As a buyer, your goal is to get the a property at the bets price and terms possible. If you can get it under market value your are getting a "a deal" and will be real happy.
In a decling economy the first sign of the times is "the low ball offer". By using this term, a low ball offer is when a buyer makes an offer way lower than current market value.
FINDING THE RIGHT PROPERTY
Before you can even make an offer, you need to find a property to make an offer on. The first thing you need to do is choose which properties to see then which properties to make an offer on. There are other buyers doing the same thing as you, if you have ever got out bid or lost a property by waiting, you know time means money.
DOING YOUR HOMEWORK
By doing some homework you can narrow down which properties to even make an offer on. If you plan on making a low offer, you need to know what properties may consider it and which properties can not be sold that low.
1. Ask the listing agent if any offer prices have been rejected
2. Check the tax card
3. Review the registry of deeds for what the seller owes
If the seller owes more than the offer you want to make, then chances are it will not be accepted. I will get into short sales later....
MAKING THE OFFER
All offers need to be in writing, do not make oral offers or offers by email, they are not binding. your offer needs to be on a standard purchase agreement, be accompnaied by a deposit check and include a preapproval letter or proof of funds letter if buying cash.
Your offer should be set to close within 30 days of acceptance and do not put in any additional contingincies. most often selelrs may accept lower offers for quick closings and no contongincies, that way they know the sale is guaranteed when they sign it
SELLERS REACTION.
There are different types of sellers. First if it is your average owner occupied property, You shoould know that receiving a lowball offer is often the most emotional thing that can happen to a seller. They usually feel insulted and some may refuse a counter offer. In this case if you really like the home, you will want to make another offer to them that is higher.
BANK OWNED HOMES
If you are making an offer on a bank owned home, you need to ask 3 questions:
1. Is there any other offer that have been submitted
2. Has the seller refused any other price and what was it
3. How long does teh seller take to respond to an offer
If there are no offers you can make a low offer and try to steal it. If there are other offers you may want to make your best offer as you may not get a second chance.
Banks usually will not counter offer price, just terms.
make sure you include a preapproval letter or proof of funds letter, avoid any contingincies, try and avoid a home inspection contingincy, have someone walk through the house when you are viewing it, check everything you can see with your naked eye. Some banks will allow home inspections but the home is sold as is, so they wont disclunt the price or make repairs.
FOR MORE TIPS ON BUYING A FORCLOSURE: check out my blog
http://www.trulia.com/blog/scott_godzyk/2008/08/so_you_want_to_buy_a_for
BUYING A SHORT SALE
When purchasing a short sale you need 2 things, time and patience. Most short sales take 3 to 6 months for an answer. So if you dont have the time, a short sale is not for you.
When purchasing a short sale you want to ask if any other offers were accepted, has the bank accepted any price but the buyer backed out, if so chances are they will take that price again and probabily not much lower. Ask if the house is in foreclosure.
When making an offer again use the same tips when making an offer on a bank owned home.
FOR MORE TIPS ON BUYING A SHORTSALE: check out my blog
http://www.trulia.com/blog/scott_godzyk/2010/06/how_to_get_a_short_sale_approved
IN CONCLUSION
By using a buyer broker experienced in short sales or reo homes you can get the assistance you need in getting the best possible deal out there. Agents have access to houses coming on the market and the inside information they can share with you on any deals they hear or see.
keep your offers simple and free of contingincies. One tip in making your offer is tyo include teh reason you are making that offer. Include a list of repairs, pictures of teh damage and copies of estimates on contractors letterhead on how much it is to fix them.
Avoid writing a letter tearing the house apart and saying how bad it is, if it was really that bad, you would not be buying it and it wont fool many expereinced asset managers or sellers.
Good luck with your purchase....
BUYERS AND AGENTS, PLEASE LEAVE YOUR COMMENTS, SUGGESTIONS OR ADVICE FROM YOUR POINT OF VIEW.
Comments(2)