Putting multiple offers on multiple properties

[Christopher Lane]

Hey team, so I am looking to put offers on multiple listings.  I want to do this because they will all likely be lowball offers and most will not get accepted, but I'm hoping that some will.  With that being said, can I do this? Is this allowed?  Why should or shouldn't I? If I get multiple offers accepted, am I obligated to follow through or do I have the right to pull out?

Bonus question - What is the lowest % down on a commercial loan?

[Don Konipol]

@Christopher Lane

Shotgunning offers may help you get one or two accepted, but there is serious downside to this strategy

1. You will become known as a “flake” to the commercial brokerage industry, and you won’t be getting contacted about any quality off market investments

2. You’ll need to do a lot of due diligence upfront; if you wait until your offer’s accepted to do due diligence, most deals will fall through and your reputation will be worse than 1. AOve.

3. Brokers will be obligated to legally bring your offer to clients but will recommend that your offers be trashed even if they’re in the ballpark price wise.

4. The lowball offers most likely to be accepted are on the least desirable properties.

5. You won’t Be able to concentrate on the few good deals that always require personal time with the broker and seller in order to conclude the transaction on favorable terms.

Your offers can contain “weasel” clauses making them contingent on due diligence. So your earnest money wouldn’t necessarily be at risk

When I sell a commercial property I want to see $10,000 earnest money or 5% of purchase price whichever is more. Despite what gurus claim about $1 earnest money, a note in lieu of earnest money, etc., my feeling is that if a buyer doesn’t have 5% of the purchase price available in cash, the likelihood of his being able to complete the purchase drops dramatically, and I don’t want to take my property off the market for 60+ days when the chances of the buyer being able to close are so low.

Back in the early 1980s I tried this shotgun approach, made 150 simultaneous offers (on SFR and duplex), all lowball, and ended up buying 2 houses. But most of the negative consequences I outlined above happened, and it took me about four years to rehabilitate my reputation.

A similar approach using auto generated offers is being utilized in Phoenix currently, in the SFR market. I think it would be tougher to use in the commercial arena.