How to make an offer in a competitive market?

Question

I’m not sure about others but it seems that as soon as a property becomes available or there is a hint of something coming available (Cincinnati market) an offer is made immediately. I received a tip from an agent yesterday that a triplex was available. Within 10 min I responded that I’d like to look at it. Her response was: “It’s already pending.” This has now happened to me four times.

How do you/others make quick offers in a competitive market?

I’ve heard of making offers immediately with contingencies but wasn’t sure how that worked. Open to thoughts, ideas, suggestions, etc.

How do you/others make quick offers in a competitive market?

I’ve heard of making offers immediately with contingencies but wasn’t sure how that worked. Open to thoughts, ideas, suggestions, etc.

Kenneth Reimer · Answer

@William Durel Hi William, it's a great question. As a broker that has worked in a highly competitive market, it's very tough for buyers that don't have reputations built up within the community that they're looking to acquire. If you're strategy for finding deals is working through brokers, make sure you see the broker as an interested party. When I have a deal coming available, I have a short list of people that will always treat me and the seller professionally, so I know I can safely recommend a buyer and not run the risk of tarnishing my reputation. As for finding deals, markets oftentimes get competitive to the point where it's a good idea to work through the listing agent if you're savvy enough to make your own decisions. Other than that, I think making a point to call the active agents is important. The squeaky wheel gets the grease, or at least gets to view the deals before they're tied up by other people!

In summary, I would ask the most active brokers good questions when you speak with them. When I see a deal come on market, I immediately call the agent and start asking good questions, such as:

1. Does the seller want to fully market this or are they reviewing offers as they come in?

2. Are there certain terms of an offer that are important to the seller outside of just being highest on price?

3. How do you think we should craft an offer to make it most attractive to the seller?

4. Would a schedule of real estate and/or personal bio make my offer more compelling?

5. Are you representing other buyers that are making offers on this deal?

With the answers to these questions, you can deduce how to write an offer that the seller will find compelling to create a win-win dynamic and be selected as the buyer to enter into contract with. Hope this helps my friend. Feel free to ask more questions, great topic!

Kenny Reimer

Kris Wong · Answer

You will often see investors just making offers and getting properties under contract, knowing they can just walk away or renegotiate due to contingencies. Maybe you need to do this in your market. Be careful, though, because this drives sellers nuts, and you can start to create a reputation that you don't want.

Jaron Walling · Answer

@William Durel If the property is hot somebody is looking at it (agent, investor, family friend). You win by knowing more people in the market or finding value add. Agents will hate you pretty quick if you offer but don't close on anything.

Winter is approaching and it's a nice time to find motivated sellers. I purchased my first deal that way. Look for something that's been on market for a bit. Figure out what's wrong with it. Solve a problem for the seller.

William Durel · Answer

@Jaron Walling I haven’t had the opportunity to make an offer because of what I’m looking the deals are pending before I can look at the property online to make sure it’s what I’m looking for.

I have only made one offer of my first rental which I got. Everything else I’ve been interested in has been pending before I have time to research the property.

I’ve heard of investors making immediate offers with contingencies which is what I’m looking into now. Just now sure how that works.

Jaron Walling · Answer

If you're looking for multi family properties you have to move fast, find off market deals, or get lucky. The same thing is happening in my market. Having detailed knowledge of the location can give you the confidence to make point-blank offers. I'm hyper focused on a few neighborhoods and know a great deal when I see one.

A lot of people are over paying for property. I don't know if it's the same in Cincinnati but there's nothing we can do about it. Agents have preferred investor friends. It was probably "sold" before it ever hit the MLS...

What kind of offers are you making?

How to make an offer in a competitive market?

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