OfflineI have submitted several offers but have not had any accepted or countered yet. I've written and submitted thousands of offers as a retail REA... but I'm wondering if I should be doing it differently when it comes to investment properties? Instead of using the standard TREC forms (Texas Real Estate Commission), which have tons of sections that dont really apply to an investment purchase (minimum of 8 pages), should I be using a form like the purchase agreements Dean has provided (I think its 2 or 3 pages)? I don't really feel like that contract is very user friendly tho, but that could just be because Im used to the standard form.
Also, if the property is being purchased using hard money, should it be considered a purchase with financing, or a cash sale? And in cases where the property is already listed at say, 50% ARV, is it better to try to low-ball to get an even better deal, or give them your best offer to avoid losing the deal? With properties that low, they usually get multiple offers so they wont bother to counter, they just move on to the next offer. Lol, these are the little things that leave me scratching my head. I think I'm doing it right but I would love to hear from others with experience who might have different suggestions. Thanks in advance!
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.
Never got any response here... nobody can answer even ONE of these questions?
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.
I would say that you need to hire a realtor, but then again I am one. Some people will not even take an offer seriously, if it's not done by a realtor or an attorney and done on standard, state-promulgated forms.
Maybe it's not your offers but the forms they are on.
Also, you may want to be sure that you submit proof of funds with each offer in order to be taken more seriously.
Many investors use realtors to submit their offers, including Dean.
Rick Allison, Realtor
Amarillo, Texas USA
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Hi, Monica~
I can answer a couple of questions...
When using a HM Loan to buy an MLS property or from an Institution-owned seller, it is best if you go with "financing." This is upfront and clear. Imagine their surprise when they find out it's not all cash! Sellers want to validate the buyer will close, because once a buyer fails to close, the property goes back on the market with a 'tainted' stigma attached (and likely for less). All ANY seller really wants know is that you WILL close! When a seller sees "cash sale" they have a much higher expectation of: less than a 30 day close, verifiable POF (bank statement) AND a higher earnest money. If you can provide all cash and prove it by bank statement, then use "cash."
As far as the contract, I would use the TREC contract, adding your contingency or addendum to it. Most of the investors I know here use the TREC forms. Realtors like to see it, title companies, too. When dealing with an Private Individual seller who's property is not listed on the MLS, you can use a contract of your own. It's just a matter of formality.
PS. IMO, if an MLS property is already 50¢ on the dollar and you think you will have competition or a 'bidding war,' then up the earnest money and pay asking price or a little above. This will insure your offer gets noticed. You can wager more with private owners [where there's little competition]. Of course, having access to the MLS may give you a head start! Certainly, can't hurt. ;D
Happy Prospering! ~Kat, Liberty Residential Investment Acquisitions
• "To every thing there is a season, & a time to every purpose..." ~Ecclesiastes 3:1-8
• "Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy!" ~Dale Carnegie
• "Begin, be bold, and venture to be wise." ~Horace
• "Never, never, never give up." ~Winston Churchill
• "Whatever you do, or dream you can, begin it. Boldness has genius and power and magic in it." ~Johann Wolfgang von Goethe
Monica - I only use a realtor if the home is on MLS, and I haven't found those the easiest properties to buy. Most of my purchases come from other sources - newspaper ads, Craig's list, FSBO's, attorneys, friends. In most of the non MLS cases I'm able to talk to the seller so I have a better idea what they need/want. I always write cash offers, with bank letter attached, so sellers know if we can agree there are no money issues. My offer is usually one page long - my attorney wrote it up so anyone who can read can understand it. I also buy at auctions and sheriffs foreclosure sales, so those are as is.
Did this help? Mary
I can answer a couple of questions...
When using a HM Loan to buy an MLS property or from an Institution-owned seller, it is best if you go with "financing." This is upfront and clear. Imagine their surprise when they find out it's not all cash! Sellers want to validate the buyer will close, because once a buyer fails to close, the property goes back on the market with a 'tainted' stigma attached (and likely for less). All ANY seller really wants know is that you WILL close! When a seller sees "cash sale" they have a much higher expectation of: less than a 30 day close, verifiable POF (bank statement) AND a higher earnest money. If you can provide all cash and prove it by bank statement, then use "cash."
As far as the contract, I would use the TREC contract, adding your contingency or addendum to it. Most of the investors I know here use the TREC forms. Realtors like to see it, title companies, too. When dealing with an Private Individual seller who's property is not listed on the MLS, you can use a contract of your own. It's just a matter of formality.
PS. IMO, if an MLS property is already 50¢ on the dollar and you think you will have competition or a 'bidding war,' then up the earnest money and pay asking price or little above. This will insure your offer gets noticed. You can wager better with private owners [where there's little competition]. Of course, having access to the MLS may give you a head start! Certainly, can't hurt. ;D
For those of us who are new, can you explain what the TREC contract/froms are. I looked in the "Forms and Docs" section of this website and I didn't see anything that resembled a TREC form. Maybe a dumb question but I'm curious.
Thank you.
As Monica stated above "...standard TREC forms (Texas Real Estate Commission)..."
These are official real estate contracts used in Texas. TREC is an acronym.
I believe each state has their standard forms.
Happy Prospering! ~Kat, Liberty Residential Investment Acquisitions
• "To every thing there is a season, & a time to every purpose..." ~Ecclesiastes 3:1-8
• "Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy!" ~Dale Carnegie
• "Begin, be bold, and venture to be wise." ~Horace
• "Never, never, never give up." ~Winston Churchill
• "Whatever you do, or dream you can, begin it. Boldness has genius and power and magic in it." ~Johann Wolfgang von Goethe
Sorry I missed that in the original post.
Got it now.
Thanks.
Kat, and everyone else who commented. Your suggestions have helped shed some light.
I was really confused on the HML/cash/finance issue. Some say it counts as cash... since they want POF for HML or cash offers, and a pre-qual letter for financed offers. But I agree Kat, I would think it would be more accurately categorized as a financed transaction.
As for everything else, glad to know Im not the only one who thinks this way!
Monica
Skeptic, turned hopeful, turned determined!
You will NEVER succeed if you don't try.