5 Secrets to Making Real Estate Offers that Stick

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Piecing together a killer offer that sellers accept at first glance is critical to my house flipping business – especially in today’s super competitive real estate market. If you flip houses, then you know that the best deals go quickly.

The key to success is to craft a real estate offer that stands out from the crowd. The goal is to have the seller take one look at your offer and say yes! As with anything else in this business, there are some secrets to making offers that stick.

First and foremost you must know your particular situation inside and out. Each house on today’s market has a story, and a reason why it is being sold. Each seller or bank is different, and is going to operate differently too. If you structure your offer the same way, each and every time, you are going to miss out on a lot of good deals.

The best offers are the ones that are catered to specific situations. This means that you may feel like a detective at times, hunting down key information from your broker and/or the listing broker. The more information you can learn about the potential deal, the better.

Consider integrating the following 5 secrets into your next offer. Remember, not all of these strategies will apply to your particular situation. Do some digging around, and then determine which of the below makes the most sense to include in your offer. Doing so will help your offer be the one that gets accepted.

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1)  Submit an offer that is higher than the asking price

Recently I was watching a particular property for a few months. I felt like the original asking price was just too high, so I figured I would be patient.

Low and behold the bank eventually lowered the asking price by $40,000. My eyes lit up as I instantly knew that this particular property was now a great deal. Of course the bank did this to create a bidding war of sorts.

Knowing this I placed my first offer 20% above the new asking price of $99,000.  In this particular situation, I knew it was worth the extra 20%, so placing my first offer well above asking price made plenty of sense. The bank must have thought so too, because they accepted my offer over any others.

2)  If You Can, Put in Cash

This is true whether it is your cash, or a lender’s. From the bank’s perspective, by placing a cash offer they view you as not subject to financing. Cash offers are extra appealing to banks in particular, if they have been previously dealing with offers that involve financing.

3)  Wave Inspections

This can be a little scary, but it’s a lethal way to structure a killer offer. I wave inspections quite a bit now, unless I feel like there is no one else putting offers in on a specific property. Of course you really need to rely on your broker to help you determine whether or not this is the case.

I recently waved inspections on an offer I placed on a house that I knew was receiving a half dozen or more other offers. Fortunately my offer was the one that got accepted. Who knows if waving inspections sealed the deal for me or not – but I like to think it at least helped.

4)  Say You Can Close in 2 Weeks or Less

We all know that banks are not going to close in 2 weeks or less. However when the bank sees that you are willing and able to close in 2 weeks, it makes your offer stand out. Of course only include this if you are actually able to close in such a short period of time.

5)  Know Who the Seller Is

Identify whether you are working with a bank owned property, for sale by owner, short sale or wholesaler and really try to understand the situation from the seller’s point of view. You need to cater your offer differently to each seller, and structure your offer in a way that will appeal to your particular seller.

This is by far the most important tip I can provide. Remember that you are working with people, even if you are dealing with a bank. There is always another person at the end of the line, reviewing your offer.

What can you do to make that person get excited about your offer? How can you make your offer stand out among the crowd?

In Conclusion

When it comes to making offers, the above 5 secrets are really just the tip of the iceberg. As with anything else in life, you will learn the most from getting out there and placing your own offers.

Expect to succeed, but don’t become discouraged if you miss out on a few deals – especially if you are just starting out in the house flipping business. Remember to stick to your MAO (maximum allowed offer) and be sure to not let your emotions get the best of you.

Believe me; I remember very well how nerve wrecking this process can be, especially if it is your first time!

What are some of your secrets for making offers?

tanjila

About Author

Mike LaCava

Michael LaCava is a full time real estate investor, house flipping coach and the President of Hold Em Realty located in Wareham, MA. He runs the website House Flipping School to teach new real estate investors how to flip houses and is the author of "How to Flip a House in 5 Simple Steps".

30 Comments

  1. If you have to use financing make ire you convey what your lender requires. I use a portfolio lender and they only require an appraisal if purchase price is over 100k. They don’t need utilities on and never have repair requirements.

    • I use bank financing on deals as well & my lender limit is anything over $150,000 for appraisal.
      True on utilities and depending on your record with a bank they will scrutinize more especially if it is the first deal you are doing with them.
      Thanks for your comments Mark

  2. Great post, all 5 are great ways to make your offer stand out. I have offered higher earnest money and even made it hard (non refundable) right off the bat to show them I am serious. I have also seen experienced flippers who are also agents have the listing agent write the offer and receive a double commission. To further sweetin the pot for the listing agent they can allow them to list the property after rehab as well basically giving the listing agent 3 commissions instead of one. If 2 offers are the same and you have shown ability to close quick and with cash then guess whose offer gets accepted? Some good relationships have been formed this way with asset managers and REO agents.

    I recently read an article that suggested going with highest and best on your initial offer. Banks always seem to try to create a bidding war and ask for highest and best anyways. Again you are showing that you are serious and sometimes you can end up with multiple deals from this seller, REO Agent or Asset Manager. Possibly without a highest and best.

    Great article and advice Michael!

    • Thanks for adding to those idea’s Ryan! I like the “hard” money idea & have not used that yet but may just try it out on competitive bidding. We have been trying to get more non mls deals to avoid the bidding wars. So true & great suggestion if you have your re license to waive your fee & offer the listing. It is about getting the deal and not the commission.

  3. Las Vegas is definitely in a HOT seller’s market. Here are some additional ways to get your offer to stick:

    1.) Run the CMA (Comparative Market Analysis) and find out an educated estimated value of the property.

    2.) Offer a strong purchase price. With homes selling around 10% above apprasisal value you will want to make your offer slightly above the CMA value. Offering less will get your rejected (NOT COUNTERED) 9 times out of 10.

    3.) Always submit your highest and best offer the first time. Do not expect to start low and counter to a higher offer. With an average of a dozen offers on a property at any given time, listing agents are now only countering the best offer in front of them and then rejecting the others.

    4.) Keep your offer clean. Pay your own closing closts, inspections, appraisals, etc. This will give the seller less items they have to counter. This will also show the seller and the listing agent that you and your buying agent are in tune with the market and it should make the process a smoother deal. When agents/buyers/sellers are not on the same page and in tune with the market it can cause problems once in escrow and the chances of closing the deal decreases drastically.

    5.) Write up the purchase contract to purchase the property “As-Is”. This means you can still get an inspection in your “Due Diligence Period” and find out the condition of the property. Do not expect the seller to pay for any of these repairs as you are buying the property “As-Is”. If the repairs are minor than we advise you proceed and make the repairs yourself once you close on the property. If there are unforeseen major repairs then you can renegotiate the purchase price at that time or cancel escrow and get your EMD (Earnest Money Deposit) fully refunded. Again writing up the offer “As-Is” will keep your offer clean and less things for the listing agent/seller to counter.

    6.) Submit your POF (Proof of Funds) or Pre-Approval Letter with your purchase contract so the sellers know you are capable of buying the property.

    7.) This step is not a must but it does make your offer a little more competitive. Increase your EMD (Earnest Money Deposit) to slightly above the requested amount in the listing. For example if they are asking for $1,500 EMD give them $2,000. This shows them that you are serious about buying this property and you are willing to put more money down than the other bidders.

    8.) Have your agent write an email or cover letter accompanying the offer explaining that you the buyer and them the buyer’s agent are aware of the market conditions and have attached a clean, strong offer that includes: and list the items above that you have agreed to only because of the condition of the market ex: higher price, paying your own fees, as-is, higher emd, POF or preapproval letter, etc.

    If you practice all of these steps when submitting your offers in the current market here in Las Vegas or Henderson you will have a better success rate of getting your offers Accepted.

    • Thanks Robert for taking the time to contribute your details to your offers in Vegas. All great ways and I agree it makes all the difference. You flipping or buying and holding for rental income because I may adjust my offers according to the exit strategy as well.

      • We have clients doing booth flipping and buy and hold however, flipping is becoming harder to do as bidding wars drive [rices up so high that it makes it difficult (not impossible though). Buying and holding is much easier strategy right now as you can win the bidding wars and still create positive cashflow.

    • Depends in who you are submitting to and there requirements.
      Typically if it is your own cash then a simple letter with statement of funds.
      If you have a cash lender then the same but letter should state you have been given
      A line of credit for the purchase of real estate.

  4. Robert, I agree with most of your comments, but sort of cringed at your #8 suggestion.

    8.) Have your agent write an email or cover letter accompanying the offer explaining that you the buyer and them the buyer’s agent are aware of the market conditions and have attached a clean, strong offer that includes: and list the items above that you have agreed to only because of the condition of the market ex: higher price, paying your own fees, as-is, higher emd, POF or preapproval letter, etc.

    I agree, doing that is probably going to increase your chances of acceptance, but don’t forget the buyer’s mail goal is to make a profitable investment. Getting an accepted offer means nothing if he pays more than is necessary. I have seen more than one buyer get burned because he was over-enthusiastic about a property’s prospects. Personally, if I ever think I should write a letter with an offer that explains why my offer is “best,” that’s a signal to step back a moment and reconsider everything. Maybe the smart thing to do is take a step back and focus on deals without as much competition.

    • The question should more likely be, do you want to buy right now or wait? If you want to buy right now you need to follow those steps. Otherwise, you will continually get out bid and waste your time as well as everyone elses. You need to make sure that by following those steps you investment strategy is still profitable. If you are not comfortable with those steps I recommend waiting until more inventory is released and the market softens.

      • If the offer you are presenting makes sense for the person based on their analysis then clearly the more of these things you have with your offer the stronger it will be.

        However I think the vital questions is to you want to buy “right” or do you want to buy “Right now”? Any fool can overpay for something for the sake of doing buying something, and sometimes it can still end up being a decent deal if the market works in their favor.
        However for someone that wants to have a long profitable investing career buying a property right is the key, even if it means it might be difficult to buy (in a particular market) right now.

      • Shaun of course you must make sure that your final purchase price still equals a profitable investment strategy. You never want to just buy something without first making sure the numbers in your offer work for your investment strategy

  5. ronald weinert on

    I just locked up a house yesterday with no money down all I have to do is sell it in the next 30 days I made a deal to give the owner 35 k and I will walk away with 10k when I find a buyer. It is my first deal. Mike is right about each deal being different. it depends on the people involved, This was a simple deal it on lt took me ten minutes to walk through the place and take pictures, then post the ads, Now I am looking for other deals to lock up just like that one, If I can do at least 3 deals a month and sell them all I wont have to go back to working a regular job again, and I will be making more than the average Joe does each week.

  6. Congratulations, Ronald. I don’t mean to rain on your parade, but I would caution you against such optimistic plans. Remember, it’s your first deal. Just because it happened once, and apparently “so simply, ” doesn’t mean you can to it with such regularity so that you can quit your job. You have a lot of “ifs” in your plan. If you can find a buyer for your deal within the right time frame, and at the right price. I have over 22 years experience at this and nothing has ever been easy or gone according to plan. But maybe I’m just not so skilled or not as lucky as you might be. I think it’s great to have plans, as long as you’re aware that successfully investing usually requires lots of skill and savvy, which you get by education and experience. Best of luck to you, though.

  7. Robert Levaro on

    Great tips. Does anyone find it helpful to make the EMD massive: say 50% of the offer price? That has been a device that has worked well for me on cash deals I have done on both REOs and Short Sales. Of course with short sales make sure the EMD is only payable to escrow upon receipt of the lender’ approval letter. In AZ that is actually built into the Short Sale Addendum.

  8. karen rittenhouse

    Great tips, Michael –

    Depends upon the deal, as you say, but when we find one that works for us, we offer full price, as is, with full cash price earnest money and proof of funds.

    In our market, we have never offered above asking price but are finding that coming into play here for the first time. Bummer….

    Thanks for your article.

    • Thanks Karen. Great strategy you have there with using 100% emd.
      Just curious did you get into a deal with your emd tied up a lot longer than
      You planned or ran into any dispute in getting your emd back because of any
      Unfavorable findings. I waive inspections a lot, do you do that along with 100% emd.
      Thanks as always for sharing.

  9. Another great article Mike.
    I do 2, 3, and 4 most of the time (some variance in the closing, but always pretty short). I should try to follow step 5 more but it is easy to not worry about the “human” side if it is an REO or short sale offer.
    Obviously point #1 is always a strong one, but you can only offer above list if you determine that is actually worth more than the list. 🙂

    Out of curiosity on that example you gave why would you have not offered the $120K when listed at $140K (Or something a tad less if that was your MAO) and kind of stale?
    I’d have been all over that!

    • Good question Shawn. Timing caused this. At the time the bank had it under agreement with an end retail buyer & it fell apart again. They ordered a new BPO & it came back at a suggested list price of $99,000 with if I am not mistaken a different broker. I know it makes no sense but you know as well as I know banks behave differently in terms that we just can’t make sense of many of the times. Relationship building with the broker I was give the heads up what was happening & was prepared to put my best and highest in knowing they most likely would accept a strong investor offer vs another retail buyer offer because they did not want to go down that rd again. It was a timing thing for sure otherwise I would’ve tried what you suggested.

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