Hey..I just made a total low ball offer on a house cause it's what I want & it's been on the market 101 days so I figured why not try & I could tell the agent didn't want to make the offer but I said I want to anyway so she sent me the contract to sign so hey I figure other people on this site do it so heck I will try!
You know what, the same thing has happened to me...
I personally think the agents say that cause the commission is based off of sales price.
If the commissions too low, they wont even submit the offer.
My 2 cents opinion... if anyone knows anything please post
I DO KNOW... as per contract, they are "SUPPOSED" to submit every offer. I just don't think they morally uphold it.
Knowledge is Power
- Pimpedoutgeese
I am 99.99% sure that this is true but if the law has changed I hope someone will jump in and set the record straight.
I really believe that you can say to an agent that you would like to be present (live and in person) when your offer is made to the seller. (Let's see if someone can confirm this first though) but I think that the agent, legally, cannot refuse this request!
I believe you can request a written confirmation of the sellers answer, which will tell you if they submitted your offer or not.
Maybe AL can chime in.
I think that the really low ball offers work best with FSBO properties (trying to save paying a commission to an agent) and when their property has been on the market for a while. At this point the seller is likely to be that much more motivated to consider a much lower offer. Look into these properties and try a low ball offer with one that has been on the market for a while. (Find out the story of that FSBO first though, we want to make some money but the goal is not to insult or take advantage of someone who is in a desparate or vulnerable position. The goal is to help them while we are trying to help ourselves)
Even if you were present at the offer to a traditional seller with a broker (as I mentioned above) we cannot know if the agent calls them an hour later saying, that was a crazy person and a crazy offer and I will find you someone to pay your asking price in the next couple of months! Yes, we know that the agent most likely will not be able to find someone to buy that property right now but the average seller with their 'home' on the market doesn't know what we know and will believe (from their agent) that a great offer will be made!
Low ball offers are not going to get you in the good graces with the listing agents. You are going to get the reputation of putting in ridiculous low ball offers and be blacklisted by your local real estate community. The fact is banks are NOT accepting low ball offers, even if you have all the reason in the world to offer a low ball offer. When a foreclosure initially comes on the market, the bank has a set % they will accept for the house. It is usually 90% of FMV. As the house sits on the market that % goes down a little bit every time, but not much. What you need to do is find houses that our within 15 to 20% of your MAO and then make the lower offer. You better have CASH and NO contingencies in your offer and an end buyer ready to go. Escrow should not be more than 30 days. You need to get friendly with some listing agents, in person, and tell them what you are looking for and what % of FMV. Be reasonable. It is very hard to come by a property being sold at 50% of FMV these days. Banks are trying to avoid a repeat of the late 80’s, early 90’s housing crash. They’re not releasing property like everybody thought, and they’re being sticklers about their price points. You need to find out what your buyers are willing to pay. For example, if your buyer is willing to pay 75% of ARV. That means your offers should be around 70% of FMV minus repairs. The 5% will give you a nice little profit for wholesaling. You’re not going to become an instant millionaire, but if you repeat this process 2 to 4 times a month you should be bringing in at least 10k to 20k per month. Just keep in mind that REOs are the hardest to maneuver. However, once you’re in, you’re golden! Also, don't forget to follow up on your rejected offers. They bank may not accept your offer this month, but next month your offer may be more enticing to them. Hope this helps.
Everytime you repeat the words "I CAN DO IT" with conviction, you cancel or override your fear and increase your confidence. By repeating this affirmation over and over, you can eventually build your courage and confidence to the point where you are unafraid. -Brian Tracy-
Been there too...put lots of offers in, and the agents supposedly said insulting...have no idea if all the offers were presented or not...Aw well...ya live and learn...try to research more and find out what house are selling for on a regular basis...and work from there...if selling for 100,000, go with 70-75,000...something like that...
when I first started, i was just going for things...didn't know what I was doing, and probably looked dumb on more than one occasion...but where I am now, I have just taken everything, and learned/grown...and still making mistakes, but not the same ones...so when I get all the mistakes out of the way, I will be golden...I learn and don't make the same mistakes...
__________________
~TAKE ACTION AND THINGS WILL HAPPEN~
***Something to Believe In***
"If you want something, GO GET IT...PERIOD" Will Smith
***"I CAN'T IS NOT A EXCUSE...IT JUST MEANS YOU WON'T"***
"Obstacles are those frightful things you see when you take your eyes off your goal" Henry Ford
~"Success doesn't come to you...You go to it" Marva Collins~
KimmyJ- You have made some very good points here. I agree with you inregards to being careful to not be blackballed. It will take a while to repair your rep.
I just had a situation where I mad a pretty low offer, and my realtor had a sneeking hunch the sellers agent did do anything with the offer and he nicely threatened her and by Joe.. The bank came back with an offer. Surprise!! I countered back and just under what they countered and I hope to hear something Monday. Part of my consideration on my offer is an offer so that the house will cash flow for me or my end buyer.
I think asking for a written verification is a good idea if you think someone is not presenting your offers. I will keep that is n mind.
Also, the REOs seem to be accepting about 10-15% off thier mark. But, like KimmyJ said they have to "soak" for awhile. And yes be persistant reoffer everyother week, got that one from Matt Larsen.
Dan keep making offers
I say make your offers. In my opinion who cares if who cares if someone is offended. Thats why its an offer. ACCEPT IT OR REJECT IT. The agents have there own persoanl interest when it comes to these offers. It means a lower commission for them. However when making low offers make sure you can justify the low offer. Don't just make low offers to make low offers. Seriousy take in what these houses look like. Build your buyers list that consist of end buyers with different needs. Ex. Rehab, single home buy and hold, multi units, someone you can wholesale pretty houses with lease options or seller financing. This way if you get 35k of 200k house you can wholesale your option. You have to find you a agent who is willing to find junkers and houses that need some work to major work and who is willing to submitt low offers. Guys don't get discouraged. Move to the next. Make sure you can justify your offers. Can't make a low offer on a pretty house ready to be rented becasue the family is in foreclosure Try to get it discounted so you can lease option on open the gap to get a bigger cash flow and cash out in the end for the amount discounted or more. Agents are scary becasue they have been trained and so controlled, they can't think outside the box, so on to the next guys and gals. Or perhaps go get your license so you don't have to depend on these agents. I did....
Here's my take. I have sent many, many low ball offers for my clients and myself. Some of the return letters/emails that I have received from listing agents are rude, to put it mildly. I have sent copies of these letters to my clients to show them what the reaction to low ball offers is. I have found that it is well worth your time to prequalify your properties, before makeing offers. Find properties that require rehab, the more the better. Find properties that have been on the market for a long time. You can also attach an estimate of repairs needed to rehab the property. If your agent will do it, have them call the listing agent, and get a feel for what the seller will accept. If your agent will present your position, which is that, as an investor, you need to buy at a price that allows you to purchase, rehab, hold, and sell at a modest profit, he will have a feel for what to offer, or if a low ball offer has a chance to be accepted. If you are targeting properties that will probably only be picked up by investors, your agent should be able to convince the listing agent to present your offer, and relay some of those points to the seller.
Listing agents are responsible to the seller. They will do what they think is in the best interest of their clients. I have a friend who is an REO listing agent. It is not uncommon for the lenders to have an agreement with the listing agent to reject all offers below a preset percentage of the list price. So,if this is the case, the offer will ethically be rejected, without being presented.
I have also requested a written response to my offers. When you do this, you are telling the agent, that you don't think he is doing his job properly. You will get a written response, but the agent is probably not working in your best interest.
These are my observations and opinions. They are not necessarily the opinions of all RE agents.
Al
__________________
"NOW GO FIND A DEAL"
Watch your thoughts; They become words,
Watch your words; They become actions,
Watch your actions; They become habits,
Watch your habits; They become character,
Watch your character, it becomes your destiny.
as a former realestate agent in ohio, the agent is bound by contract and by the state licensing authority to submit any and all offers made by buyers. if the agent is found not submitting any offer he/she runs the risk of losing their agent license. maybe by subtly letting the agent know what he is bound to do may "nudge" him in the right direction.
Perhaps you offers were actually too low. I think some of you are too hard on realtors, and while some may have a bad rap, they/we do work hard
I for one have no problem telling a client that they're offer is too low and while I am SUPPOSED I have at times refused to submit an offer and told my client my reasons for doing so.
Some of you must understand that our jobs continue past you and if you become known as the lowball realtor, sometimes that works against you in the future.
I know everyone, myself included is looking for a deal, but I tell my clients all the time; bid like you want it.
I like to make a list of the major repairs with the anticipated cost and include pictures to accompany a low offer. The guy sitting at the REO desk likely has no idea what the house looks like.
One thing that we have not addressed here is the offer. What percentage of ARV are these offers. Private money or Hard Money lenders are taking less and less risk on their loans. Two years ago, you could get money for 75% of ARV. A year ago, it was 60% of ARV. Now many want 50% of ARV. This is causing offers to go lower and lower. Many agents blame investors for the continuing decline in the market. As under market value offers are accepted, the average market value goes down. Then under market offers are based on the new numbers, which takes the values down more. Agents understand that they need to work with investors to move many of these properties, but they don't like it.
I believe banks are trying to slow down this decline in value by reducing inventory, and I believe it is working. Until property buyers, other than investors, are able and willing to purchase property, the market will not improve.
__________________
"NOW GO FIND A DEAL"
Watch your thoughts; They become words,
Watch your words; They become actions,
Watch your actions; They become habits,
Watch your habits; They become character,
Watch your character, it becomes your destiny.
as a former realestate agent in ohio, the agent is bound by contract and by the state licensing authority to submit any and all offers made by buyers. if the agent is found not submitting any offer he/she runs the risk of losing their agent license. maybe by subtly letting the agent know what he is bound to do may "nudge" him in the right direction.
Technically you are correct, but the listing agent works for the bank. If the bank tells the listing agent that they will not entertain any offers below this price then the listing agent has every right to follow their client's request and not send them your offer. Now if you create a good relationship with the listing agent, you might get the agent to call the asset manager direct and see if he/she can work something out on your behalf, but you're basically out of luck if the bank says no offers accepted below this price point.
Thank you for responding. I was using Nstreet's formula for my offering price. These were all REO properties over 160 days old. All my end buyers want 65%, which makes it tough on these deals. I'm also using transaction funding, so that fee is also included which gets pretty expensive. On my offers my fee is as low as 2% because I feel like my offers are getting too low. All my offers are between 50-60%. I'm not sure what I should do............
Regards,
John <>< Future DG & DL REI Billionaire
ASPEN PROPERTIES "I BUY (ALL CA$H), HOLD, LEASE & SELL Commercial and Residential Properties" ANY LOCATION, ANY CONDITION, ANY PRICE http://ctaffordablehomesforall.usapropertywholesale.com/
I Believe Ch 6 in Profit from Real estate right now discusses this subject where Matt Larsen (CBRPower) has found THE RIGHT AGENT who it has been explained to that they will be MAKING LOTS OF LOW OFFERS and OFFENDING OTHER PEOPLE. The key is to clarify this up front to make sure your real estate agent understands that and is comfortable with it as Submitting 25-30 Low offers at 30-50% of asking Price is a Genuine and listed strategy because 1 out of 25-30 will go thru. We are told to use it If we find the right agent who is willing and able to submit Lots of Offers. Matt Larsens agent Star also has a letter on this website where she explains professionally and courteously to anyone who will listen that the low offer is Not an intent to Offend; but we are offering CASH offers to CLOSE QUICKLY to help alleviate sellers who are tired of waiting and waiting and Not being able to sell their house because: No one can get financing in this Market; because they don't want to have to deal with realtors and commissions; etc. The list is endless....The strategy is taught and if it worked for one of Deans most successful students ever-we should consider it; I think.
__________________
JER 29:11 Thoughts of Hope; thoughts of a blessed Future
Most Realtors are making enemies out of investors. I've made low offers and I got the same reaction. These people are still trying to make big commissions based on the hey-day of real estate. I think they were part of the problem trying to get people to bid higher than the other person with their "Highest and Best". One investor I knew went to the seller, bought the title from them, and then made an offer on the note directly to the bank. The Realtor was pretty ****ed off, but it was their fault for not submitting the offer. The word I'm hearing from a few attorney's is that 2010 will mark the year homeowners will start filing lawsuits against their Realtors for not getting their houses sold when offers were made. A Realtors job is to sell the house, especially if its a short sale and do whats best for the seller, not their own wallets. Realtors are letting some sellers go to foreclosure because they cant get over their ego's.
Also keep in mind that because a bank did not accept your low offer today, 3 weeks to one month later they might accept someone else's offer that might have been lower than your offer! How does that work? well things changes with the banks on a daily basis, sometimes they need to move a property that might be a hastle for the bank to keep quicker than others, trying to get a hold of the REO bank asset manager so you bypass your Realtor and their Realtor, some banks are willing to work out a deal, remember banks do not make money on houses that are sitting, they have already took a great loss when they foreclosed the house, not only the debt owed by previous owner, but also by the fees they must pay to foreclose on a house, so sometimes making a sweet offer would work out better than a blunt offer. such as:
I Really like this property, but the roof is in bad shape and will need replacement, I love the size of the kitchen but this cabnetry are out dated and I will need to install new ones before people would even consider looking at this house, you know stuff like that, and you can even mention their on going expences with light bill, water bill (if Aplicable) lawn maintnace, so try to add all that in the contract, be sympathetic.
""""Perhaps you offers were actually too low. I think some of you are too hard on realtors, and while some may have a bad rap, they/we do work hard
I for one have no problem telling a client that they're offer is too low and while I am SUPPOSED I have at times refused to submit an offer and told my client my reasons for doing so.
Some of you must understand that our jobs continue past you and if you become known as the lowball realtor, sometimes that works against you in the future.""""
my opinium in this quote above, if you have a realtor like this one, move on to better things, i dont understand how a low offer would effect a realtor
in any way shape or form, their jobs are to help sell or help buy, by putting offers..
you see many realtors get lazy and dont want to do the work, so upfront let him/her know that you want a confirmation from every offer that was placed, a realtor can send over 100 offers in 1-2 hours, depending on how fast they can type a person first and last name on the contract and its address("COPY AND PASTE??")
another thing is that realtors are the same thing as a sales man on a car lot the only difference is they deal with houses.
keep in mind that they are one of the most negative people in the world, you see what happens in a real Estate agencies you have your (2%)producers your (20%)average, and your (78%)Negative crap talkers, the 78% witch I think I am being moderate on the numbers will always give you an excuse not to send a low offer, if they were spending the money, and the shoes were reversed they would expect you to do the same exact thing.
so this reputation "STUFF" is "STUFF"<---(I am being nice here).
I guarantee you that if you send a high offer they will write up the contract in a sec because they know it will get accepted, and a sale is there and they will get paid, but when they percieve sale is not there, they tend to become lazy, you have to remind your realtor that if you don't purchase a house they will not get paid!
by the way I am not here demizing anyone, I am simply pointing out what I have seing out there, and still see to this date.
good luck to all
Luiz
__________________
"Obstacles are what you see when you take your eyes off your goal"
Dean Graziosi
So your saying that i/anyone should discuss their plans ,ideas,techniques with the realitor when interviewing them to see if they are willing to do low offers for you?So you can avoid a "lazy" angry agent
Mike
__________________
"Every failure brings with it the seed of an equivalent success"
Napoleon Hill
My realtor and broker knew actually what I was doing from the get go. That is what is so frustrating. I have requested that my broker and realtor send me the rejected letter from the listing agent. I also submitted some offers without my realtor or broker and they were still getting rejected and telling me my offers are insulting.
I recall making an offer with a realtor on a house two weeks ago and the seller asked the realor, "does he want a corvette too"?? The seller actually lowered their offer a week later. So, don't worry about it. Keep making offers.
__________________
"If you cannot do great things, do small things in a great way.”
Napoleon Hill quote
Question for my DG family; where do most of you live that you're making all these extremely lowball offers and your realtors are cool and not complaining and getting accepted????
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Tell me what happen?
"Don't tell me I can't, Tell me how I can."
You know what, the same thing has happened to me...
I personally think the agents say that cause the commission is based off of sales price.
If the commissions too low, they wont even submit the offer.
My 2 cents opinion... if anyone knows anything please post
I DO KNOW... as per contract, they are "SUPPOSED" to submit every offer. I just don't think they morally uphold it.
Knowledge is Power
- Pimpedoutgeese
Allow your fear to gently pass. Then genuinely ask yourself,
“What needs to be done?”
Hey..I just made a total low ball offer on a house cause it's what I want & it's been on the market 101 days so I figured why not try & I could tell the agent didn't want to make the offer but I said I want to anyway so she sent me the contract to sign so hey I figure other people on this site do it so heck I will try!
I personally think the agents say that cause the commission is based off of sales price.
If the commissions too low, they wont even submit the offer.
My 2 cents opinion... if anyone knows anything please post
I DO KNOW... as per contract, they are "SUPPOSED" to submit every offer. I just don't think they morally uphold it.
Knowledge is Power
- Pimpedoutgeese
I am 99.99% sure that this is true but if the law has changed I hope someone will jump in and set the record straight.
I really believe that you can say to an agent that you would like to be present (live and in person) when your offer is made to the seller. (Let's see if someone can confirm this first though) but I think that the agent, legally, cannot refuse this request!
Great Quote: Knowledge is Power!
Angela
I do not, for one second, believe that they submit every offer either.
Angela
I believe you can request a written confirmation of the sellers answer, which will tell you if they submitted your offer or not.
Maybe AL can chime in.
I think that the really low ball offers work best with FSBO properties (trying to save paying a commission to an agent) and when their property has been on the market for a while. At this point the seller is likely to be that much more motivated to consider a much lower offer. Look into these properties and try a low ball offer with one that has been on the market for a while. (Find out the story of that FSBO first though, we want to make some money but the goal is not to insult or take advantage of someone who is in a desparate or vulnerable position. The goal is to help them while we are trying to help ourselves)
Even if you were present at the offer to a traditional seller with a broker (as I mentioned above) we cannot know if the agent calls them an hour later saying, that was a crazy person and a crazy offer and I will find you someone to pay your asking price in the next couple of months! Yes, we know that the agent most likely will not be able to find someone to buy that property right now but the average seller with their 'home' on the market doesn't know what we know and will believe (from their agent) that a great offer will be made!
Angela
Hi,
I left a message for Al to click into this forum and give us some advice. Forum topics drop off the page so quickly now.
Great suggestion to ask him though. Didn't think of it myself.
Anglea
Low ball offers are not going to get you in the good graces with the listing agents. You are going to get the reputation of putting in ridiculous low ball offers and be blacklisted by your local real estate community. The fact is banks are NOT accepting low ball offers, even if you have all the reason in the world to offer a low ball offer. When a foreclosure initially comes on the market, the bank has a set % they will accept for the house. It is usually 90% of FMV. As the house sits on the market that % goes down a little bit every time, but not much. What you need to do is find houses that our within 15 to 20% of your MAO and then make the lower offer. You better have CASH and NO contingencies in your offer and an end buyer ready to go. Escrow should not be more than 30 days. You need to get friendly with some listing agents, in person, and tell them what you are looking for and what % of FMV. Be reasonable. It is very hard to come by a property being sold at 50% of FMV these days. Banks are trying to avoid a repeat of the late 80’s, early 90’s housing crash. They’re not releasing property like everybody thought, and they’re being sticklers about their price points. You need to find out what your buyers are willing to pay. For example, if your buyer is willing to pay 75% of ARV. That means your offers should be around 70% of FMV minus repairs. The 5% will give you a nice little profit for wholesaling. You’re not going to become an instant millionaire, but if you repeat this process 2 to 4 times a month you should be bringing in at least 10k to 20k per month. Just keep in mind that REOs are the hardest to maneuver. However, once you’re in, you’re golden! Also, don't forget to follow up on your rejected offers. They bank may not accept your offer this month, but next month your offer may be more enticing to them. Hope this helps.
KimmyJ
Press on…
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Great Info. Thanks
Everytime you repeat the words "I CAN DO IT" with conviction, you cancel or override your fear and increase your confidence. By repeating this affirmation over and over, you can eventually build your courage and confidence to the point where you are unafraid. -Brian Tracy-
Been there too...put lots of offers in, and the agents supposedly said insulting...have no idea if all the offers were presented or not...Aw well...ya live and learn...try to research more and find out what house are selling for on a regular basis...and work from there...if selling for 100,000, go with 70-75,000...something like that...
when I first started, i was just going for things...didn't know what I was doing, and probably looked dumb on more than one occasion...but where I am now, I have just taken everything, and learned/grown...and still making mistakes, but not the same ones...so when I get all the mistakes out of the way, I will be golden...I learn and don't make the same mistakes...
~TAKE ACTION AND THINGS WILL HAPPEN~
***Something to Believe In***
"If you want something, GO GET IT...PERIOD" Will Smith
***"I CAN'T IS NOT A EXCUSE...IT JUST MEANS YOU WON'T"***
"Obstacles are those frightful things you see when you take your eyes off your goal" Henry Ford
~"Success doesn't come to you...You go to it" Marva Collins~
KimmyJ- You have made some very good points here. I agree with you inregards to being careful to not be blackballed. It will take a while to repair your rep.
I just had a situation where I mad a pretty low offer, and my realtor had a sneeking hunch the sellers agent did do anything with the offer and he nicely threatened her and by Joe.. The bank came back with an offer. Surprise!! I countered back and just under what they countered and I hope to hear something Monday. Part of my consideration on my offer is an offer so that the house will cash flow for me or my end buyer.
I think asking for a written verification is a good idea if you think someone is not presenting your offers. I will keep that is n mind.
Also, the REOs seem to be accepting about 10-15% off thier mark. But, like KimmyJ said they have to "soak" for awhile. And yes be persistant reoffer everyother week, got that one from Matt Larsen.
Dan keep making offers
"Don't tell me I can't, Tell me how I can."
I say make your offers. In my opinion who cares if who cares if someone is offended. Thats why its an offer. ACCEPT IT OR REJECT IT. The agents have there own persoanl interest when it comes to these offers. It means a lower commission for them. However when making low offers make sure you can justify the low offer. Don't just make low offers to make low offers. Seriousy take in what these houses look like. Build your buyers list that consist of end buyers with different needs. Ex. Rehab, single home buy and hold, multi units, someone you can wholesale pretty houses with lease options or seller financing. This way if you get 35k of 200k house you can wholesale your option. You have to find you a agent who is willing to find junkers and houses that need some work to major work and who is willing to submitt low offers. Guys don't get discouraged. Move to the next. Make sure you can justify your offers. Can't make a low offer on a pretty house ready to be rented becasue the family is in foreclosure Try to get it discounted so you can lease option on open the gap to get a bigger cash flow and cash out in the end for the amount discounted or more. Agents are scary becasue they have been trained and so controlled, they can't think outside the box, so on to the next guys and gals. Or perhaps go get your license so you don't have to depend on these agents. I did....
I got my mind made up.....
www.Kingjussinvestors.com
www.jussinvestors.com (buyers site)
Here's my take. I have sent many, many low ball offers for my clients and myself. Some of the return letters/emails that I have received from listing agents are rude, to put it mildly. I have sent copies of these letters to my clients to show them what the reaction to low ball offers is. I have found that it is well worth your time to prequalify your properties, before makeing offers. Find properties that require rehab, the more the better. Find properties that have been on the market for a long time. You can also attach an estimate of repairs needed to rehab the property. If your agent will do it, have them call the listing agent, and get a feel for what the seller will accept. If your agent will present your position, which is that, as an investor, you need to buy at a price that allows you to purchase, rehab, hold, and sell at a modest profit, he will have a feel for what to offer, or if a low ball offer has a chance to be accepted. If you are targeting properties that will probably only be picked up by investors, your agent should be able to convince the listing agent to present your offer, and relay some of those points to the seller.
Listing agents are responsible to the seller. They will do what they think is in the best interest of their clients. I have a friend who is an REO listing agent. It is not uncommon for the lenders to have an agreement with the listing agent to reject all offers below a preset percentage of the list price. So,if this is the case, the offer will ethically be rejected, without being presented.
I have also requested a written response to my offers. When you do this, you are telling the agent, that you don't think he is doing his job properly. You will get a written response, but the agent is probably not working in your best interest.
These are my observations and opinions. They are not necessarily the opinions of all RE agents.
Al
"NOW GO FIND A DEAL"
Watch your thoughts; They become words,
Watch your words; They become actions,
Watch your actions; They become habits,
Watch your habits; They become character,
Watch your character, it becomes your destiny.
Frank Outlaw
as a former realestate agent in ohio, the agent is bound by contract and by the state licensing authority to submit any and all offers made by buyers. if the agent is found not submitting any offer he/she runs the risk of losing their agent license. maybe by subtly letting the agent know what he is bound to do may "nudge" him in the right direction.
Perhaps you offers were actually too low. I think some of you are too hard on realtors, and while some may have a bad rap, they/we do work hard
I for one have no problem telling a client that they're offer is too low and while I am SUPPOSED I have at times refused to submit an offer and told my client my reasons for doing so.
Some of you must understand that our jobs continue past you and if you become known as the lowball realtor, sometimes that works against you in the future.
I know everyone, myself included is looking for a deal, but I tell my clients all the time; bid like you want it.
I like to make a list of the major repairs with the anticipated cost and include pictures to accompany a low offer. The guy sitting at the REO desk likely has no idea what the house looks like.
Blessings & Favor,
Gena.
Follow my Blog: www.genahoriatis.com
I can do all things through Christ who strengthens me. Phil 4:13
Psalm 1:1-3
One thing that we have not addressed here is the offer. What percentage of ARV are these offers. Private money or Hard Money lenders are taking less and less risk on their loans. Two years ago, you could get money for 75% of ARV. A year ago, it was 60% of ARV. Now many want 50% of ARV. This is causing offers to go lower and lower. Many agents blame investors for the continuing decline in the market. As under market value offers are accepted, the average market value goes down. Then under market offers are based on the new numbers, which takes the values down more. Agents understand that they need to work with investors to move many of these properties, but they don't like it.
I believe banks are trying to slow down this decline in value by reducing inventory, and I believe it is working. Until property buyers, other than investors, are able and willing to purchase property, the market will not improve.
"NOW GO FIND A DEAL"
Watch your thoughts; They become words,
Watch your words; They become actions,
Watch your actions; They become habits,
Watch your habits; They become character,
Watch your character, it becomes your destiny.
Frank Outlaw
Technically you are correct, but the listing agent works for the bank. If the bank tells the listing agent that they will not entertain any offers below this price then the listing agent has every right to follow their client's request and not send them your offer. Now if you create a good relationship with the listing agent, you might get the agent to call the asset manager direct and see if he/she can work something out on your behalf, but you're basically out of luck if the bank says no offers accepted below this price point.
KimmyJ
Press on...
www.tagteampropertiesllc.com
Thank you for responding. I was using Nstreet's formula for my offering price. These were all REO properties over 160 days old. All my end buyers want 65%, which makes it tough on these deals. I'm also using transaction funding, so that fee is also included which gets pretty expensive. On my offers my fee is as low as 2% because I feel like my offers are getting too low. All my offers are between 50-60%. I'm not sure what I should do............
Thanks for your advice and help.
Kimmy, well put....thanx for the info.
John
Attract Private Investors to fund your deals so you can do more deals while using Other People's Money (OPM). For more info go to:
http://www.mcssl.com/app/aftrack.asp?afid=1029023
Regards,
John <>< Future DG & DL REI Billionaire
ASPEN PROPERTIES "I BUY (ALL CA$H), HOLD, LEASE & SELL Commercial and Residential Properties" ANY LOCATION, ANY CONDITION, ANY PRICE
http://ctaffordablehomesforall.usapropertywholesale.com/
I Believe Ch 6 in Profit from Real estate right now discusses this subject where Matt Larsen (CBRPower) has found THE RIGHT AGENT who it has been explained to that they will be MAKING LOTS OF LOW OFFERS and OFFENDING OTHER PEOPLE. The key is to clarify this up front to make sure your real estate agent understands that and is comfortable with it as Submitting 25-30 Low offers at 30-50% of asking Price is a Genuine and listed strategy because 1 out of 25-30 will go thru. We are told to use it If we find the right agent who is willing and able to submit Lots of Offers. Matt Larsens agent Star also has a letter on this website where she explains professionally and courteously to anyone who will listen that the low offer is Not an intent to Offend; but we are offering CASH offers to CLOSE QUICKLY to help alleviate sellers who are tired of waiting and waiting and Not being able to sell their house because: No one can get financing in this Market; because they don't want to have to deal with realtors and commissions; etc. The list is endless....The strategy is taught and if it worked for one of Deans most successful students ever-we should consider it; I think.
JER 29:11 Thoughts of Hope; thoughts of a blessed Future
Most Realtors are making enemies out of investors. I've made low offers and I got the same reaction. These people are still trying to make big commissions based on the hey-day of real estate. I think they were part of the problem trying to get people to bid higher than the other person with their "Highest and Best". One investor I knew went to the seller, bought the title from them, and then made an offer on the note directly to the bank. The Realtor was pretty ****ed off, but it was their fault for not submitting the offer. The word I'm hearing from a few attorney's is that 2010 will mark the year homeowners will start filing lawsuits against their Realtors for not getting their houses sold when offers were made. A Realtors job is to sell the house, especially if its a short sale and do whats best for the seller, not their own wallets. Realtors are letting some sellers go to foreclosure because they cant get over their ego's.
BRE #01956371
Also keep in mind that because a bank did not accept your low offer today, 3 weeks to one month later they might accept someone else's offer that might have been lower than your offer! How does that work? well things changes with the banks on a daily basis, sometimes they need to move a property that might be a hastle for the bank to keep quicker than others, trying to get a hold of the REO bank asset manager so you bypass your Realtor and their Realtor, some banks are willing to work out a deal, remember banks do not make money on houses that are sitting, they have already took a great loss when they foreclosed the house, not only the debt owed by previous owner, but also by the fees they must pay to foreclose on a house, so sometimes making a sweet offer would work out better than a blunt offer. such as:
I Really like this property, but the roof is in bad shape and will need replacement, I love the size of the kitchen but this cabnetry are out dated and I will need to install new ones before people would even consider looking at this house, you know stuff like that, and you can even mention their on going expences with light bill, water bill (if Aplicable) lawn maintnace, so try to add all that in the contract, be sympathetic.
""""Perhaps you offers were actually too low. I think some of you are too hard on realtors, and while some may have a bad rap, they/we do work hard
I for one have no problem telling a client that they're offer is too low and while I am SUPPOSED I have at times refused to submit an offer and told my client my reasons for doing so.
Some of you must understand that our jobs continue past you and if you become known as the lowball realtor, sometimes that works against you in the future.""""
my opinium in this quote above, if you have a realtor like this one, move on to better things, i dont understand how a low offer would effect a realtor
in any way shape or form, their jobs are to help sell or help buy, by putting offers..
you see many realtors get lazy and dont want to do the work, so upfront let him/her know that you want a confirmation from every offer that was placed, a realtor can send over 100 offers in 1-2 hours, depending on how fast they can type a person first and last name on the contract and its address("COPY AND PASTE??")
another thing is that realtors are the same thing as a sales man on a car lot the only difference is they deal with houses.
keep in mind that they are one of the most negative people in the world, you see what happens in a real Estate agencies you have your (2%)producers your (20%)average, and your (78%)Negative crap talkers, the 78% witch I think I am being moderate on the numbers will always give you an excuse not to send a low offer, if they were spending the money, and the shoes were reversed they would expect you to do the same exact thing.
so this reputation "STUFF" is "STUFF"<---(I am being nice here).
I guarantee you that if you send a high offer they will write up the contract in a sec because they know it will get accepted, and a sale is there and they will get paid, but when they percieve sale is not there, they tend to become lazy, you have to remind your realtor that if you don't purchase a house they will not get paid!
by the way I am not here demizing anyone, I am simply pointing out what I have seing out there, and still see to this date.
good luck to all
Luiz
"Obstacles are what you see when you take your eyes off your goal"
Dean Graziosi
Live, Love, Laugh!!!!!
So your saying that i/anyone should discuss their plans ,ideas,techniques with the realitor when interviewing them to see if they are willing to do low offers for you?So you can avoid a "lazy" angry agent
Mike
"Every failure brings with it the seed of an equivalent success"
Napoleon Hill
http://www.deangraziosi.com/real-estate-forums/investing-journals/42379/...
Mike
Kalamazoo,MI
My realtor and broker knew actually what I was doing from the get go. That is what is so frustrating. I have requested that my broker and realtor send me the rejected letter from the listing agent. I also submitted some offers without my realtor or broker and they were still getting rejected and telling me my offers are insulting.
Bid like you want it
I recall making an offer with a realtor on a house two weeks ago and the seller asked the realor, "does he want a corvette too"?? The seller actually lowered their offer a week later. So, don't worry about it. Keep making offers.
"If you cannot do great things, do small things in a great way.”
Napoleon Hill quote
Maybe your going too low...what kinds of offers are you making...like what % of FMV?
"Every failure brings with it the seed of an equivalent success"
Napoleon Hill
http://www.deangraziosi.com/real-estate-forums/investing-journals/42379/...
Mike
Kalamazoo,MI
Question for my DG family; where do most of you live that you're making all these extremely lowball offers and your realtors are cool and not complaining and getting accepted????