Okay so I am new and don't know where to post this, so i am sorry in advance. Okay, so yesterday I made an offer of 1m$. The listed price was 1 050 000$ and my strike price is 945 000$. Is it okay if I offered more than my strike price just to get accepted first and then after the inspection I would renegotiate below my 945 000$ strike price and then negotiate from there? Was it wrong from me to do this?
ps: this is my frist ever offer!
Hi @Bradlee T.
It is a tactic some use. Personally I don't recommend it. Problem is that you have now paid for inspections and reports and all sorts of things to go back with a laundry list. They take one look at your list
"Replace outlet cover in back bedroom $40.00".
"Fix handle on rear bedroom $56.00"
"Replace mechanisms in lower bathroom toilet by qualified certified plumber $235.00"
Or "provide credit of $55,000 "
At that point you are reopening the contract
Their agent calls another agent who put an offer in (the one you were worried about so you went over the top) and shows them the list. They let your deal die and you just paid for another investors DD period. Investors want to sell to someone who is going to close. They like to start figuring where they are going to put the money once they have something inked.
Finding things you would not have seen in a walk through is expected (Broken joist in attic). Finding things any experienced person should have seen and expecting a credit (Front door worn) is another.
Good luck in whatever you decide.
Hi @Mike Cumbie , thank you for your reply.
The offer has not been accepted yet.. Would you suggest me to cancel my offer or keep it like that? Should I cancel it and offer my goal price instead? Sorry if I am asking newbie questions, i'm new to all of this..
You have made the offer, how long did you make the "Life of offer"? At this point I might let it expire or if they accept, then start working through it. If you cancel it and try a new lower priced one, many people will be done with your future offers. Since you put it in, I would let it ride and then work it out.
Just my random thoughts without any real knowledge of the whole situation.
@Mike Cumbie The "life of offer" of my offer has a little more than 24 hours left...
Thank you for your thoughts on this one Mike! I am more relief now.
I'm personally not a fan of the mentioned tactic, and frankly it has given real estate investors in my area a bad name. Which is my most agents don't want to work with investors here. When ever I talk to someone (seller, agent, wholesaler etc.) I try to be transparent from the beginning with my own walk through estimate of the rehab if possible. Make my offer with a 15-20% contingency added to my rehab budget. Then during inspections if I find something big i.e. pipes, roofing, etc then I come back to renegociate. Mind you i probably don't get as many deals but the people I work with like that transparency.
@Jackson Pontsler Thank you for your thoughts, I am taking notes!
@Bradlee T. another tip as you try to tag someone here. If you begin to type my name @Jacks.... you should see a list of names pop up, keep typing till you see my name then click on it. It will tag me and the text will be blue not black like the rest of the regular text.
@Jackson Pontsler It does not seem to work with my cellphone.. it only worked when I was posting on my computer.
Thank you for the tip Jackson! I really appreciate it!👍