MY FIRST PURCHASE CONTRACT NULL & VOID

13 Replies

Hi Bigger Pockets Associates I am a first-time home buyer in search of a three-family home in Essex County New Jersey. This has been a very challenging Market. I started my search February 2018. I finally got a 3 family house under contract November 1st 2018. The property is sold as is and the asking price was $250,000. There was a bidding war. My offer and another offer was accepted at $250,000 with me being second in line as a backup if the first deal fell through which it did. I knew the property needed repairs and estimated approximately $65,000 which after inspection the repairs were about $85,000. The appraiser came out November 16th and the report was not available until December 4th. I found out the house in its current condition only appraised for $175,000. The seller was not willing to negotiate stating they have cash buyers who are willing to pay more and the deal fell through. I know I should not have offered the asking price which was my mistake. But in this competitive market how do you low bid offers? Only offer the max that you are willing to pay and risk being outbid by another buyer?

@Quashema Watkins you have heard the best deals come from motivated sellers. The worst deals are made by motivated buyers.  Don't be a motivated buyer

This is a competitive market. Offer at the price that make sense to you. If that means you don't get the deal who cares - it didn't meet your criteria. Keep saving cash until the deal comes along that does meet your criteria.

@Ned Carey Thanks for the insight! I have been searching since February and I found everything I was looking for in this house. You said it perfectly. I became a motivated buyer. Thanks for pointing this out. Lesson learned!

@Quashema Watkins You're also going to need to learn ways to find motivated sellers. They don't just drop out of the sky. You will have to be creative and think outside the box. Search for a document on this site titled 65 ways to find motivated sellers. Pick 2 - 4 and start sending the letters letting them know you're interested in buying the house. Be ready to have those leads skip traced for phone number so that you can give him a call directly. This if need be.

Great job getting under contract, even if it was for too much!  That's a huge first step, and you dodged the 'getting desperate and paying way too much' bullet!

Your answer is yes, only offer the max (or 65-80% of that, depending on your negotiating tactics) that you are willing to pay and NEVER go above the number that works for you.  It will feel like you are missing out on deals, but they're not deals if they cost too much, they're just properties that are selling.  If you get outbid by someone else, they may have different numbers or criteria than you or they may be overpaying -- the only numbers that matter are yours.

As someone just mentioned in another thread -- patience is a great trait to have.  Be patient, keep running the numbers on everything until it's second nature, and you'll find something, even if you're only looking on-market.  And when you have analyzed enough properties, when that good buy pops up, you'll know right away and be ready to move!

And as @Ibrahim Hughes said, you can always search off-market, too.  That is where most of the great deals are found.  FSBOs and Expireds are great to start with.  

And stay out of bidding wars, they only benefit the people selling and the brokers!  Auctions don't make buyers rich!

@Kyle Schlosser yes, the market in this area is insane, and many people will overpay for various reasons, one being it’s a renters market and close to NY. 

@Quashema Watkins congrats on getting it under contract! Bigger congrats on not losing money. Before buying my first home, I looked for almost 3 years 😯 talk about analysis paralysis! But when I founf something I was ready and it was a great buy that im still profiting from today. Moral of the story: what’s meant for you will never miss you. That being said you have to actively search for whats out there. @Ibrahim Hughes has some great suggestions, as a newbie these strategies can seem daunting so I suggest connecting with people locally in the rei world, word of mouth about a great deal is a great way to find off market deals. Run the numbers on everything!! Even things you’re not interested in, just to get used to running them and becoming more efficient. Good luck! Lmk if I can help, im local.