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Difficulty Making offers on MLS homes

louismontes profile photo
  • Friday, March 07, 2003 @ 01:04 PM EST
  • 7 Comments

hi,

I have been driving around and have seen some ugly houses that are listed on MLS. Here is what I experienced coming up with offers.

I saw a house listed for $89,990 and when I do research, the Hillsborough County Appraiser Office tells me the Just value for that house is $64,910 only. Big difference between $89K and $64K !!! Of course, looking at comps did not help, because the properties were in much better shape than the one I looked at and I did not feel comfy putting too much weight on thoses comps.

Anyway, I did the Ron LeGrand calculation:

($64K * .7) - $10K Repair - $3K my fee= $32K . So I told the listing agent that $32K is my offer and she was not sure she wanted to make that offer. She was embarrassed to offer that.

Am I doing something wrong??? I also have to put a few hundred dollar deposit which can be lost if I do not find another investor buyer(rehabber).

Please let me know what I am doing wrong,

thanks, Louis

Comments(7)

  • no photo
    vern425th March, 2003

    Loius,

    Ron LeGrand would be the first to tell you that the county is not a good judge of FMV. You can use comps on houses that are compareable to yours after the repairs are made. Once you have your ARV, subtract estimated repair costs, estimated holing costs, and selling costs. This is your break even point.

    Hope this helps,

    Vern

  • no photo
    way_motivated6th March, 2003

    also, properties listed on the MLS are scoured by many investors, the really good and obvious deals get scouped up the same day they get listed or maybe even earlier......you best bet would to have multiple "hands" reaching out for deals.....as in mailings, bandit signs, newspaper ads, flyers, magnetic signs, etc.... get creative

  • louismontes
    louismontes6th March, 2003

    thanks for your feedback ...

    besides getting comps from a realtor, are there any websites that return good comps. I know domania.com is one but I need a few more.

    I have another question .... How do I determine if the neighborhood is the right one as far as salability and so forth? Are there any resources out there to determine that?


    thanks, Louis

  • MikeT1013
    MikeT10136th March, 2003

    Louis,

    Determining salability of a property is somewhat easy. Ask any realor what the "average Days of Market" is for "subject area", they can find that info. by doing a CMA.

    You really need to find a realtor who works with investors...other realtors will distances themselves from investors because they think if I do get this guy to make an offer, it'll be something ridiculous and not worth my time and effort working with this person.

    To your success,

    Mike T
    [addsig]

  • no photo
    InActive_Account6th March, 2003

    Quote:
    On 2003-03-05 11:10, louismontes wrote:
    hi,

    I have been driving around and have seen some ugly houses that are listed on MLS. Here is what I experienced coming up with offers.
    thanks, Louis


    In most locations you will not find FMV at the court house.

  • no photo
    scr20017th March, 2003

    Don't take any crap from a realtor!!!! They will always say that they are embarrassed to submit such a low offer. What ever.... Most realtors and I have only heard this because I don't work with sellers realtors, are required by law to submit all offers. Tell the realtor that you are an investor and this is your offer, also ask for documentation to prove he submitted your offer. I think after a while you'll figure out that deals like this are calling out to a retail buyer.

    As far as money that you put down and may lose. Your probally going to loss it because the jerk realtor wants to keep it to pay for his next clients dinner. I think he's trying to sniff you out. I have never, never put down money that I wasn't going to get back. Ernest money yes, and Ernest money I try to negotiate on.

  • MikeT1013
    MikeT10137th March, 2003

    Earnest-Escrow Money aka Good Faith Money is always vunderable. I've learned to write addendums to a contract so that my escrow money isn't left exposed no more then it has to be.

    Try this, in a standard real estate contract (in Fla.) it states that the Buyer has 5 Buiness days to make application and get approval of the loan...I take it a little longer and word it a tad different.

    "This contract is expressly contingent upon the Buyer, locate financing suitable to himself with 8 Business Days from the Effective Date of this contract."

    Notice the "suitable to himself", that's GOLD Jerry! (as Banyan would say off Sienfeld) Suitable to himself does not state any specific Interest Rate, Points or Terms...so if you have a lender who'll get you 4.75%, and you're not happy with it...then walk away.

    To your success,
    [addsig]

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