Please Tell Me How to Save This Deal - Posted by Joe

Real Estate Investing
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Posted by Ryan_NH on August 08, 2004 at 13:35:57:

I’m a realtor myself and have been on both sides of the deal. If you don’t have a buyer agency contract with the agent than you’re free to do whatever with any agent… even if you do have a contract with your agent there is no law that says you cannot talk to another agent, but if your agent finds out, it might damage your relationship. If you’re worried about the agent, see if youe agent minds you calling to hear right from the horses mouth. You can write a letter with your next offer explaining your offer and how good of a person you are. You can submit as many offers as you want… the bottomline is that this house is worth $x in the shape that it’s in and the realtor and the seller know what $x. If your offer is lower than that number and the house has only been on for a few weeks, they’ll probably do more advertising and see what happens. It takes awhile for sellers to realize they need to drop the price. I wouldn’t try to read too much into the psychological aspect… it’s all about money… they want the most, you want to pay the least. Unless they have some motivation to move quickly you’re going to pay fair market value.

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Please Tell Me How to Save This Deal - Posted by Joe

Posted by Joe on August 07, 2004 at 21:18:31:

I just made a cash offer on a fixer. It was a low offer because the house needed quite a few repairs. Too low, I guess, because the seller didn’t come back with any sort of counter-offer. I am working with a good Realtor who’s on my side, but chances are the other listing Realtor might have harmed this deal.

Please tell me, after the seller didn’t come back with any sort of counter, am I dead in the water? What can I do now?

My Realtor is urging me to do another offer. I don’t feel I’d be harmed by offering a bit more, but don’t know how to do it from this point without looking ridiculous.

Please advise.

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Re: Please Tell Me How to Save This Deal - Posted by Tim

Posted by Tim on August 11, 2004 at 17:07:37:

If you made an offer based on the numbers that work for you why would you consider offering more? As a general rule no response to a lowball offer means the seller doesn’t consider your offer a serious one. When I make a low offer & get no response, or a counter close to their asking price I assume they are not motivated enough to sell at or near my price. Move on & look for the next deal, if the property is still listed in a few months you could make another offer. I tend to make my second offer for less than my first one, & I have bought properties this way.

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Re: Please Tell Me How to Save This Deal - Posted by rm

Posted by rm on August 10, 2004 at 09:32:15:

Sometimes the best way to save a deal is to kill it.

Walk away, and gently and kindly let them know that you’re interested in the property if things change.

Have your agent keep an eye on the MLS for you… if it remains unsold for a period of time, then send a fax to the listing agent to see if they’d be interested in working out a deal.

It’s best to buy from motivated sellers. Clearly, this seller is not sufficiently motivated for you. They may never be motivated… only time and circumstance can change this. And there’s no sense focusing on them while they’re not. While you’re pining for this deal, you’re missing several other, better ones. I know this from experience.

I’ve had a listing agent tell me, “If they were willing to sell it at that price, WE would have bought it.”

Hogwash. They called back 3 weeks later asking if we’d consider it at the price and terms offered.

Had I read this thread a year ago, I’d have offered a little less.

Listing agents spend a lot of time puffing out their chests to justify their existence. Many prefer making things more difficult than doing the easy deal…

You mention that you have no control over the listing agent, and you’re right- you don’t. And you never will. You need to accept that this is just part of the game. Just like a football field is 100 yards long, not 99. The sooner you learn to accept what is, the sooner you’ll find success. Realize that there is VERY little that is under your control. Really, all that’s under your control is you (right?), and it’s important to focus your energy on what makes you money.

Saving deals in the manner you seek does NOT make you money.

You mention that your last four deals have fallen apart, as if that’s somehow reason for trying to “save” this deal.

Better to have lost five deals than to have lost a penny on a deal because you felt the need to save it.

Keep writing offers, work on generating seller prospects, and you’ll get a good one.

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If you really want to psych 'em out… - Posted by Anne_ND

Posted by Anne_ND on August 09, 2004 at 08:41:39:

…make your next offer and all subsequent offers lower. Let them understand that they get one chance to say yes.

I would not go back and offer a higher price, because you might get it. And if this is your first rehab, then you underestimated your repair costs by a lot. Ask me how I know.

good luck,

Anne

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Change your tactics… - Posted by David Alexander

Posted by David Alexander on August 08, 2004 at 16:47:30:

When you’re only working on a deal or two…

All of them are swans…

Get good at making a lot more offers… or marketing for sellers to call you by the hundreds… and you’ll be alot better…

You gotta become a don’t wanter…

and you’ll buy more houses…

David Alexander

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Re: Please Tell Me How to Save This Deal - Posted by Tom-FL

Posted by Tom-FL on August 07, 2004 at 23:57:25:

You said:
– I am working with a good Realtor who’s on my side –

Have you signed a buyer’s agency agreement with this Realtor? If not, they are not on your side. They are legally obligated to work in the seller’s best interests. They are acting as a sub-agent of the listing agent. If you say you’d go as high as 75k but put in an offer of 50k, they are obligated to share this information with the seller. Likewise if the seller said they’d take 50k but list it at 75k, the agent is legally required to NOT share this information with you.

They are not YOUR agent unless they are under contract with you.

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Re: Please Tell Me How to Save This Deal - Posted by del-ohio

Posted by del-ohio on August 07, 2004 at 23:05:05:

Dont be shy about making another higher offer. It is the way the game is played and people who buy a lot of real estate, especially rehab properties, do this all the time.

We buy on average two rehabbers a month, hardly ever do we get our first offer accepted.

If your realtor is urging you to do another offer, it sounds like you have a Realtor who doesnt feel bad about offering low and going higher. This sounds like a Realtor you can work with and is trying to help you get a deal.

Most of our deals are dopne through Realtors, while we dont rely on them to find us the deals, If you develop relationships with a few good Realtors who understand what you do, you will get some very good deals.

To answer your question directly, are you dead in the water? NO we have bought a lot of houses where our first offer didnt get a counter.

One thing that we do is keep writing offers, every three weeks until we get the property or it sells to someone else. We always start below our maximum allowable offer, if we dont get a counter we write another one close to our max offer, if there is still no counter we wait three weeks and submit the same one again.

Wish you the best,

Del-Ohio

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Re: Please Tell Me How to Save This Deal - Posted by Joe 2

Posted by Joe 2 on August 07, 2004 at 21:34:59:

Well, it’s easy. You have 3 choices.

  1. Have your realtor ask his realtor exactly why you haven’t heard back.

2)Find out who he is and call him directly. This isn’t against any laws. I hate realtors who make you think you can only do a deal THROUGH them. BS. Of course, now that they are involved, you have to pay them a commission out of the sale. But you still have the same rights as an actual citizen. call him directly and ask him what will work, and make a deal directly. Actually, you can demand a meeting with the seller through your realtors. If his realtor refuses, threaten a law suit. I hate realtors who think it’s THEIR deal, or THEIR house. 99% of the time they need to get the F out of the way.

  1. Wait until he realizes his house isn’t the Taj, because no one will pay his price. Then, submit an offer a little lower than your first one. Meanwhile, go to the NEXT deal!

PS, get rid of your realtor! Do it without paying commissions, which these money sucking parasites think they are somehow owed, for doing what? For making a few phone calls ans speaking to a few people? Do it yourself, or you aren’t meant for this biz.

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Re: If you really want to psych 'em out… - Posted by Gavin Wilkinson

Posted by Gavin Wilkinson on August 10, 2004 at 20:25:01:

Has this method - to offer less on the second offer - actually worked for you? My belief is that this turns off the seller so badly they won’t deal with you in any way again.

But perhaps if they are a strongly motivated seller who says “I don’t care - sell it” it might work. But if they are a motivated seller, why were they contering in the first place?

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Price paid by them for not taking first deal - Posted by DaveD (WI)

Posted by DaveD (WI) on August 10, 2004 at 08:26:59:

You’re right Anne. It’s a lot of work to go back and make another offer. Might as well get paid for it, don’tcha think? It has worked for me.

The Donald wrote the book on offering less the second time (and third…) Very strong bargaining position. Punishes the seller for not taking your first offer. Takes a lot of guts to do it. Brutally effective.

Most will wimp out and offer more instead. Bad idea. Why? It shows you want to buy more than they want to sell. Go find people who want to sell more than you want to buy. It’s that simple. Unless realtors are involved. You see, they still are gagging on your first offer. You probably have a better idea of the properties true value. An agents mindset frequently is if offer is more than 10% off their inflated price, it is a bad offer. Go figure.

-Dave

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Re: Change your tactics… - Posted by Eric C

Posted by Eric C on August 08, 2004 at 21:30:29:

Hi Joe -

While I am not a fan of shotgunning offers all over the place, there is more than a little truth to what David says.

I would say to not only change your tactics (he’s right about that), but I would also change your attitude.

So what if the last four deals don’t close?

So what?

You either have the determination to become an investor or you don’t. Few people are sucessful their first time out, or their second, or their … well, you get the idea.

Learn more about this business. Learn how to deal with other people. Learn more about yourself.

It will happen.

Don’t rush it. After all, the fun in is the trip; not in reaching the destination.

Take care,

Eric C

PS - and that part about becoming a “don’t wanter”? You might want to practice that a bit.

Believe me, after you’ve owned a few dozen (hundred?)rentals complete with toilets that constantly overflow, tenants who can’t remember when their payment is due but who have memorized your phone number to call about the slighest problem (the middle of the night seems to be a popular time), and the seemingly endless supply of bureaucrats determined to suck the joy right out of your life,… you won’t want to see another property, much less own one. Have I mentioned air conditioners that don’t cool, or water heaters that leak?

Never mind. I got carried away.

So, the next time someone calls you – try to remember that you didn’t major in midnight plumbing and that your real goal here is to make a profit for yourself – that’s right, for you – and not simply to buy a house. Any moron can do that. Yes, tenants or end-buyers help make that happen – the profit part, I mean – but only if you take the time to choose both the properties and the parties well.

Think about it and repeat after me: I don’t want another house. I don’t want another house. I don’t want another house… unless I make my profit when I buy and my exit strategy is crystal clear.

Got it?

PPS - In the meantime, you won’t mind if I keep buying property? After all, I’ve been doing it for almost thirty years and I think I’m beginning to get the hang of it. Be a shame to start over in another field now, don’t you think?

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Re: Change your tactics… - Posted by Joe

Posted by Joe on August 08, 2004 at 17:18:21:

…“marketing for sellers to call you by the hundreds…”

I have had my first four solid deals in a row fall through. If I can’t do one deal, this will never happen.

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Re: Please Tell Me How to Save This Deal - Posted by Joe

Posted by Joe on August 07, 2004 at 23:15:08:

Del,
I want to thank you tremendously for this excellent advice. Your informing me how you play this game is valuable information, as I’ve been sitting here thinking that I had blown my deal. Now, I’ll try again tomorrow resubmitting another offer!

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Re: Please Tell Me How to Save This Deal - Posted by joe

Posted by joe on August 07, 2004 at 23:05:28:

We did hear back and the seller simply rejected the offer as it stands.

I don’t want to get rid of my Realtor, as I consider her a valuable member of my team, such as my CPA, RE attorney, ect.

I am planning to get most of my leads, however, through signs, ads, postcards and other methods, where a Realtor will not be involved. MLS leads are just one method, and I don’t feel a need to cut off my nose just to spite my face.

I feel that the culprit in this case could possibly be the listing agent, over whom I have no control. Anyway, that’s neither here nor there, and not worth arguing about.

The bottom line - I still need some suggestions from some others, regarding how I can submit a reoffer, in order to still make this deal fly. Please respond.

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Re: Price paid by them for not taking first deal - Posted by EricNC

Posted by EricNC on August 10, 2004 at 12:21:21:

MUHAHAHAHA!!! Thanks for giving me another tool for my toolbelt. =]
e

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Discipline // The End - Posted by Hank FL

Posted by Hank FL on August 09, 2004 at 23:50:26:

“Don’t rush it. After all, the fun in is the trip; not in reaching the destination.” -Some REI Dude

“Discipline is never an end in itself, only a means to an end.” -King Crimson

Ahhh… but the end just might be in the trip itself, no? I guess that puts the end in the middle then?

Anyway, what more BS can I pump into this post?

How about a little Jim:

This is the end
Beautiful friend
This is the end
My only friend, the end

Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
I’ll never look into your eyes…again

Can you picture what will be
So limitless and free
Desperately in need…of some…stranger’s hand
In a…desperate land

Lost in a Roman…wilderness of pain
And all the children are insane
All the children are insane
Waiting for the summer rain, yeah

There’s danger on the edge of town
Ride the King’s highway, baby
Weird scenes inside the gold mine
Ride the highway west, baby

Ride the snake, ride the snake
To the lake, the ancient lake, baby
The snake is long, seven miles
Ride the snake…he’s old, and his skin is cold

The west is the best
The west is the best
Get here, and we’ll do the rest

The blue bus is callin’ us
The blue bus is callin’ us
Driver, where you taken’ us

The killer awoke before dawn, he put his boots on
He took a face from the ancient gallery
And he walked on down the hall
He went into the room where his sister lived, and…then he
Paid a visit to his brother, and then he
He walked on down the hall, and
And he came to a door…and he looked inside…
Father… yes son… . . . I want to kill you
Mother…I want to…f you

C’mon baby, take a chance with us
C’mon baby, take a chance with us
C’mon baby, take a chance with us
And meet me at the back of the blue bus
Doin’ a blue rock
On a blue bus
Doin’ a blue rock
C’mon, yeah

Kill, kill, kill, kill, kill, kill

This is the end
Beautiful friend
This is the end
My only friend, the end

It hurts to set you free
But you’ll never follow me
The end of laughter and soft lies
The end of nights we tried to die

This is the end

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Re: Change your tactics… - Posted by Alfredo E.

Posted by Alfredo E. on August 09, 2004 at 16:10:35:

You are really good, Eric

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Re: Change your tactics… Joe - Posted by Eric C

Posted by Eric C on August 09, 2004 at 09:20:47:

Hi Joe -

Sorry, my post was directed at you rather than David. Too many pain meds late at night makes Eric a dull boy and a rather poor aim.

Good luck.

Eric C

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Re: Change your tactics… - Posted by David Alexander

Posted by David Alexander on August 09, 2004 at 01:47:02:

It will, your just trying to make deals with unmotivated sellers…

Once you’ve found one…

The rest is easy…

David Alexander