Our first deal that wasn't
My husband and I are just getting started in REI (Buy and Hold), and made an offer on a property Oct. 6, the first day the seller would accept offers (property was listed 10/2, we saw it 10/3 and our agent put the offer in first thing the morning of 10/6) . Here are the details (if I have left anything important out, please let me know):
- List price of $125K
- ARV of $140K (possibly higher as there were two almost identical homes - lot size, floor plan, sq. ft - under contract on the same street for $150K - $160K that could have positively impacted comps depending on what they ended up selling for.)
- Rent of $1,150 - $1,200 (based on other rentals on the same street)
- Great school district and location
- Cost of Repairs - $8K-$10K (based on our limited experience - we would have had it inspected and looked at by a GC in due diligence had our offer been accepted).
- Our offer - $105K cash, 7 days for seller to respond, 7 day due diligence and close date of Oct. 27.
I received notification via Zillow (where I had added the property to my favorites) on Oct. 8 that the property was under contract (our agent was never notified).
I would love some feedback on whether our offer made sense. Did we miss out on a deal because we underestimated comps and could have offered more? Or because we overestimated repairs (there was definitely a roofing issue - possible replacement, and a big hole in the ceiling on the first floor with water leaking into a bucket below it)? Other thoughts?
Thanks in advance!
Most Popular Reply
It is quite possible that the seller got a better offer. It sounds like your offer was reasonable, I would think that a seller would be more inclined to go with a cash buyer since the questions of banks & financing is removed from the equation. Generally, when I make an offer, I give the seller 48 hours to respond. By giving them 7 days you allowed them to wait for other offers to come in & pick the best one. If you had gone with a shorter term, you force them to give you an answer (reject or counter) without the luxury of waiting a week for other offers to come in.
When I put an offer on a property I like to give myself a few exit's, I know some on here don't agree, but if something doesn't work out I like to have the option.
If you went through a buyers agent have them call the sellers agent to find out what the deal is.
Hope that helps.
JW