The One That Got Away: The Top 8 Reasons I Lose Out on Real Estate Deals

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Having been in the real estate business for a while now, there are many deals out there that I just did not get. As I drive around, I come across some of those deals from time to time, and almost every time I feel a sense of regret and mentally kick myself. I’ll say to myself, “That should be one of my properties.” Or, “I should have bought that one.” Honestly, seeing those properties makes me a bit angry with myself, but being angry serves no purpose. So I try to let those properties serve as little reminders to myself for what I did to lose those deals and what to do next time a potential deal comes along.

So why did I not get those deals? There are I think several reasons.

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The Top 8 Reasons I Lose Out on Real Estate Deals

My Offer Was Too Low

This is of course the obvious answer. Why was my offer too low? It was not for me. But perhaps the seller had unreasonable expectations. Or other buyers could have outbid me, either due to ignorance or the ability to make the deal work on a smaller margin. In the future, I need to see where I can cut costs and streamline processes to make my business more efficient and cost effective to perhaps make more appealing offers.

I Did Not Listen to the Seller

And because I did not listen, my offer likely did not give the seller what they wanted. Every seller wants money, but there are other things a seller might want or need. They could need time to get their affairs in order. They could need a way to move their stuff. They might want a new vehicle or boat, or even a trip to Paris. Listen to your seller, find out what they need and solve their problem. If a trip to Paris makes the deal work, then book it!

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I Did Not Educate the Seller on the Value of Their Property

Sellers often have unreasonable expectations of the value of their property. They may not understand the current market. They may have been lied to by an unscrupulous real estate agent so they could get a listing. They may remember the property when it was nice and new and not be aware of its current condition. A little education here can go a long way. I am not afraid to show a seller my numbers, comps and pictures to help them understand where I am coming from. Sometimes it helps; sometimes it does not. Sometimes I will get the deal after some time has passed and the seller has let reality sink in.

Related: “Dear Seller” Letters: The Tool You Need to Win Deals in a Hot Market

I Was Focused on Other Things

This could mean that I was focused on other properties, on a current project, or perhaps on even going to a Tigers basketball game. Whatever the reason, I have learned when a potential deal comes along, you need to refocus yourself and look at the potential deal.

I Was Penny-Wise and Pound-Foolish

I was painting when I should have hired painters. I was fixing a sink when I should have hired a plumber. I thought I was saving money, but in reality I was so busy, I did not have time to focus on the deals. So was I saving money? I was saving pennies for sure, but losing pounds on missed deals.

I Did Not Follow Up

Potential deals can come onto your radar screen with relative frequency. The trick is to keep them there. Sometimes a seller is just testing the waters. They want to sell, but they do not want to make a mistake either. So they make a few calls and respond to a couple of letters. It can be hard to tell how motivated a seller is sometimes, so you have to follow up. A simple letter or phone call may just be the extra push you need to get the deal.

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Related: The #1 Tip For Recognizing Great Real Estate Deals

I Did Not Have The Money/Resources Lined Up

Deals seem to come in bunches. When they do, you can very easily find your money sources dried up or your contractors too busy. When you get in that position, you may find yourself having to say no. Think about what you would have needed to do to say yes.

I Was Scared

This was true when I was new to the business. I was scared to say yes too many times. I was scared to say yes even once. There are a lot of zeros attached to real estate prices, and fear is normal when starting out. Hindsight is however 20/20, and I do kick myself for being scared. So don’t wait to buy real estate, as a friend of mine says. Buy real estate and wait.

Who Knows?

Who knows what the reason is. Perhaps I did not build the right rapport with the seller. Perhaps they liked the other buyer better because he could talk UT football better than I could. Perhaps my timing was off. Who knows? The point is there could be a myriad of reasons, and you may never know what the real reason is.

Whatever the reason, however, do not get discouraged. There is always another deal out there. Let the one that got away serve as a reminder to keep making your business and yourself better.

What are the most common reasons YOU lose out on deals? 

Leave a comment, and let us know!

About Author

Kevin Perk

Kevin Perk is co-founder of Kevron Properties, LLC with his wife Terron and has been involved in real estate investing for 10 years. Kevin invests in and manages rental properties in Memphis, TN and is a past president and vice-president of the local REIA group, the Memphis Investors Group.

15 Comments

  1. karen rittenhouse

    Not contacting the seller back in the first place is a BIG mistake so many investors make. Don’t know why – they spend the money for the phone to ring!

    So many, many times when we go out to view a property the sellers tell us that we were the only ones to return their call!

    It takes so very little to get ahead in this business.

    Thanks for the post.

    • Kevin Perk

      Karen,

      I agree. I think it is partly due to fear. It can be really hard to get over that. The other end of that phone line is a huge unknown.

      I will say that it gets easier and easier as you do it more and more. The key is to take those first few steps and get some experience.

      Thanks for reading and commenting,

      Kevin

    • Kevin Perk

      Shaquetta,

      We all went through it. Remember fear is somewhat of a good thing. Is stops us from doing dumb things. Listen to your fear and run your numbers again. But also listen to the numbers and use them to overcome your fear. If the numbers say go, then go!

      With practice and experience the fear will ease. It will no longer be unknown to you. Fear of the unknown is perhaps the biggest fear there is, and the only way to remove fear of the unknown is to make it known. So if the numbers say go, then go!

      Good luck and thanks for reading and sharing,

      Kevin

    • Kevin Perk

      Timothy,

      Thanks for reading and for the kind words.

      See my response to Shaquetta above and also understand that money flows to good deals. So learn about what a good deal is, find one and the money will come.

      Good luck,

      Kevin

  2. Athol Dickson

    Very good post, Kevin. I’ve been sourcing REO deals via the MLS but that’s getting harder to do in my market so I’m shifting over to off market deals. Your comments here are a great reminder that I need to take a completely difference approach. REO sellers (banks) are all about the numbers. Off market sellers very often have a lot of emotion tied up in the deal. That fact can work for me or against me, depending on whether I keep your points in mind. Thanks!

    • Kevin Perk

      Athol,

      You make an excellent point. Banks are of course all about the numbers. But an “off the market seller” may be dealing with the house they grew up in or a whole host of other emotional attachments. We as investors must be sensitive to that and listen to and be respectful of the seller.

      Thanks for reading and commenting,

      Kevin

  3. Bea Bugan

    Hi, great article! Thank You. I am a newbie and I lost my first deal some days ago. I literally cried two days. I saw that property today and i felt devastated. I was the first person who ever visited that property and I made my proposition. I could pay cash the price they were asking for, it was already a good deal (roi 12%) but i wanted to play and try to make the price the lowest possible. I told the agent I am opened to discuss the price and looking forward the contra-proposition of the seller. The real estate agent transferred my proposition and she did not communicate with me the whole week. I thought it is taking longer for the owners to decide. I wrote mails to her, called her but no answer. Next week she wrote me, that another people proposed a little more money so i am out of game. ,,Sorry baby” WHAT? But those people came after me and they did not filled out any documents! They did not gave me my chance to finish my negotiation. I don’t know if this is common or if it is ok to do it this way from the side of the agent. I proposed more than the person and the agent refused me. She refused to transfer my proposition to the owner(seller). I am disappointed. Can somebody explain me how theF is this working? I am sad but continuing to search my next deal. I am a foreigner in France so that might be the problem, they preferred a french customer, even if he came later and proposed less money. At least, I have a good story if nothing else. Good luck to everybody and a lot of success! (*sorry for my english)

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