How do you do low ball offers?

My suggestion would be to get a new agent. You're not going to find buyers that are willing to buy your deals if the number don't fit.

Find an agent that's comfortable with putting in low offers. Might as well, since it's going to be a numbers game and she or he is going to need to put in many, many offers. Good luck!

you adjust your offer depending on the cycle we are in especially if you can flip it quicker and/or without a lot of rehab.

You are the master of your fate. If your agent doesn't want to offer low ball offers, find a new agent or do some of your own work and offer FSBOs only and cut out the agent entirely.

Of course, you can see why the agent is balking. She believes the offers will not turn into sales and she is doing a lot of work for absolutely nothing. She's right but you didn't set up the system of her compensation so she just has to deal with it or choose another career.

that the agents know the market and know that these offers won't fly

In most markets, unless you can close within a week, and even then, most sellers aren't taking mega discounts just because.

Make an offer that makes the deal, not just to make an offer. The symbolism of making mega offers and no responses or closings will wear off soon on all parties, and there are no 'moral victories' in that.

If you go thru 10 agents because they wouldn't adhere to your strategy, then maybe you should change your strategy.

Hope this helps.

Bill / Elix thanks for your feedback! I think I may have to adjust my strategy and offers with the agent. The realtor looks like they know their market and works with investors and they say that at this time great deals don't come too often. Maybe 20-30% discount to FMV might work to get the deals.

Has anyone applied Matt Larson's 25:1 principle successfully?

I will also have to work on FSBOs more as Bill suggested.

You can't or shouldn't make let's say 50% off offers straight across the board as for some areas of a city that would be an extreme discount where as others it would be suitable or even a bit high.

There's more of art to it but basically your median income homes should be offered at around a 25-35% and as you move down the scale of neighborhoods and price range the % off increases. You may be offering 55-65% off in the low income neighborhoods.

Once you find an agent that will do this you kind of have to play with it for a few weeks to see what works.

Ex. When I started out low balling I was making offers at 55% of list price... out of 60 offers I got 11 on contract. So I decreased it to 45% shot them out again and came up with nothing.

This DG Family is simply amazing! The quality & variety of responses is both enriching and encouraging.

Thanks Mark for your interesting response. You've applied one of the more basic fundamentals of consumer products marketing to real estate. And this makes a lot of sense. I will see how I can apply the different ranges discount as it applies to median income and low income homes.Nothing is cut and dried. Different approaches/offers to different markets. Me and my power team have to be flexible and quick footed to adjust..that's for sure.

Am also curious how many folks are employing Matt Larson's 25.1 offer strategy and how the discount amount is determined.
Mark suggested the lower the FMV the greater the discount. But what other factors play a role in determining that discount percentage?

Thanks in advance for your input!!!

pay attention to the days on market. the longer it's been on the market the better the chances of getting a low ball excepted. I won't low ball unless 180 days or more, but that's just me and my market. If you're lucky enough to be in a fast moving market then 60 days may be adequate.

Segmenting a market... ask your agent to provide you a list of one liners( each line will have the address, dom, bed, bath, current status and price). For me I have the agent provide a list from 25k up to 150k. Then highlight the ones that are over your desired dom. Next drive those areas and when going through note what kind of neighborhoods they are, low, working, middle, upper etc. Then you can relate those properties to a local map and it should show you which zip codes get differnt offers. It's pretty basic but it works.

why don't you ask your agent for a list of his/her sales for the last year; how many did she buy/sell, what were the asking prices, how much were they sold for; this will give you an idea of how aggressive your agent's offers were...
Some agents actually post their sales on their own websites...

Also, you may want to keep in mind what Joe Jurek says: 'if you're not embarassed by your offer, you probably are offering too much'

wishing you success,
Valerie

DOM - Mark, Days on market here used to be 31 days, now it's 40 days so I will probably be targeting those at 90 and above for low ball offers.I will have to drive by with my "google maps" car to get a feel of these areas.

Agent's Track record - Valerie, this may not be bad idea even for those of us who continue to look for additional agents to add to their power team. This way you achieve 2 things: you determine how good an agent was in sales & in aggressiveness of offers and you also get a feel for how the market conditions/supply-demand is. With this you have a basis to compare one agent against another. I fired off an email to my realtor asking for this info as well as listing which properties were sold to investors and which to homeowners.

I've had the same problem. I found a new agent and have been getting better results. It's difficult to find an agent that is willing to make multiple offers at 50%. Don't change the offering strategy because they will be accepted eventually.

I understand making multiple offer like Matt (25:1), and I have a realtor who will accommodate my request. My question is, how does one avoid making an earnest money deposit on 25 offers? My realtor insisted I would have to place at least $1,000.00 minimum deposit before she would present the offer to the seller. At that rate I would have to come up with $25,000.00 for those offers. I must be missing an important point here. Any help on how to avoid shelling out cash to present a contract will be appreciated. Thanks

Is there a coach or someone online that can help me answer some questions that I recieved from realtor after placing my low offers?

I submitted 23 offers to my realtor he came back and ask these questions:

1. How many days escrow?

He suggests "7 days is good for cash offers"

2. Do you want termite and roof inspections?

There where other questions that i think I'm ok to answer, but the first question asked, shouldn't this be 14 days or more to allow for inspection?

Is the earnest money deposit determined by each realtor?

What happen to the $1 earnest money is anybody doing that?

VonnyV23 - What happens if that $250,000 house needs $30,000 rehab? Your offer could be actually $200,000 to $210,000 = 80% to 84% of ARV or CMV Or?? Every single professional REI that I know goes by ARV. Maybe different elsewhere. If the house needs no work and is move in ready, what are the chances of it going to an investor and not a owner/occupant. The owner/ occupant will ALWAYS pay more that an investor. That is why we need to offer on properties that will actually go to an investor. (ugly, needs work) That is if you are offering through a realtor(listed MLS properties). Dealing directly with a homeowner brings better deals and better properties and (JOY) no realtors!!

Richard, The topic of how to place offers with just a copy of your earnest money check has been discussed multiple times here. Go to The search area under Dean's photo and enter "earnest money". You will have all the info you need there.

Anthony, What are the questions?

Michael Mangham
MD Home Acquisitions LLC

Thanks for responding. Submitted my offers and realtor is asking the following questions. Not sure how to answer..

Question 1 = How many days in escrow?

Question 2 = Do I want termite and roof inspection?

Not sure what he means with days in escrow is the 14 day inspection period DG staff recommended? Do I need a termite and roof inspection?

Thank you that makes sense.

Good news. I have been in communication with a Realtor who said that his team is “comfortable with being uncomfortable” with low balling and is interested to work with me. He does not agree with what my other agent said on offers that are "nothing below assessed value" or "nothing lower than 30%".

He however suggested that we add a sweetener in the offer of either a QUICK COMPLETION DATE or a SHORT SUBJECT REMOVAL DATE.

What would be a realistic quick completion date and short subject removal date knowing that I will be wholesaling this property? Would appreciate you share your experience here that allowed you enough time to get a buyer to complete the wholesale deal.