thanks for the quick replies!! The property is actually located in Washington DC in an “emerging area” with clear signs of revitalizing, i.e, near new development/ plans for construction of professional sports arena, etc. I’ve held it for the past 4 years and sometimes get weary with some of the tenant issues/ drama, but I agree I should try to hold out as I’m sure I could get much more at some point. I’ve never had anyone send me an offer before so it caught me off guard, but it’s not even on the market nor do I have an agent yet. Thanks again for the insight.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 7
  • Votes 4

J. Robert Santos
from Austin, Texas

replied about 3 years ago

Hey @Lisa S.!

I would ask that he put a minimum of 1% of property price down. I am an investor and commercial real estate agent in Austin, TX, and I will tell you from experience, make sure you hire the right help. As other posters here have stated, you need someone skilled that knows your market and can offer you expert advice.

Make sure you counter back with terms that are in your favor, as you are not desperate to sell. Now, I am not saying make no concessions, I am just saying make sure you reduce your out of pocket expense as much as you can and put contingency clauses in the offer that give you an out.

Good luck!

Rotate Log in or sign up to reply
user profile avatar
  • Posts 26
  • Votes 12

Aaron Cavazos
Investor from Washington DC, DC

replied about 3 years ago

Unless you don't want to be a landlord for that building, which it sounds like you do, then the chances of this offer or subsequent offers being in your best interest are very small. They are merely people trying to get into the position you are now. So unless you don't want to own the building anymore, sit back and watch the hundreds of millions of dollars pour into the area around you.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 2.4K
  • Votes 2.4K

Tom Gimer
from Washington, DC

replied about 3 years ago

@Lisa S. Are you aware of DC's TOPA framework? I highly recommend you get some help to navigate this. If only it was as simple as selling to an interested buyer.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 18
  • Votes 3

Lisa S.
Investor from Alexandria, Virginia

replied about 3 years ago

j.Robert, Aaron, Tom- thanks for the insight. And oh yes, I’ve heard of TOPA and definitely want some help with that one  versus going it alone. Again, I’m getting a bit weary with the tenant issues at times, but it just doesn’t feel right to sell now. Will try to hold out for a while longer.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 55
  • Votes 35

Joshua Hilliard
from College Park, Maryland

replied about 3 years ago
Hey Lisa, I think I know the area you are talking about and I agree with everyone else that says you should stay where you are!!! Don't sell. I was looking in that area and I do believe that it has a huge upside! I would love to be in your position. Between military bases and government employees your rental market is huge! Also, if someone is trying to buy from you even though your property is not for sale then they are trying to get an off market deal which means they don't want it on the Market. Your place is worth way more than they are offering. If you are tired of the tenants then get new tenants! It's your property. You control who lives there. Or at the very least hire a property manager. Let them be the bad guys. Bottom line is don't sell just as the market is going up. And also don't sell until you have another deal. You don't want to lose your profits to taxes of let the cash burn a hole in your pockets!
Rotate Log in or sign up to reply
user profile avatar
  • Posts 18
  • Votes 3

Lisa S.
Investor from Alexandria, Virginia

replied about 3 years ago

Joshua- you are sooo right! Especially about what you said about finding another deal. I had envisioned doing a 1031 exchange at some point but I have not even started looking yet so I don’t have another property to roll any funds into. Maybe this is a sign I should get going with that. Unfortunately, I have some really bad tenants. I had to learn the hard way that all money is not good money. For example, I am suing someone now for non payment of rent and she requested a jury trial even though she knows she hasn’t paid rent for 6 months!  It’s incredibly frustrating but I need to find a way to look at the big picture and know it will all be worth it in the end.

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subject:
Taxes & Accounting
  • Posts 6.4K
  • Votes 6.4K

Dave Foster
Qualified Intermediary for 1031 Exchanges from St. Petersburg, FL

replied about 3 years ago

@Lisa S. , When you've got eager buyers you can use that to your advantage in a 1031 situation to buy yourself more time.  Whatever you negotiate with the buyer it needs to include contingency that allows you to find your 1031 replacement property before closing the sale.  That eliminates the constrictions of the 45 day identification window.  

As an aside I don't know that I'd want to give any discount if I had multiple people interested.  A small discount for the delayed closing maybe - especially since I'd be saving realtor fees.  But not much.

And secondly while it's easy to get excited or offended at the size or lack thereof of the earnest money - in most cases earnest money means nothing.  Especially if a savvy realtor is writing the contract there will be inspection and finance contingencies that will always allow them to get their earnest back for almost any reason.  So don't get hung up on the check to you that opens the escrow.  Focus on terms of the contract first and then find ways to make the earnest money enforce those terms.  And for that hire a real estate attorney to represent your interests.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 47
  • Votes 13

Patrick Kendrick
Investment & Residential Real Estate Agent from Spokane, WA

replied about 3 years ago

@Dave Foster Outside of a long close date what sort of verbiage would you use in order to extend close until you have identified the replacement property? 

Rotate Log in or sign up to reply
user profile avatar
  • Posts 825
  • Votes 275

Amanda G.
Rental Property Investor from Augusta, GA

replied about 3 years ago

Hi Lisa,

Newbie here, so take this with a grain of salt. It sounds like your life will be easier with a better tenant screening process. I recently ran across "Landlording on Autopilot" which is a book BP recommends. It has some great ideas for training tenants. It doesn't solve your current situation, but it might give you hope for things getting easier. Good luck!

Rotate Log in or sign up to reply
user profile avatar
  • Posts 18
  • Votes 3

Lisa S.
Investor from Alexandria, Virginia

replied about 3 years ago

Thanks Amanda, I will check it out.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 18
  • Votes 3

Lisa S.
Investor from Alexandria, Virginia

replied about 3 years ago

Dave m, I had no idea about putting the 1031 exchange info in the contract. Good to know!

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subject:
Taxes & Accounting
  • Posts 6.4K
  • Votes 6.4K

Dave Foster
Qualified Intermediary for 1031 Exchanges from St. Petersburg, FL

replied about 3 years ago

@Patrick Kendrick , Well the extended closing is really the key so the  language can be anything that passes legal and gets you there.  It could be as simple as an  on/before date thats way out there.  Or it could be a "date to be determined" upon seller finding a satisfactory replacement property to perform a 1031 exchange.

You could use escalating earnest money payments at periods to keep the buyer hooked.  And you could offer discounts on sales price  dependent on how long the sale is delayed - remember while you're waiting you are collecting rent.

When the gain dollars justify it there is also the process of a reverse exchange where your QI purchases the replacement property and holds it for you until your old property sells.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 100
  • Votes 42

Cameron Novak
from Corona, California

replied about 3 years ago

To start with, you need to get them to pony up a substantial earnest money deposit to show they're serious.  Secondly, pay an agent to represent you in the transaction.  The small amount in commission will be well worth it.

What is your reason for considering a sale if your home wasn't on the market?

Rotate Log in or sign up to reply
user profile avatar
  • Posts 184
  • Votes 77

Dan Bernstein
Real Estate Agent from Alexandria, VA

replied about 3 years ago

@Lisa S. I PM'ed you, but didn't realize you were talking about DC.  You have many options in DC.  I would consider selling your 4 unit on the open market, but after you establish a solid tenant situation.  In DC, its more valuable to sell the property vacant, so if tenants move out and you are thinking of selling, do not replace them with more tenants.  Depending on the area, you also have the option of Joint venturing with a developer and popping the top and gut renovating, then selling the units as condos.  In DC, if the property is metered with multiple units, by right you can convert them into condos.  If you are having issues with a tenant currently and they are taking you to court, I would not sell now and deliver TOPA, because you could have some serious issues with the tenant.

Happy to chat and fill you in on multiple scenarios and options.  Good Luck!

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Real Estate Finance, Team, and Single Family
  • Posts 499
  • Votes 274

Cassidy Burns
Real Estate Agent from Washington DC, DC

replied about 3 years ago

Hey Lisa,

You have many options:

-Continue to Buy and hold

-Convert to condos and sell.

-Sell as-is , 1031 Exchange and purchase another multifamily/investment that will have more manageable tenant situation.

-Sell, pay taxes, ,enjoy the profit.

Please feel free to reach out!

Rotate Log in or sign up to reply
user profile avatar
  • Posts 18
  • Votes 3

Lisa S.
Investor from Alexandria, Virginia

replied about 3 years ago

Thanks Cassidy, this is good to know!

Rotate Log in or sign up to reply
  • 1
Related Resources Buying & Selling Real Estate Discussion
Start Your House Hunt Right by Asking These Questions First
Is Doorvest a Good Option for Real Estate Investors?
How to Choose the Right Remote Real Estate Market for You
Home Purchase Fall Through? Don’t Panic: Here’s How to Get Your Earnest Money Back
What Is Underwriting? Here’s What to Expect
Resources Read, see, and learn more!
Link Real Estate Investment Calculators
Link BiggerPockets Blog
Link Path to Purchase
Link Mortgage Loans
Link Find a Contractor
Link Real Estate Agents
Link Hard Money Lenders
Link Real Estate Listings

Top Contributors

Jay Hinrichs
Jay Hinrichs
Lake Oswego OR Summerlin, NV
8.78
Score
Ryan M.
Ryan M.
FL
8.18
Score
Matthew Irish-Jones
Matthew Irish-Jones
Buffalo, NY
5.26
Score
Russell Brazil
Russell Brazil
Washington, D.C.
4.49
Score
Mary M.
Mary M.
Portland OR
3.96
Score

Buying & Selling Real Estate Discussion Trending Discussions

  • My experience with REI Nations
    23 Replies
  • Shady Seller - Loan Contingency removal BEFORE title is complete
    17 Replies
  • Does tenant's lease always transfer to new landlord / buyer ?
    8 Replies
  • Paying full amount with cash and then refinancing
    8 Replies
  • Realtor slowing me down
    85 Replies
Log in Sign up

Log in

Forgot password?

If you signed up for BiggerPockets via Facebook, you can log in with just one click!

Log in with Facebook

Or
btn_google_dark_normal_ios Created with Sketch. Continue with Google

Let's get started

We just need a few details to get you set up and ready to go!

Use your real name

Use at least 8 characters. Using a phrase of random words (like: paper Dog team blue) is secure and easy to remember.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.

Or
btn_google_dark_normal_ios Created with Sketch. Continue with Google

Why create an account?

Receive a free digital download of The Ultimate Beginner's Guide to Real Estate Investing.

Connect with 1,000,000+ real estate investors!

Find local real estate meetups and events in your area.

Start analyzing real estate properties, we do the math for you.

It's free!

Explore

  • Membership
  • Community
  • Education
  • Marketplace
  • Tools
  • FilePlace
  • REI Resources
  • Perks
  • Glossary
  • Reviews
  • iOS App
  • Android App

Company

  • About Us
  • Press
  • Advertising
  • Careers
  • Stats
  • Contact Us

Important

  • Editorial Guidelines
  • Terms of Use
  • Rules
  • Privacy
  • FAQ

Social

  • Facebook
  • Twitter
  • YouTube
  • Instagram
© 2004-2021 BiggerPockets, LLC. All Rights Reserved.