How to deal with Over Priced Listings?

Question

I am MAD! I just found out that a listing I made an offer on sold 225 days later for 7K (2%) more than my offer. They didn't accept my offer because they were overpriced so my offer seemed like it was a "Low Ball" offer at the time. Then when reality kicks in and the seller comes to their senses I miss the deal because I was the first one.

My Story: I am looking for another rental. It just so happened the house next door to my current rental goes up for sale. I was really interested but sad to see that the owners priced it TOO high. But I made an offer based on reason and not emotion. The agent gives me the finger for my "low ball" offer. The property gets no action for 200 days, even when other places are going in days. The price dropped marginally every 30ish days. I was waiting for one more price drop to start discussions again and bam! The property went under contract and sold in less than 30 days. I found out once it closed that they sold for 7K more than I had offered. I would have easily paid that if they would have negotiated. Live and learn.

I am a newer investor and this happens to me a lot. I am the first one to bid on a property and my price is a lot lower than asking but it's always very close to the final sales price. I can't be the only one that experiences this, Is this something that I have to live with or are there tricks and tips you could offer when dealing with sellers who have priced too high?

The Numbers:

Original Listing Price: $374,500

Final Selling Price: $307,600

My initial Offer (on Day 2): $300,000

Comps: $285K-$300K

4 Price drops. $360K, $345K, $335K and then $325K.

David Avetisyan · Answer

I don’t really consider making an offer unless the property is over 30 - 60 days old.

But, I think the only thing I would have done differently in your scenario was to keep the conversation going with the listing agent. I typically follow-up every 30-45 days to see where the seller and agent stand; next time try building rapport and maybe ask to be added to the buyers list.

To your success!

Evan Wiesner · Answer

Most investors forget that every time they make an offer they need to add it to their pipeline. Just like brokers are building a network of possible future deals to nurture, investors need to do the same. Whenever I make an offer and it's rejected I respond with a "thanks for the consideration, just to let you know if the seller ever wants to reconsider please let me know. I will gladly re-look at the property and see where we are at that time." The courtesy goes a long way and I get callbacks before reductions when dealing with a good agent.

Kyle McCorkel · Answer

@Garry F.

I started to not even look at listings until after 90 days for that very reason. Most sellers in this market start out with unrealistic expectations in my opinion.

If the property is in perfect shape it’s a different story. But if it needs work just let them sweat it out a bit then swoop in and “save the day”.

Gus Kazek · Answer

@Garry F.

Keep on submitting offers! Getting rejected once and then not pursuing may not get you a deal, but if you are persistent enough and keep on trying you can accomplish anything!

Max T. · Answer

It sold for more than you offered.

Next time follow up sooner.

You will miss a lot, but when you find the right motivated seller you will get it. Not a bad strategy, just requires patience.

How to deal with Over Priced Listings?

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