Cant buy a house

61 Replies

I am working with a good Realtor and I make offers well above asking.  I just lost out on another offer I made.  It will be interesting to find out the winning bid upon closing.  The house before this I made a cash offer with no contingencies and, an offer $1500 LESS than mine was accepted instead.  

Is there some "inside track" I am not aware of?  

Originally posted by @Dawn Anastasi:

Are you offering to banks or to private sellers?

 Hi Dawn.  I look at the list of houses my Realtor sends me till we find several we want to view.  Then we make offers on at least two of those.  Sometimes they are banks, but lately I have noticed they are Realtors selling to other Realtors/investors.

Mark Forest 

If you are making a cash offer with no contingencies and still losing, then either your offers aren't being presented or the other buyer is paying for all closing costs and tax proration. For a seller if both offers are cash, then it just comes down to numbers.

Originally posted by @Sharad M.:

@Steve Might 

 it just comes down to numbers.

That is what I used to think, but after making inquiries I was told the seller had a preference for the other buyer because he thought he could close for sure.  I told him I too have cash and would have closed, but they maintain that some investors with higher offers do not follow through. 

Are you using any wording or contingencies that is turning away the sellers? Perhaps a very low deposit amount or a 21 business day inspection period (sounds crazy but I have gotten many offers with this)... Try submitting an offer with a higher deposit and remove or do a 3 day inspection period and see what happens... Good Luck!

Originally posted by Mark Forest:
Originally posted by @Sharad M.:

Mark Forest 

 it just comes down to numbers.

That is what I used to think, but after making inquiries I was told the seller had a preference for the other buyer because he thought he could close for sure.  I told him I too have cash and would have closed, but they maintain that some investors with higher offers do not follow through. 

Offer a very high $$ non-refundable EMD deposit with no contingencies

I have NO contingencies.  Many of you have mentioned a deposit.  The sellers are not even mentioning a deposit.  You simply submit a bid, they accept or deny and you close on the house. Good faith deposits are more for owner occupied homes.  I am after investment properties which close upon acceptance.  The problem is  I need to learn a secret handshake or some such thing to get my offers accepted.

Originally posted by @Steve Might:

I have NO contingencies.  Many of you have mentioned a deposit.  The sellers are not even mentioning a deposit.  You simply submit a bid, they accept or deny and you close on the house. Good faith deposits are more for owner occupied homes.  I am after investment properties which close upon acceptance.  The problem is  I need to learn a secret handshake or some such thing to get my offers accepted.

The seller may not be mentioning a deposit but you said that the issue was the sellers feel that there is a possibility you will not close. So your offer of a non refundable EMD gives them what they ARE looking for. If you have no contingencies and you have put up an EMD of say 25% of the purchase price, then were you to back out the seller would be able to keep the money. That gives them the confidence that you will close.

And your statement about good faith deposits (earnest money deposit) being for OO homes is inaccurate. I have never made an offer with anything less than 5K EMD, and the last two REO purchases I have had requested 10% EMD in their counter offers.

if you have no contingencies and no earnest money it is basically like having every contingency with $5,000 in earnest money. If you don't close what does the buyer get? Nothing, who cares if you have no contingencies if you aren't putting up earnest money. 

I agree with others, lack of EM is very likely the reason you are being snubbed. Mark Forest 

  

And yes, as pointed out by @K. Marie Poe below - ability to provide REAL proof of funds (bank statement showing balance that covers offer price) is also key.

Originally posted by @Steve Might:

I have NO contingencies.  Many of you have mentioned a deposit.  The sellers are not even mentioning a deposit.  You simply submit a bid, they accept or deny and you close on the house. Good faith deposits are more for owner occupied homes.  I am after investment properties which close upon acceptance.  The problem is  I need to learn a secret handshake or some such thing to get my offers accepted.

What price range are you talking about? If you're in a hot market with lots of investors combing the MLS, then make your cash offer with a large EMD, 10 day close (or less) and proof of funds. I can tell you from the seller side that I'll accept a slightly lower offer from a known buyer. There are so many new players making offers out there that can't really close quickly (or at all). To avoid those, I'll take the safe route. Just something to think about.

My Realtor only asks for proof of funds. I have a sufficint amount in a money market which I always fax to him. That has always been enough.

I will ask him if a deposit would help.

Originally posted by @Matt Devincenzo:
Originally posted by @Steve Might:

I have NO contingencies.  Many of you have mentioned a deposit.  The sellers are not even mentioning a deposit.  You simply submit a bid, they accept or deny and you close on the house. Good faith deposits are more for owner occupied homes.  I am after investment properties which close upon acceptance.  The problem is  I need to learn a secret handshake or some such thing to get my offers accepted.

The seller may not be mentioning a deposit but you said that the issue was the sellers feel that there is a possibility you will not close. So your offer of a non refundable EMD gives them what they ARE looking for. If you have no contingencies and you have put up an EMD of say 25% of the purchase price, then were you to back out the seller would be able to keep the money. That gives them the confidence that you will close.

And your statement about good faith deposits (earnest money deposit) being for OO homes is inaccurate. I have never made an offer with anything less than 5K EMD, and the last two REO purchases I have had requested 10% EMD in their counter offers.

 This.  Exactly, every word is right.  Give it a try and see if that turns out to be the secret handshake.

Here's an interesting trick that I learned and it seemed to have made a difference. I've been doing this for about 7 or so years now. And for the first 6, I could not get a single bank owned deal. Made no sense to me. Just couldn't get an offer accepted to save my life.

Then, finally, about a year ago, I tried something else. I called the listing agent or an agent that worked for the same broker as the listing agent, and put my offer in with them. Since then, I have magically picked up 3 bank owned properties in the past 10 months.

Now you tell me. Is that a coincidence? Or could it be that the listing agent will help steer the bank/asset manager to the offer thats coming from an agent in their office?

To me, I think the answer is obvious. I don't see any other possible explanation.

So my suggestion would be to pick some of the bank owned stuff and call an agent at the same office as the listing agent. Put in the offer through them. See what happens.

One other suggestion - use HUD and some of the other auction sites. HUD, in particularly, is all about the numbers. Highest bid is accepted - PERIOD. So you don't have to worry whether your offer has or doesn't have some contingency in there or some other politicking going on with it. Highest bid - as long as it meets their min reserve - is accepted.

But keep at it. You'll start getting deals eventually. At some point, its really about luck. Just need to get your offer in and hope that the next house is one that nobody bothered to take a look at.

Winter time is a great example of that. Banks - especially in the midwest - know there is very little buying activity. They also know that they're going to need to discount the houses more if they want them to sell soon. So if they get a good offer in on a house during the winter, they're going to jump on it a little bit faster than usual and accept.

I would change realtor and RE company ASAP. Then see if you still have the same problem.  Just my two cents worth.

Originally posted by @Mike H. :

Then, finally, about a year ago, I tried something else. I called the listing agent or an agent that worked for the same broker as the listing agent, and put my offer in with them. Since then, I have magically picked up 3 bank owned properties in the past 10 months.

Now you tell me. Is that a coincidence? Or could it be that the listing agent will help steer the bank/asset manager to the offer thats coming from an agent in their office?

That seems logical, but where do you get your current listing of houses from the MLS? If a Realtor is sending you his list I feel obligated to use him. Is there another source to get current house listings?


Originally posted by @Matt Devincenzo :

 The seller may not be mentioning a deposit but you said that the issue was the sellers feel that there is a possibility you will not close. S



Not that I in particular would not close.  He did not even know me.  I think realistically the person he sold it to was already a done deal.

Mark Forest 

If you are committed to the property, and planning to pay cash, send a sizeable deposit with your offer ... at Matt said, 25% (or more).

Money talks.

1(506) 471-4126
Originally posted by Mark Forest:

My Realtor only asks for proof of funds. I have a sufficint amount in a money market which I always fax to him. That has always been enough.

I will ask him if a deposit would help.

 Steve...you aren't selling to YOUR realtor.  You aren't even presenting the offer to your realtor.  It really doesn't matter what he/she thinks.  If the seller &/or their agent isn't taking your offer seriously, then it doesn't really matter what your realtor is telling you.  Clearly, what you're currently doing isn't working.  You remember what the definition of insanity is, right?

I would change realtors. We have done very well in California. I closed two houses in Charleston and was having tons of trouble. I suddenly changed realtors and my offer was accepted at a GREAT price! . I have noticed that  a GREAT realtor makes a huge difference.

Mark Forest 

We always include a deposit, some times very substantial, never cash, usually a personal/business check and on some occasions a cashiers check.  banks seem to like those cashier checks.

I tell clients that I represent that the deposit should not be puny.  For example a $100 deposit on any property is way too small.  It shows, that maybe the buyer won't close and therefore is putting up a small deposit that they can walk away from.  I tell the clients that the deposit will be applied to the purchase price and if the offer is not accepted or the seller can't close they get the entire deposit back.  And when dealing with a real estate broker, the funds must be deposited in an escrow account and are regulated by state laws.  Its not a real estate agent's vacation fund.

On occasion, not very often, I have personally put up an EMD of 100% of the purchase price. I even did this with a six figure deal. I wanted to convey to the seller that this no contingency offer was as solid as it gets. either I close and they get the six figures, or I don't close and they STILL get the six figures. The offer had no contingencies, no financing contingency and no inspection/due diligence contingencies. But I did settle with an 80% LTV mortgage, its just that that was not written in the contract.

I've used the no financing contingency and actually settling with a mortgage many times.  Its done to present to the seller that when I say I'm buying a property, I'm going to settle.

Most of my purchase contracts are cash, settle quickly, with no contingencies.  I feel that gives me the best opportunity to buy at a bargain price.  I'm a cash buyer and can settle fast, if the seller doesn't want to accept my offer....NEXT.

A friend of mine was looking to buy an unlisted multi-unit directly from the seller, who was advertising the property himself. My friend got the property with an offer LESS than a competing offer because he did two things. 1. He talked to the seller and build some rapport, telling the seller of his background and wishes for the property. 2. His offer even with a financing contingency and a lower price had a higher EMD.

And as they taught in real estate law, all contracts must have a consideration;  therefore it can be argued that your offer without a deposit ( a consideration) is not a valid contract.   

Mark Forest  hey Steve, I understand your situation and I believe there are 2 ways to improve this. 

1. Put higher % of money deposit. For me, in california liquidated damages can seek 3% of deposit (maximum) refer to residential purchase agreement . But I always put 5% to make my offer stronger (even though the max is 3% so if everything gone wrong I still get 2% back) .

2nd, you might need to encourage your realtor to be more passionate about each offer. Communicate with the listing agent as much as possible and make he/she more comfortable with you and believe that you can close! Such things like "what would you like to see from me to close this deal for us" to making sure all offer requirement is written the way listing agent wants it. Let's say, if listing agent asked for 1 day to wire in the deposit on MLS. You make sure you mark the one day wiring. A lot of time, it's the little details that counts!

I am saying that because I just closed a deal at 1.1m and 80% hard money, 5 days inspection contingency. And the listing agent never seen a hard money, yet he still picked me over 3 other strong offer! 

I hope it will help! 

Realtor, every time. It's his job to know the secret handshake. If he hasn't brought up  what the good folks at BP have suggested here, you need a new guy, or girl.

Originally posted by @David Krulac :

Mark Forest 

On occasion, not very often, I have personally put up an EMD of 100% of the purchase price. I even did this with a six figure deal. I wanted to convey to the seller that this no contingency offer was as solid as it gets. either I close and they get the six figures, or I don't close and they STILL get the six figures. The offer had no contingencies, no financing contingency and no inspection/due diligence contingencies. But I did settle with an 80% LTV mortgage, its just that that was not written in the contract.

  

I can confirm from the seller side that 100% EMD or full funds into escrow in a couple of days makes all the difference. I pay attention to those offers.

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