Low balling

[J G]

How do you handle low balling a seller for their property? A seller is warming up to a lease/purchase deal, but I think he's overvaluing his home. Here are the facts: he paid 92k in 2005, took out a 73k mortgage, offering the home at 119k. The house next door to seller sold for 110k ,4 months ago. The way i see it the seller has 20 to 40k equity in his home. Seller has stated that he's motivated, but is he really? What kind of offer should i make?

[Don Konipol]

If you make an offer based on what you are willing to pay then it is not a low ball offer! The seller's asking price does not determine if an offer is a lowball, it's the market value of the property that determines if an offer is a lowball. So if the seller is asking $200,000 and the property is worth $100,000, than an offer of $90,000 is not a lowball, it is realistic (of course the seller may not see it that way). Many new investors become intimidated by asking prices, spend lots of time "working" an unrealistic seller, then spend even more time trying to make a mediocre deal work. Give it you best shot, make an offer that works for you, and if rejected move on to more fertile ground. Most important: To be successful in real estate investing accept that out of every 20 deals you are considering, only one may ultimately close!