How to Bid on Investment and Traditional Real Estate Homes and Houses
If your like most new home buyer you probably get a little nervous when it comes to making an offer to sellers when you are about to purchase a home, or real estate property. You’re probably thinking you want the best deal possible without feeling as if we are offending the seller - You have to realize two things.
Buying and selling real estate is a business (a BIG business) - You ARE NOT in the business of making friends with the seller… Just being a businessperson and realize that I low offer isn’t going to hurt someone’s feeling.
Everything in real estate is negotiable - Don’t worry if you go to low on a bid, the seller will often counter offer no matter how low the bid is.
Don't be afraid of making an extremely low offer to a seller. You don't know what they are thinking or what their situation is. For all you know the seller will except half the asking price due to “rock and a hard place” situations. In fact your lowball bid maybe the only bid in 2 years and the seller will gladly take the loss to stop the monthly hemorrhaging of cash from it.
***EDITOR NOTES:
I purchased a BEAUTIFUL 4 bedroom, 3 bath, Belgium block home for half the asking price and for a third of what it was appraised for due to the seller’s tough luck situation: Appraised $140,000 - Asking $110,000 - Purchased for $56,000 - My initial asking price $30,000***
One thing I can not stress enough is find a good real estate agent that doesn’t mind throwing out these low ball offers. Many agents feel they are wasting their time and you don’t have the money to buy. Although once the agents sees your tactics they are much more willing to work with you knowing you will bring in more business over time as well as referrals.
Also remember, the seller never even has to see you... In most cases, the agent handles all communications and only if these get more serious will you ever deal with the seller.
The seller can do several things after receiving your offer.
They could accept your offer, which would be the ideal outcome. This means that they don’t even haggle and just give it to you for the price you wanted. (If this happened you should have went much lower)
They could totally reject your offer and not even respond... This does occasionally happen but with the millions of houses out there its not even worth wasting the time thinking about it. Remember bid on many houses and don’t get attached to any one - the biggest mistake you can make if you want to see a profit is to get attached to one property.
Your offer could be counter-offered. He will reject your offer, but give you an offer on the table. If you receive a counter-offer, you can then accept, reject or counter-offer.
The key in buying is that you have to set your top-of-the-line price before you make offers. Decide how much you want to pay for the property and stick with it.
Here's a key though. By reducing the price, the seller is telling you that things are negotiable. You may want to counter again.
Here is something to remember. There are tons of houses out there. Yes, you may have to shop around, but it can be worth it in the long run. You want to buy a home at the price you can afford. Not more than you can afford. Although you maybe able to rationalize it ( i.e. I won’t eat out as much, I’ll wait longer for that new car, the kids really don’t NEED a college fund, etc) It’s good to set a stop point BEFORE you start the search.
This article is a free search from YAERD, it’s designed to help beginners and experts figure out how much to bid when buying investment and traditional real estate whether it be a house / home - This article will help you figure at what point you should start bidding.
