I recently lost a deal to another investor as it was on the thinner side and I didn't want to get into a bidding war with the other investor.
The seller said she would have rather sell to me as some things didn't add up about the other investor, but I was $3K below the other offer. A couple of items were that the other investor didn't care about having the insurance company put a new roof on it this week (at no cost to the seller) or that they were using an out-of state title company. I looked up that title company, and there is a BBB alert on it, as they don't respond to BBB correspondence anymore. The other investor also claimed to be paying cash, but only wanted to put down $500 in earnest money. I have bank statements in my own name, but even so I didn't want to go higher on this deal.
Regardless, its much easier when there isn't a competitor, but I better get used to it, as other people are marketing to the same sellers. What do you use to better distinguish yourself and your offer when other competing with other offers? It seems that those who do nothing more than position themselves to make the second offer do better?
@Burt L. this is a people business and I beleive if the repoire was bulit up from the first phone call you could have locked this deal into a contract. Continue to be above board and ethical and business will start to take you at your word.
@Burt L. ,
1) Establish a reputation for always getting the deal closed, early or on time. Show the documents or references to demonstrate this
2) Money, money, money. Let the listing agent double-end. Bump up the wholesale fee. Get the decision-makers or influencers some cash and their ear.. then lastly, there's bumping up the purchase price if it makes sense..
3) Tighten/eliminate contingencies to your comfort level, shorter close
4) Offer a small non-refundable deposit, to show them you're serious about it, and not just fishing around, with no money on the line
5) Provide asset statements showing you have plenty to cover it, even if you don't plan on going higher or even paying cash..
6) Send a letter with your asset statement demonstrating your track record, your plan, cash to do it, that you're comfortable so far etc.. Like a residential "love letter" to the seller, but you're not talking about why you want to live there. You're demonstrating your investment experience, desire to grow portfolio, and strong willingness and ability to close. Also try to inspect whatever you can ahead of time, and write about how much due diligence you've done so far, and how you intend to follow through. (hard money/nonrefundable deposit puts your money where your mouth is here)
I let listing agent double-end last FNMA foreclosure, and got him to accept my conventional financing offer, even though he stated they were accepting cash-only offers the first thing when I first spoke with him. Funny how that changed with some negotiations and an extra $10K in commission for him... hmmm... ;)
Then closed conventional financing in 18 days. And was easy to deal with. So he is also happy to let me use him as a reference for the next agent, wholesaler, etc, I buy from..
One more thing I forgot:
I always ask the listing agent or seller if there's something they need or would like, that would make the deal more attractive. Sometimes these won't cost you anything:
Seller needs extra time to fined 1031 exchange. Seller would like to stay in house and rent for a few months after close of escrow before they move to XXXX. They need to close in 12 days. etc etc
Find out how to meet their needs. Be flexible...
I forgot to follow up on this - the other wholesaler couldn't find a buyer and I got the property and did sell it. When I went over after signing the contract, the other wholesaler was still showing it with an expired contract.
The seller told me on the phone to call the police, which I relayed to the other party in real time. Never saw anyone take a lockbox that quickly, and I got a new pair of sunglasses too. It was all a little too exciting for me.
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!