The little house that got away.....Do not give Brokers too much time to shop your offer!

Thanks Joe, Thats good advice.

DC,

Thanks for the positive reply. Good luck on your future deals! Believe and Achieve! Indiana-Joe

It seems to me that this strategy is bing used by many banks. When properties have been on the market for an extended amount of time, the bank will reduce the list price considerably, and try to get multiple offers. Then they approach the buyers and ask for "Last and Best Offer". The Agent is presenting the offers as they come in. The bank is holding them until they have enough to approach the buyers for a better offer. In my research, I find that these properties sell for more than the list price in most cases.

Al

Thanks for the reply and your insight to this REO offer strategy and deal. I did not think of that and it does make good sense to me. I know so many banks are getting hundreds of new REOs each day and they are probably running a little behind and want to maximize their profit (or minimize their loss). Good luck on all your future real estate deals. Believe and Achieve! Indiana-Joe

LOL! Now you are negotiating like a person who has the upper hand - I like it! If you have other listings in your crosshairs by this bank/broker they have been put on notice you are NOT going to play games... good stuff.

Joe, I have a question. Are you paying cash for the home or going conventional loan? I am just wondering because the bank ( i assume ) will take you more serious with cash offer then someone going conventional.

Thanks for the positive reply and comments. It honestly made me feel a little better when I did submit "my best and final (lower) offer". I did get another email today from the broker stating that they have multiple offers on this home and are considering the offers. It sure would be ironic if I did end up with this home, but even if I do not get the home, I learned a little from the transaction. Believe and Achieve! Indiana-Joe

Thanks for the inquiry. I did offer an all cash, as-is, quick close for this home. It is a small aluminum sided ranch REO Home with 2 bedrooms, no basement, and a 2 car detached garage. I will update everyone to how this transaction plays out. Good luck on all your current and future real estate deals. Believe and Achieve! Indiana - Joe

Indiana-Joe, all is not lost. As you mentioned, you are awaiting the decision. Who knows, your may be the proud owner of that little house that you thought had gotten away. Good Luck and God Bless.

Sandra

Thanks for the reply and positive input. I did hear back from the broker late yesterday afternoon and they inquired if this was my best and final offer (of $2k less than my original offer). I stated yes and agreed to extend the offer for another 24 hours. I could not tell if they were just fishing for another better offer. I want to find good deals, however I do not spend too much time on one small deal and miss out on a better deal because of the time and distraction.

I would like to get his home, but I have a few other offers out there on different properties and I want to ensure that I keep my focus and timing of deals on track. Good luck on all your deals. Believe and Achieve! Indiana-Joe

Hi, I had about three different brokers and deals that the brokers were stalling me. Not returning calls etc. I know they were stalling.because some I had to insist that they present the offer. I, also, had a friend that is a semi retired real estate sales person call a couple of listing brokers. One as much said that they had some investors looking for properties so why should they share a commission. However, I did manage on my own to purchase something direct from a builder that took the property in trade from someone in their community who wanted a larger place. I got a great price, and I will probably will rent it for a little while and then sell. DeAnna

P.S. Has anyone had sucess dealing directly with banks? In my area, the banks already have certain real estate agencies that handle reos.

Thanks for the input. Congratulations on purchasing trhe property you mentioned directly from the builder. That sounds like a good route to go. Thanks for shares your other thoughts on the broker lisitngs.

In regards to banks, I found that the local community smaller banks are the best to deal with. Try to get to know some of the local bank staff and it can go a long way. Good luck on all your deals. Believe and Achieve! Indiana-Joe

I was hoping to get an update on my best and final offer, however I should find out this week. I drove by the home and it appears, the lawn should be mowed and the home is just sitting their waiting for its next owner. We will see how this one plays out. Believe and Achieve! Indiana-Joe

The broker that had this listing contacted me this evening and stated that the large national bank still has yet to confirm acceptance or counter the offer. I now better understand why this home may not have sold. I will update everyone as the drama continues....Good luck on all your deals. Believe and Achieve! Indiana-Joe

Hello DG Members,

Well the drama is finally over. My broker contacted me and stated that the bank rejected my offer from about 4 weeks ago. I could not believe it took this long to get a response on an REO offer. The broker stated that this large national bank has thousands and thousand of REOs so it took a little longer than expected to get a response. I guess I should not be upset about a 3 day response time on future offers Well, my quest and search for the next good "gem of a deal" continues! Believe and Achieve! - Joe

Hey Joe you know! For every no there is a yes just waiting to happen! Keep your head up.There is many success stories awaiting us. Always..........Lubertha

Thanks for the positive comments and thoughts, I appreciate it. I hope to find the next deal soon. Best wishes. Believe and Achieve! - Joe

All this makes for interesting reading Indiana Joe and others: I faxed an offer to another investor on a property, knowing I was willing to offer more on a good deal. . . (He wanted $40k with $5k down and two year balloon 5 1/2 %. I offered $38K with $3K down and 30 months)I failed to ask for a window of time to have him respond and stewed and worried about it. not wanting to seem needy. I read somewhere that it is important as an investor to be a "don't wanter" sort of a take it or leave mentality;
Anywho, on 6th day.. I received his counter fax.which was workable for me and we close on Monday. This is a sweet deal in that, this investor has a prominent attorney in his family that conducts the paperwork and closing at no cost to me. My specific stategy, like on my last deal, is to sell it on a contract for deed to a buyer from my list, who can't get conventional financing; I plan to ask for $3-5K down and have it cash flow about $100 pos.

Thanks for sharing this great story on your recent deal. It is so true that patience in real estate investing can pay off. Sometimes the most powerful thing you can say to a seller is....."nothing at all". Silence sometimes will inspire the seller to call you back and then you know you are still in the game.

This can allow you sometimes be in an even better buyer's position because you know you are close to completing the deal. Thanks again for sharing your insight and the details of your recent transaction. I really enjoy hearing about other deals and it give us all inspiration to keep doing what were doing and good things should follow. We wish you continued success with your REI. Believe and Achieve! - Joe

Grady, you said you will have it caxh flow about $100 pos. what is this?

The positive cash flow that Grady referenced means that once your deduct all the expenses from the monthly rent that there is $100 left over. This is positive cash flow.

An example may be you rent a home for $800 per month and after you pay the mortgage, interest, property taxes, insurance, management fee, etc for $700 you are left with $100 ($800 monthly rental income - $700 monthly expenses = $100 positive cash flow). Good luck with real estate investing. Believe and Achieve! - Joe

This is great advice for a rookie investor like myself who is still waiting on finding my deal to get started. Thanks again Joe. Now all I need to do is find out on how to interview a RE broker and a RE agent on working with me.

Thanks for the comments. In regards to finding a RE broker and RE agent, take a look at Dean's "Profit from Real Estate Right Now" book on Page 113 and it lists several questions to ask the prospective realtor. The book also has some great advice by Matt Larson which is found on pages 114-116. To get comfortable talking to agents, just call or email a few at random until you get your questions down and you reach your comfort level. You can also visit a few open houses and talk to agents in person. Normally the newer agents usually will work an open house, but if gives you a chance to gather information on an area and practice talkign to people. Practice makes perfect!

Once you submit a few offers you will then see if the agent's will do what they say they will do. A key to remember here is "actions speak louder than words". Good luck in finding an agent. A good agent can make all the difference. Believe and Achieve! - Joe

Thanks Joe, you know I totally forgot about that part of the book and my mind is clustered with all my how to's and what if's. So again I thank you for the guidance and everything. Thank you