Finding Properties Under Fair Market Price

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One of our forum members, Snowstar, asked a question on how to find properties under fair market price. Charles, another member, had a good response, which I wanted to share with everyone:

You won’t be fast enough to find and buy real estate “under the fair market price”. If such a property is advertised, the hawks would be there immediately!

When you stop looking for that advertised under market value, you’ll feel much better about this exciting, fun and potentially profitable game of real estate.

It takes skills to negotiate a price that is acceptable. The buyer makes the deal, not the seller. The seller starts at a wish price that is too high. Skills in managing the due diligence process is necessary to obtain information to negotiate a price that works.

Making “Trial Offers” is helpful in testing seller’s motivations. Finding the good deal is difficult, but making good deals is done on purpose. There is a system and a formula to follow.

Practice contract construction, writing sample offers on properties and studying clauses to control, delay, and assign.

This focus on negotiation is something most people tend to overlook. Many investors think the hard part is finding the right property. In fact, I believe the most difficult, yet exciting part is the negotiation. We’ll get into that soon. Stay tuned…..

About Author

Joshua Dorkin

Joshua Dorkin (@jrdorkin, Google+) founded BiggerPockets.com when he saw a need for free, trustworthy information about real estate investing online. Over the past 12 years, Josh has grown the site from self-funded hobby to full-time job and passion. Today, BiggerPockets brings together over 600,000 members, housing the world’s largest library of real estate content, iTunes’ #1 real estate podcast, and an array of analysis tools, all geared toward helping users succeed.

1 Comment

  1. i agree, i currently am in escrow on a fourplex. The list price was $1,075,000, which is high by $100,000. I made a low ball offer of 875,000, they responded back at 975,000, i then countered back at 925,000 and much to my surpirse, they accepted. I then had a bunch of inspections done and found some minor problems, i told the seller i would walk if these were not addressed, i was able to bluff them out of an extra 25,000. My total price is 900,000 which is 75,000 under what is worth. what i am trying to say is Undervalued prorpeties will sell in a day, but overpriced prorpeties will sit on the market and make thew seller much more mtoivated. Lowball offers dont hurt, its worht a shot, just be sure you have the money if they accept your lowball offer:)

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