How am I supposed to make an offer?

Question

I have a motivated seller that wants to sell his tenant occupied  home. I have a bit of a problem. I spoke with the seller and got information about the house that is different from what I found in public records. The seller said the house has three bedrooms two bathrooms and a den, but he does not know the square footage. I checked public records and online sites that says the houspe has two bedrooms, one bathroom, and is 1,008 square feet. How am I supposed to make an offer on a home that has inaccurate information? I cannot run comps on property with inaccurate information, and I will not be able to determine the ARV to make a good offer.

Chris Seveney · Answer

@Antonio Bodley

Have you gone inside this property? I think it’s pretty easy to tell if it’s a 2 or 3 bedroom

Also how are you making an offer if you have never been in the property or even able to run comps?

Antonio Bodley · Answer

I have been looking for buy and hold investors who rent homes in the area to see if they are interested. I reached out to my list of buyers, but I have not heard back from them. I have been searching buyers first before putting the property under contract. He doesn't have an asking price for the house. He wanted me to give him whatever offer and see if he takes it or not.

Bryan Montross · Answer

If you are going to make the offer without ever seeing the inside, go with public records and run your comps from that. Also, since you won't know the actual condition of the property, you'll need to account for that in your offer. It will be a really low offer compared to what he is looking for.

Another option is to price it the way the seller is telling you, with contingencies giving you the chance to back out if the house is not the way it was told to you. Then if it is only 2 bed instead of 3 you can renegotiate price or back out. Once it is under contract you need to be able to see the inside of the house. If he doesn't let you in, I would back out and not take the deal. You'll also want to know what the terms of the lease you are inheriting is and decide if you are OK with that.

And sometimes, it is good to just walk away and put your effort into another deal that might make you as much money for less effort.

Antonio Bodley · Answer

The house is not listed. There is no listing agent. That "recently" information was given to me by my VA after they cold called the seller. And the house does not have a basement. I rode by to see the outside of the house myself. Tenants are living there.

Theresa Harris · Answer

I guess it depends what they mean by 'recently' and it may not have been them.  Could have been previous owners.  Ask the listing agent why the city's records are so different.

Antonio Bodley · Answer

Remodeling: No remodeling has been done recently but is still in good condition and almost like new: a new 50-year metal roof; new central air and heat; new cabinets, sinks, etc., in the kitchen and baths; new flooring; a new driveway.

Theresa Harris · Answer

I'd also check if renovations were done and if so were permits pulled?  Did you walk the house to see why the records are different (ie did they finish a basement and add a bathroom, den and bedroom)?

Dustin Tucker · Answer

Use the public records for your offer, and negotiate hard, I would add in the special provisions that offer price is based on $x/sq.ft if the house is smaller than the listed sq.ft the price will be adjusted based on the sq.ft.  I wouldn't say anything about the house being larger, then if it is, then that's in your favor.

How am I supposed to make an offer?

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