Real Estate Offers That Are Offensive

This is an exhilarating topic in a declining real estate market. This is where home equity gain and great real estate value can be realized. However, you need to know what an offensive purchase offer is.

Unrealistic/Offensive Purchase Offer Defined

This is any offer that is submitted to a seller with out doing any research at all. I know this may sound like common sense; but poor research and or lack of research seem to be a constant in this business. Before you put in any offer and have dreams of picking up a property well below market value you must get your facts in order. This will increase your odds of having an offer accepted.

Is the truth really so offensive?

In a manner of speaking… YES.

A well researched offer is only offensive to sellers when they are caught unaware of the marketability of their property. The truth hurts. However, motivated sellers will succumb to well researched offers once they have valid information to go on. If they do not, then you know they are not really motivated to sell their property or their listing agent has shielded them from the truth. There is nothing you can do in that case.

What do you need to know first and the questions to ask?

First,
What is your Occupancy plan?
This is the most important question and I suggest you put it on paper. For instance, is this a starter home soon to become a rental? Is this the last home you intend to buy or is this a flip? Have a real estate plan first and foremost.

The Questions to Ask,
The How much does the seller owe on the property?
Your offer may be in unattainable if the seller owes more on the home than your purchase offer.

What did the last model match sell for?
(You should be only interested in the sold and recorded properties. This is a critical piece of information that must be researched properly)

Does the property require repair and if so how much?
This should seriously affect your offer. No property is alike. Model matches are still different. Use this to your advantage.

Is the home upgraded and are the upgrades commensurate with the sales price?
Does the $700,000 home have granite countertops in the kitchen or multiple upgrades. It should. This should affect your thinking.

Is the Seller really motivated to sell?
This is tough to answer but you find out really quick once you deliver your offer.

Secondary information that may be useful motivation indicators:
How many days has the property been on the market?

Has a Notice of Default been filed or is this property bank owned?
This may present issues for buyers looking to buy the property with traditional financing. There are investor’s ready to make all-cash-offers and swoop up properties instantly if the return on investment pencils out on paper. An all-cash-offer is the utmost competitive edge. (In a following article I will discuss the reality of the NOD and foreclosure market. This may be of interest to those who have dreams of buying a bank owned home/foreclosure)

Is the property vacant?
Vacant properties sometimes spell out possible desperation on behalf of sellers. There may be a possibility the seller is carrying two mortgages at the same time they cannot afford.

Finding the answers to many of these questions is the key to successful home buying in any market. What you do next with this information is the key. By researching and writing valid offers, you may turn an unmotivated seller into a motivated one. But above all, be patient. There is a lot of inventory to choose from. Make smart, educated decisions and good things will happen.

end.