How do you make your LOWball offer? ($8-12k)

Question

I've found a property that would work well with multiple exit strategies...but the maximum I can get it under contract for and cover my a** is $12k.

This is a FSBO with $35k or best offer written right on sign. Talked to owner's son and looked at house yesterday.  It has "that smell" so I'm assuming most flooring and most sheetrock will have to go, plus full HVAC new install, and an entire roof.  Basically almost a full gut inludinf most mechanicals and some foundation.

So...I'm a pretty good salesman when it comes to AV stuff, and getting motivated sellers to come down on their price...but I've never had the balls to offer 10 or less.

Help me grow some, and help me with some ideas on how you make those low offers?

Thanks!

Shane Woods · Answer

I just realized I never updated this.  I made the offer, they understood and thanked me for my time.  But that's not a deal.  Next.  :)

Shane Woods · Answer

I appreciate the insight.  Nice to get the kick in the a** to remember just make the offer.  They'll take it or they won't lol.

I like leading into it with all the problems and what it could cost to fix...and finish with how fast we can get his cash...

All good responses, thanks again!!!

Cristina Corredor · Answer

Don´t be sentimental about it. Do the offer you can make after analyzing your numbers, doesn´t matter if they will get offended by it, the worst thing is that they will say no, thanks. Explain why you are offering that, and if it doesn´t work for them then move to your next deal. It´s a number´s game!

Terry Royce · Answer

Build your case for the offer, using the repairs needed, and comps that support it.
Don't just throw the offer out, explain it and make them understand why it is what it is.

Don't over think it.

Deborah Saddler · Answer

I totally agree with Dawn A. & Joel Owens, that's how I would go at it.  It is what it is, either they are motivated to go lower or they are not.  If not going on to the next.

Jeff S. · Answer

I wouldn’t try tactics, games, or trying to get them to “think” anything.  How about a straightforward approach?

Make it clear to the homeowner that you are an investor and have to make a profit. You provide a service. The benefit you bring is that you can buy their home in as-is condition, close quickly, and for cash.  This will be a fast, hassle free transaction, with little effort on their part.  For this, you can pay them $12k for their property.

Alternately, point out that they can pay to bring their home to top dollar condition themselves by dealing with a contractor, the building department,  and then selling it FSBO or by using an agent.

There’s no need to put the house down or make them feel bad by pointing out all the defects.  They already know this.  Similarly, you might want to change your opinion of your offers.  These are not lowballs.  You are paying market value for a house that needs a lot of work and you're providing a service to do this work.

Jeff

Joel Owens · Answer

Anytime I look at a property I look up up the tax assessor records and deed history.

It's not for how much they paid but how long they have owned the property and who the owner is.

Someone who just bought something and is trying to resell soon with a low offer you are likely taking away their spread and it will be a non-starter. I do not put much time into properties where I do not think I can get them to where I want to be.

Make your offer and point out the issues. Tell them this is the most you can pay. If they say no way give them your card and tell them if anything changes to give you a call.

Kristopher Jensen · Answer

Since it's FSBO by a relative of the owner, I would try the tactic of playing off of the personal connection/sentimentality by letting him know you think it's a great house that's worth "saving" but it's going to take a lot of work and money to do that.

Let them know that most buyers would be looking to tear it down and build something else on the lot, but you'd like to preserve their home (here comes the but...) but, the only way to make that work financially would be to purchase the home for significantly less than their thinking.

Then finish your pitch with your price. "In order to make the numbers work, I'm at $8,500 cash. What do you think?"

Good luck!

Dawn Anastasi · Answer

If $12k is your best offer, that's your best offer.  Perhaps lead in with your concerns. One advantage that you can offer them is that they wouldn't have to do ANY work, you'll buy it as-is.