Seller wants a offer before giving asking price

Newark, New Jersey
Wholesaling
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Seller wants a offer before giving asking price

Kuron McGraw
Wholesaler · Newark, NJ · Member since 2018 · 30 posts · 8 votes

Good afternoon BP, I have talked with a seller and he hasn't given an asking price on the property. He wants me to give him an estimate because the offer has has received are low ball offers.  The property needs finish work hvav,electric floors, garage but I don't know how much to start the bid. He also hasn't agreed to meet at the property for an initial walk either. I was thinking of offer his initial purchprice just get him talking more about want he wants for the property any ideas?

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Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
4y

So what.  Your offer shouldn't be based on the AP anyway.  Your offer should be based on the maximum offer your analysis allows within the PV that is determined from your market analysis.  If that's too low for the seller, then the property isn't a deal for you, and you should walk away to the next property.

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    I'd just walk on the idiot. But if you think there is a screaming deal here, just look on Zillow to see what comparable houses are going for. Have a Home Inspector give you a list of what the major problems are and get an estimate from a GC. Subtract that from the comp number and take of another 20% (for ooops and profit)

    7Reply
  • Dan Schwartz
    Real Estate Investor · Tempe, AZ · Member since 2012 · 874 posts · 648 votes
    4y

    @Kuron McGraw is he a willing seller or are you trying to talk him into selling?

    1Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    4y
    Quote from @Kuron McGraw:

    Good afternoon BP, I have talked with a seller and he hasn't given an asking price on the property. He wants me to give him an estimate because the offer has has received are low ball offers.  The property needs finish work hvav,electric floors, garage but I don't know how much to start the bid. He also hasn't agreed to meet at the property for an initial walk either. I was thinking of offer his initial purchprice just get him talking more about want he wants for the property any ideas?


     I assume this is an off market deal. Make him an offer and tell him if he does not like it, to make a counter.

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  • Kuron McGraw
    OP
    Wholesaler · Newark, NJ · Member since 2018 · 30 posts · 8 votes
    4y
    Quote from @Bruce Woodruff:

    I'd just walk on the idiot. But if you think there is a screaming deal here, just look on Zillow to see what comparable houses are going for. Have a Home Inspector give you a list of what the major problems are and get an estimate from a GC. Subtract that from the comp number and take of another 20% (for ooops and profit)

     Yea I started too. Ok I'll check the comps. I'll remind him we need to actually walk the property for realistic numbers and if not follow up later. 

    0Reply
  • Kuron McGraw
    OP
    Wholesaler · Newark, NJ · Member since 2018 · 30 posts · 8 votes
    4y
    Quote from @Dan Schwartz:

    @Kuron McGraw is he a willing seller or are you trying to talk him into selling?


     No he said he wanted to sell. 

    0Reply
  • Kuron McGraw
    OP
    Wholesaler · Newark, NJ · Member since 2018 · 30 posts · 8 votes
    4y
    Quote from @Chris Seveney:
    Quote from @Kuron McGraw:

    Good afternoon BP, I have talked with a seller and he hasn't given an asking price on the property. He wants me to give him an estimate because the offer has has received are low ball offers.  The property needs finish work hvav,electric floors, garage but I don't know how much to start the bid. He also hasn't agreed to meet at the property for an initial walk either. I was thinking of offer his initial purchprice just get him talking more about want he wants for the property any ideas?


     I assume this is an off market deal. Make him an offer and tell him if he does not like it, to make a counter.


    0Reply
  • Kuron McGraw
    OP
    Wholesaler · Newark, NJ · Member since 2018 · 30 posts · 8 votes
    4y
    Quote from @Kuron McGraw:
    Quote from @Chris Seveney:
    Quote from @Kuron McGraw:

    Good afternoon BP, I have talked with a seller and he hasn't given an asking price on the property. He wants me to give him an estimate because the offer has has received are low ball offers.  The property needs finish work hvav,electric floors, garage but I don't know how much to start the bid. He also hasn't agreed to meet at the property for an initial walk either. I was thinking of offer his initial purchprice just get him talking more about want he wants for the property any ideas?


     I assume this is an off market deal. Make him an offer and tell him if he does not like it, to make a counter.



     Yea I will, thanks

    0Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @Chris Seveney:
    Quote from @Kuron McGraw:

    Good afternoon BP, I have talked with a seller and he hasn't given an asking price on the property. He wants me to give him an estimate because the offer has has received are low ball offers.  The property needs finish work hvav,electric floors, garage but I don't know how much to start the bid. He also hasn't agreed to meet at the property for an initial walk either. I was thinking of offer his initial purchprice just get him talking more about want he wants for the property any ideas?


     I assume this is an off market deal. Make him an offer and tell him if he does not like it, to make a counter.


    Go low....you never know what will happen. Like if you think it's worth $250k, offer $150 - 175k

    4Reply
  • Doug P.
    Investor · Kitchener-Waterloo, Ontario · Member since 2008 · 1k+ posts · 1k+ votes
    4y

    @Kuron McGraw He's not motivated. Motivated sellers have no problem answering simple questions like how much they need. Does he have a mortgage on the place? If not I'd offer 50% of its current value. If he does and it's worth taking over I'd tell him: "Good news! I can take over your payments and you won't have to pay me a cent!"

    4Reply
  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    4y
    Quote from @Bruce Woodruff:
    Quote from @Chris Seveney:
    Quote from @Kuron McGraw:

    Good afternoon BP, I have talked with a seller and he hasn't given an asking price on the property. He wants me to give him an estimate because the offer has has received are low ball offers.  The property needs finish work hvav,electric floors, garage but I don't know how much to start the bid. He also hasn't agreed to meet at the property for an initial walk either. I was thinking of offer his initial purchprice just get him talking more about want he wants for the property any ideas?


     I assume this is an off market deal. Make him an offer and tell him if he does not like it, to make a counter.


    Go low....you never know what will happen. Like if you think it's worth $250k, offer $150 - 175k

     What Bruce said. Make him a low offer and let him counter if he doesn’t like it.

    As far as him telling you people gave him a lowball offer you should’ve asked him what the lowball offer was. There is a high probability that he wants close to retail. If he already had offers and there are a lot of new Whole Sellers making close to full asking price right now chances are you’re wasting your time dealing with a sellers that wants full retail for a fixer-upper.

    2Reply
  • Kuron McGraw
    OP
    Wholesaler · Newark, NJ · Member since 2018 · 30 posts · 8 votes
    4y
    Quote from @Joe S.:
    Quote from @Bruce Woodruff:
    Quote from @Chris Seveney:
    Quote from @Kuron McGraw:

    Good afternoon BP, I have talked with a seller and he hasn't given an asking price on the property. He wants me to give him an estimate because the offer has has received are low ball offers.  The property needs finish work hvav,electric floors, garage but I don't know how much to start the bid. He also hasn't agreed to meet at the property for an initial walk either. I was thinking of offer his initial purchprice just get him talking more about want he wants for the property any ideas?


     I assume this is an off market deal. Make him an offer and tell him if he does not like it, to make a counter.


    Go low....you never know what will happen. Like if you think it's worth $250k, offer $150 - 175k

     What Bruce said. Make him a low offer and let him counter if he doesn’t like it.

    As far as him telling you people gave him a lowball offer you should’ve asked him what the lowball offer was. There is a high probability that he wants close to retail. If he already had offers and there are a lot of new Whole Sellers making close to full asking price right now chances are you’re wasting your time dealing with a sellers that wants full retail for a fixer-upper.


     I asked him what the other offers were, or if he had a range and he didn't want to disclose the information. We are suppose to meet tomorrow at 1pm to do a walk thru. I asked a local GC to meet me there for estimates. I told the seller what the median price was for the area and made clear that this wasn't me making an offer on the property. So we will see. I will update post tomorrow.

    0Reply
  • Jonathan BombaciBusiness Member
    Real Estate Agent · Lowell, MA · Member since 2019 · 1k+ posts · 1k+ votes
    4y

    This is pretty common with off-market deals. You should try to figure out what the other offers were that he received. Try to get him talking about that and say yeah there are alot of crooks out there what did they end up offering? And don’t let it go, if you push hard enough you’ll get it out of him. If that doesn’t work then give him a big range and say you can’t give him a better price until you see 100% of the property.  If your comps show it could be worth $250k but you don’t know the condition then I would say it could be anywhere between $150-$200k depending on a lot of different factors. Use that to book the appointment and tour the property then go from there. Always be working trying to get what the previous “low ball offers” were so you know where he’s grounded and build off of that. 

    Best of luck.

    Jon

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  • Billy Daniel
    Rental Property Investor · Russellville, AR · Member since 2014 · 688 posts · 509 votes
    4y

    Doesn't sound like he really wants to sell.  Or maybe he's just dumb.  You're not allowed to be upset about low ball offers if you wont give an asking price....

    5Reply
  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    4y

    So what.  Your offer shouldn't be based on the AP anyway.  Your offer should be based on the maximum offer your analysis allows within the PV that is determined from your market analysis.  If that's too low for the seller, then the property isn't a deal for you, and you should walk away to the next property.

    9Reply
  • Brian Ellis
    Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
    4y
    Quote from @Joe Villeneuve:

    So what.  Your offer shouldn't be based on the AP anyway.  Your offer should be based on the maximum offer your analysis allows within the PV that is determined from your market analysis.  If that's too low for the seller, then the property isn't a deal for you, and you should walk away to the next property.


     Agree 100%, just make an offer on what makes sense to you. Highest and best, based off of numbers that you’re happy with. 

    4Reply
  • Jared HottleBusiness Member
    Real Estate Agent · Cedar falls IA Waterloo, IA · Member since 2020 · 902 posts · 549 votes
    4y

    I think I agree with Bruce. Seems like it may not be worth your time if he wont even let you walk the property and already is complaining about low-ball offers. If you could walk it and figure out how much it needs to be rentable then I think you can get to an offer. When they want me to throw an offer out first I usually explain to them the 1% rule and what I think it will rent for or is currently renting for. If the 1% rule doesnt happen in your area then you may need to adjust that. I find educating before an offer at least makes you seem fair and honest. 

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  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    4y

    @Kuron McGraw I would just make an offer on assumptions and 70% ARV, he's probably not that motivated though or he'd tell you a price. Get him talking and he may let a price slip, I've had that happen often

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  • Thomas Higgins
    Investor · Pittsburgh, PA · Member since 2016 · 78 posts · 45 votes
    4y

    Underwrite and offer.

    It is always at least a warm lead if they are asking for an offer. Remember to try not to offend the seller. If they don't sell today they may in a few years. Keep them on you short term follow up list. 

    Happy hunting! 

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Quote from @Doug P.:

    @Kuron McGraw He's not motivated. Motivated sellers have no problem answering simple questions like how much they need. Does he have a mortgage on the place? If not I'd offer 50% of its current value. If he does and it's worth taking over I'd tell him: "Good news! I can take over your payments and you won't have to pay me a cent!"

    doug were you been ?  hows things up in CA  are prices settling down like the US.. how about CA interest rates  following ours ?
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  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    4y

    @Kuron McGraw I have t tried this but since it’s sight unseen why don’t you offer a range broken down by conditions of major items? Gets your lowball in there and sidesteps his pride issues.

    For instance (numbers are silly)

    If kitchen is garbafe and needs to be replaced $1 If modern and high finish 40k

    Wiring all knob and tube one price all updated another and so on

    Make sure the low end of the range is lower than what you want to pay.

    Now the discussion is over condition not price.

    0Reply
  • Doug P.
    Investor · Kitchener-Waterloo, Ontario · Member since 2008 · 1k+ posts · 1k+ votes
    4y
    Quote from @Jay Hinrichs:
    Hey Jay! I opted out of the craziness the last few years. My local market saw a 62% run up from January 2020 to February 2022 and now it's down nearly 30%. Interest rates went from 1.6% in November 2021 to over 5% today and are expected to rise another 75 to 100 basis points next month. Wild times!

    What have you been up to?
    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y

    Building houses  prices for new build holding so far 

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  • Sebastian Hernandez
    Contractor · Morris County, NJ · Member since 2020 · 186 posts · 91 votes
    4y

    @Kuron McGraw My suggestion is to run comps. Then subtract your expenses such as renovation costs, attorney fees holding costs, and desired profit. For example, if the comps indicate the house renovated is worth $500,000 subtract your expenses and profit ($200,000) and that should get you the max offer $300,000. Obviously do not offer him $300,000 right away. Hope this example helps and keep your numbers in mind when negotiating. 

    0Reply
  • Patricia Steiner
    Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
    4y

    Don't go into this without having documenting why your offer is the right one...and don't expect the seller to accept it because he could just be using you to set his price.  Get a Broker Opinion on the value of the property; any Real Estate Broker can do one for you and represent you in the sale at no cost to you as the buyer.  By doing so, you'll have the comps that meet the national appraisal standards as well as have land value and adjustments for condition.  The seller won't care what it will cost you to repair/renovate it so don't even go there. Focus on what it is worth based on current location and condition.  Take the documentation with you and let him know that a dollar today is worth more than one tomorrow.  

    Hope this helps and that you prevail.

    1Reply
  • Brad S.
    Investor · Pasadena, CA · Member since 2017 · 613 posts · 523 votes
    4y
    Quote from @Joe Villeneuve:

    So what.  Your offer shouldn't be based on the AP anyway.  Your offer should be based on the maximum offer your analysis allows within the PV that is determined from your market analysis.  If that's too low for the seller, then the property isn't a deal for you, and you should walk away to the next property.

    ***********************************

     ↑ This ↑

    You only need to know a Seller's situation, insofar as to attempt to create an offer or situation which will better meet their needs (i.e. creative real estate). But, even so, you should do your underwriting/analysis to determine an offer that works for YOU and YOUR plans. When a seller receives multiple lowball offers, that may be because those offers represent the current value and the seller may have unrealistic expectations (referring to them as "lowball"). But, you don't have to take on their unrealistic expectations, unless you run a charity.

    One of the most successful RE investors I know, would figure out his highest offer price and stick to it, without wavering. He developed a reputation for always throwing out his highest, and when he would buy through the same agents, they knew not to counter and became his advocates to the seller.

    Bottom line - If you're trying to get a "deal," you need to decide at what price it is a "deal" to you, present it to the seller, and move on. There are too many potential deals to spend time on one, which is most likely not going anywhere.

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