Why do I have to view a property before agent will submit my offer?

Buying & Selling Real Estate
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Why do I have to view a property before agent will submit my offer?

Brian Wall
Wholesaler · Santa Fe Springs, CA · Member since 2009 · 219 posts · 83 votes

So, I recently started making many more offer direct off the MLS than I have before (I am an agent submitting for an investor client). I am getting a lot of "resistance" from listing agents saying they will not submit my offer until both I and my client have seen the property.

I am only submitting offers based on ARV (after repair value) taking into account an estimated rehab cost, based on pictures and/or description, and assuming I will do a "normal" rehab. So, I know on average what my costs will be, for a 3/2 in a certain area.

I really don't care what the property looks like, until I know I have an accepted or at least close to accepted offer.

Once we have an accepted offer and open escrow, we then inspect the property in detail. A very high percentage of the time, we do not "adjust" our price. The only time we do, is if we see any foundation or other major structural issues, that would not have been seen without walking through.

I made over 100 offers in the past few weeks, these were all "fixer" properties. I could not possibly go see all these properties.

BP Nation - Help me out, what is a good response to those agents that want me to go see property. I want to be courteous, but also tell them my client doesn't really care about the paint color, carpet, etc, because he is going to rip it all out anyway. All he cares is the area, and the property has a solid structure.

Thanks,
Brian

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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
14y

Like Ned Carey stated, no disrespect to some of the other posts here, but many of which assumed things that are incorrect and they did not take into consideration all the facts.. To be fair, Brian did not explain in detail all the facts either.

So, in the interests of being crystal clear, J Scott first post is not a fair comparison as that was likely an end buyer and I would agree with him that no offer should be looked at or countered from an END BUYER who has not seen the property (both in and out). But, with an investor who knows what he/she is doing as has their numbers down, it is not always necessary until just before going under contract.

In Brian Wall case, he has evaluated the comps, estimated (based on previous averages) his rehab expenses, and made an offer based on those figures. If a list agent states that the offer is close, or could possibly be accepted by their client, then, at that time, Brian could and would go view the property to "confirm" the exit value and rehab costs. If he underestimated rehab, he could simply make that adjustment right then and there. This would be completely fair to the list agent and his/her client as the deal never goes under contract until Brian has in fact visited the property.

To play the numbers game on the MLS as an investor, you simply can't be efficient by visiting 100+ properties each month. Hiring an "assistant" as suggested by another is also not efficient. That costs money and I personally would never trust someone else to provide my financial numbers that make or break an investment deal.

So, Brian - keep making those offers and when the list agent comes back with such a response, inform him/her politely that your client is a professional investor, makes many offers every month and has his/her numbers down to a T. Adding in the fact that if your client's offer is within reach of being accepted, then you will most definitely show the property PRIOR to going into escrow and that once escrow is opened, only your short contingency period will be used for further detailed inspections by your client's team of professionals.

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    13y

    It's pretty simple. The odds of a deal closing where the would be buyer hasn't even seen the property, are much lower than someone who has seen the property, even though they could be trying to wholesale also. My assumption is in these cases the offerer is just broadcasting out a bunch of low ball offers to see what might stick, and then will determine his real offer later. As a listing agent, you're not looking to let a wholesaler tie up a property, just to see if he can go flip it. Then again, if someone accepts an offer when they know you haven't seen it would be an indication of either desperation, or ignorance.

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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    13y
    Originally posted by J Scott:
    [quote=Brian Wall] What makes you think I would "back out too". I am looking for those properties especially. Those are the ones I can get the biggest discount on and make the most money, and are also the most "pain in the butt" for listing agents, and the ones they want to get rid of the quickest. [/quote]
    If I were the seller, my primary concern wouldn't be about you backing out -- my primary concern would be that because you hadn't seen the property, you couldn't have put together an accurate cost estimate of the repairs, and if you determine that your "blind estimate" was incorrect, you could very likely be asking for additional concessions.

    That is certainly possible with many investors, but keep in mind that many of these listings have photos and descriptions, plus keep in mind the target property has old and outdated kitchens, baths, etc. Typically, if the AC units are missing or broken, it is listed in the description. If the roof is old and leaking, it is either visible from the photo or in the description. When an investor plans to gut everything inside the house and start over with a clean slate, there is not much that is not accounted for. From the photos, you can also determine the style and age of the windows which also tells a lot of the story. If they are the old windows, you know to add that into the budget which also includes stucco.

    From my standpoint, unless the target property is a lipstick on the pig deal, the rehab budget should be pretty damn close from a legitimate rehabber making the offer.

    I also want to point out that while I too am in full agreement with J's positions of the seller, keep in mind that the offer sight unseen does not have to go into escrow and be accepted by seller until AFTER the buyer has seen it physically anyways. All the list agent needs to do is contact Brian explaining the offer is acceptable ONCE he and his client visits the property. (By the way, someone asked how does a list agent know if you have or have not seen the property - the supra box containing the keys is digital and logs each agent that accesses it).

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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    13y
    Originally posted by Wayne Brooks:
    It's pretty simple. The odds of a deal closing where the would be buyer hasn't even seen the property, are much lower than someone who has seen the property, even though they could be trying to wholesale also. My assumption is in these cases the offerer is just broadcasting out a bunch of low ball offers to see what might stick, and then will determine his real offer later. As a listing agent, you're not looking to let a wholesaler tie up a property, just to see if he can go flip it. Then again, if someone accepts an offer when they know you haven't seen it would be an indication of either desperation, or ignorance.

    This certainly happens but lets try and not talk about what happens with other wholesalers or rehabbers, this thread is specifically about what Brian does (myself included) which is make legitimate offers, not low ball for no reason, and a complete analysis has been performed prior to sending the offer. While I agree that an offer has a greater chance of falling out if they have not seen the property, keep in mind again that the offer is sent prior to physical inspection, but certainly does not have to go into escrow until it has been. The idea here is to get legit offers out on all potential opportunities, initiating responses from list agents and IF the offer amount and terms are close to acceptable by list agent and their client, THEN the offer submitter can run over and physically inspect/view the property.

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  • David T.
    Specialist · Las Vegas, NV · Member since 2013 · 639 posts · 176 votes
    13y

    The most properties I have inspected with a view to making an offer in any one day was 70. Throughout 2010 I looked at between 1500 and 2500 properties per month. It was worth it! Next week in Georgia I expect to drive at least 100 properties before making any offers.

    As a matter of policy, we don't accept offers from buyers who don't inspect first.

    This works for me!

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  • Zachary Tunstall
    Contractor · Old Hickory, TN · Member since 2013 · 16 posts · 3 votes
    13y

    I hope I do not offend anyone, But sounds like you are about the money and not the client, It will backfire eventually, spend the gas and traffic and time, it will benefit you in the long run, I use to live in Burbank, I know about LA traffic....Best of luck

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  • Alex Baev
    Miami, FL · Member since 2013 · 98 posts · 27 votes
    13y

    I have no substantive advice on the matter, but I do love reading these respectful debates from both sides of the argument - for the sake of mental aerobics - where the objective is to find the most cost-effective solution to increase efficiency in an increasingly efficient "inefficient market"

    Here's another idea to the OP - get a more fuel efficient car to go see property, so it costs you $13, not $15! Just kidding (:

    Good luck, though. You seem to be doing everything an investor-friendly agent should do, you're looking for solutions

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  • Melanie Noblin
    Soldotna, AK · Member since 2013 · 32 posts · 5 votes
    13y

    We have to purchase remotely, without *feet on the ground* per se. We trusted our realtor & third party inspector to gather the information we needed to make an offer. I guess I've never had the issue brought up.

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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    13y
    Originally posted by David T.:
    The most properties I have inspected with a view to making an offer in any one day was 70. Throughout 2010 I looked at between 1500 and 2500 properties per month. It was worth it! Next week in Georgia I expect to drive at least 100 properties before making any offers.
    As a matter of policy, we don't accept offers from buyers who don't inspect first.

    This works for me!

    With all due respect David, even if you only spent 5 minutes per property and each property was only 5 minutes from each other, you would have spent almost 12 hours in one day just driving to and looking at properties. I doubt anyone could keep such a schedule over a period of one year. The ONLY way you could perform the numbers you quoted is if you count going to an entire 30 unit development to view 30 homes in one location and that is not what we are talking about in this thread.

    As to your last sentence, I am not sure how much more clear I can get other than to scream it: BRIAN OR I AM NOT ASKING AGENTS TO ACCEPT OR GO INTO ESCROW, OUR OFFERS UNTIL WE HAVE SEEN IT, ONLY THAT THEY INFORM US VERBALLY THAT THE OFFER IS SUFFICIENT TO BE ACCEPTED AND INSTRUCT US TO VIEW IT BEFORE WE ENTER ESCROW!

    No offense, just trying to get crystal here as you and many others keep giving this very same comment.

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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    13y
    Originally posted by Zachary Tunstall:
    I hope I do not offend anyone, But sounds like you are about the money and not the client, It will backfire eventually, spend the gas and traffic and time, it will benefit you in the long run, I use to live in Burbank, I know about LA traffic....Best of luck

    No offense taken, but I believe you have an incorrect perception. Often, the client is Brian himself or me and it is NOT about getting commissions, it is about getting deals. Now that is clearly about the money, show me one investor that is not in the business for the money and I will show you an out of work, unsuccessful investor.

    Secondly, as stated at least 5 times now, and screamed loud above (without intent to offend), we are willing to drive to see the property but After we have a verbal from the list agent that the offer is sufficient to be accepted pending our visit.

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  • Ramon Jenkins
    Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
    13y

    @David T., please send me some of your energy.

    Heck, most I have viewed in one day is fourteen properties.

    I can expect myself to perform about 150 properties viewing per month.

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  • David T.
    Specialist · Las Vegas, NV · Member since 2013 · 639 posts · 176 votes
    13y

    Las Vegas foreclosure auctions. Mostly SFH's, condos, stuff like that. Two years of it. I personally worked sixteen hours most days, 13 houses in one hour was about the record, as I recall. At least 6-7 hours every day, even in darkness. Most Sundays spent looking at deals. In fairness to your point, sometimes I didn't even have to get out of the truck to walk the property, but it was the only way we could buy reliably.

    Some of the mistakes people make at foreclosure auctions are unbelievable because they fail to inspect before bidding.

    Yes, I was working off a shortlist I had prepared the night before and yes, that's how many foreclosures were on offer at the height of it there. Sometimes well over 1,000 listing per day. There are plenty of people who worked the same way in L.V. and are probably on BP now. We all had our systems - ask around.

    A lot of people made a lot of money. Ask our investors ;)

    The point is, after working foreclosures and REOs and having had the ugly experience of a few Sellers take a swipe at our deposits we have a locked 'n' loaded attitude to making offers. It might not work for everybody.

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  • Bryan L.
    Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
    13y

    @Brian Wall - Brian, you are a Realtor, right? I am too, and you and I both know that Realtors often talk a little bit more than they should. Try this, and it will be even more efficient than sending over an offer.

    First, figure out what price you would offer. Then, call the listing agent and say something like, "hey Betty, I see you have a listing on Maple Street". Let her talk, and listen to what she says. Then, if you don't hear motivation, follow up with, "what can you tell me about it?". Then, if necessary, follow up with, "does it need any work, or is it move-in ready"? Each time, let that listing agent talk, and pay attention to what she says. If you don't have a good answer yet, say something like, "hey, I've got an investor who is interested in that house - do you think your seller might budge on the price?". If you still don't hear what you are looking for say something like, "well, based on our comps and my investor's budget, we're thinking about $xx,xxx. Do you think that will work?". Finally, if you have to, say something like, "do you want me to make that offer?" Is she says yes, then go see the house and make the offer. Your entire phone call with the listing agent will take much less time than writing up the offer. And you may find out that she will say something like, "no, my seller has already turned down $xxx,xxx and he won't budge". If so, move on to the next one.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    11y

    I know this thread is old but I wanted to throw my two cents in as I have been on both sides of a deal with blind offers.

    When I am the listing agent, if I get a blind offer, I advise the buying agent that my client will likely tie up their EMD check indefinitely if they back out of the offer. This almost always has them withdraw their offer, or they say they will then go view the property ASAP and resubmit the offer.

    As the buying agent, I advise my client that the seller may tie up their EMD indefinitely, so they either need to be very sure about their numbers, or only offer a nominal EMD.

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  • Barry Herbst
    Real Estate Professional · New York City, NY · Member since 2015 · 55 posts · 14 votes
    11y
    Originally posted by @Brian Wall:

    So, I recently started making many more offer direct off the MLS than I have before (I am an agent submitting for an investor client). I am getting a lot of "resistance" from listing agents saying they will not submit my offer until both I and my client have seen the property.

    I am only submitting offers based on ARV (after repair value) taking into account an estimated rehab cost, based on pictures and/or description, and assuming I will do a "normal" rehab. So, I know on average what my costs will be, for a 3/2 in a certain area.

    I really don't care what the property looks like, until I know I have an accepted or at least close to accepted offer.

    Once we have an accepted offer and open escrow, we then inspect the property in detail. A very high percentage of the time, we do not "adjust" our price. The only time we do, is if we see any foundation or other major structural issues, that would not have been seen without walking through.

    I made over 100 offers in the past few weeks, these were all "fixer" properties. I could not possibly go see all these properties.

    BP Nation - Help me out, what is a good response to those agents that want me to go see property. I want to be courteous, but also tell them my client doesn't really care about the paint color, carpet, etc, because he is going to rip it all out anyway. All he cares is the area, and the property has a solid structure.

    Thanks,
    Brian

     Hi Brian,

    I always recommend seeing a property on your clients' behalf before submitting an offer, because you're working in their best interest. TI always preview properties for my buyers before putting in offers, most especially those buying site-unseen, such as my foreign investor clients. There are a few reasons for this:

    1) Maintaining a strong relationship with our fellow co-brokers/agents is critical to our success and getting in the door in the future. Agents won't take you or your buyer seriously if an offer is placed on the property although no one has seen it... and besides, if you represent a seller, the seller may ask you if the broker/buyer have seen the property. Putting yourself in the shoes of the seller's agent, you want your client knowing that the buyer is serious. 

    2) You can report back to your client on the structural condition before you make an offer and you have more power to negotiate on your client's behalf knowing the condition is poor- even if they're gutting the entire place.

    3) Your other buyers may like a certain property you're viewing, even if it's not right for this buyer mentioned in your post. 

    I hope this helps, best of luck. 

    Best,

    Barry

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  • Anita Fofie
    Real estate consignment; Virtual REO wholesales · Vancouver, Vancouver, BC · Member since 2015 · 49 posts · 18 votes
    10y

    I agree with the above. If you are putting good earnest money down and fully intend to follow through with your offers then there is nothing wrong with making many offers before physically seeing the property. As for "making a bunch of low ball offers to see what sticks" I don't think responsible investors do this. At least for me, I always run my numbers BEFORE I submit any offer to determine my maximum allowable offer. I do often calculate my MAO and then take 10-15% off of that as my initial offer so that there is room to go up but that's just good negotiating, there's nothing arbitrary about it. I could be wrong but the listing or selling agent MUST submit every offer received to the seller. I ran up against this issue when inwanted to make offers remotely so could not see the properties myself and some listing agents would not write up the offers. Then it occurred to me that I didn't have to use the listing agent to write my offer. Go around the gatekeeper. I had my own investor friendly agent who now writes up all my offers and submits them. I've made it easier for him by having him give me a blank purchase contract and addendum which I've signed and initialed and saved in my computer so that all I have to is fill in the address and email it to him to submit. If/when your offer gets rejected ask your agent to request to see the returned offer--it should be signed by the seller with a notation of the time and date they accepted, countered, or rejected the offer.

    Hope that helps. 

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