One of the first things to consider is that no one likes to carry a low offer to a property owner. In todays market it will become more normal. The real estate blogs are filled with advice on how you should proceed. Sales data, even historical data will be of little use.
What people forget is that in real estate there have always been formula buyers. Some buyers will buy anything that fits the formula they have. Number one is the ability to pay off a property quickly. If you have a business plan in commercial real estate you follow that. Residential purchases can work the same way.
A young couple that I worked with ten years ago made an offer on a house that was as much as they could afford. They were tired of looking at properties, and just took the chance. It turned out the seller was making an aggressive price reduction if the property didn’t sell over that week end, they had to be in Boston in a month.
You never know what the circumstances are for the seller of a property. Low offers will become normal this year. What you should do is have a plan, to go along with the offer. You’re also going to need an agent who can present the offer well. You need some one to go to bat for you.
An investor who made an offer on one of our properties was making twenty offers a week. His agent was simply faxing in the offer with no follow up. I, as a comparison want to present my own low ball offers, at least to the agent, or the agents broker.
In my opinion no one should be offended by getting an offer from a qualified buyer. Getting a pre approval for over the loan limit on a specific property helps a lot in having the offer considered. Your ability to close a loan will be a huge factor this year. All your negotiations should be up front, get an inspection done as soon as possible, and be willing to walk away.
Never nickel and dime a deal once you have it. Just assume that the house need at least $5K worth of work. You’re going to want it your way, anyway, so just figure you’ll be doing repairs. Become a serious buyer who is there to close the deal.
Real Estate is an investment. Think like a professional.
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