High Offer Accepted - Second Guessing

[Richelle Bryan]

Hello BP,

I hastily made an offer that I think is a little high by maybe $5K to be competitive in a competitive market. I did due diligence after and saw a good amount of recently sold similar properties lower (a few higher). However the numbers are still really great at my offer with no repairs needed. One unit is rented one vacant. I got the offer accepted but as a novice (property #2 - first duplex) I am second guessing the decision because I broke my own rule of not getting a "deal". 

Any thoughts on this? Is this just a case of typical nerves surrounding deals early in my RE career or is it no discount no deal? I haven't sent earnest money so nothing is set in stone.

Richelle

[Greg Scott]

My first reaction was if $5K really makes the difference, you must be playing in really low-end property.  ($5K makes a huge difference on a $40K property, but not so much on a $160K property.)   In the long-run $5K is not a fatal mistake so take a deep breath and try to think it through with out the emotions.

What is your goal?

If your focus is cash flow and the property cash flows well, then no problem.   If your goal is to build equity which is why you are looking for a "deal" then maybe you made a mistake.   I could also argue that if you are looking to build equity, you will likely see more appreciation in single family than you would in a duplex, so perhaps you would want to reconsider the deal.

What are the ramifications?

If you back out of the deal, there are two major consequences.   1) You hurt your reputation as a buyer and 2) You lose out on the opportunity to learn and make some money while working on this deal.    Frankly, unless you find some major problem with the deal I would chalk it up as POSSIBLY a $5K mistake and push forward.