How Does One Make An Offer?
I finally got off my behind and started looking at properties. How does one make an offer? Are there forms that are filled out and sent to the seller? Or does one just call and make an offer?
Any suggestions will be appreciated.
thanks.
Generally if the ouse is listed, you would call a real estate agent, and make the offer through them. If it's a FABO, then you have a phone number. Call and make an appointment to look at the property. If you want to make an offer, it can be done on a napkin, or verbally or whatever. Once accepted, get it in writing, on a purchase and sale agreement, or what ever form/contract is customary in the area you live
Find out who the listing agent is for the property.
You make the offer directly through that person.
You sign an offer sheet.
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At one level it is simple. Figure out the price you want to offer and then get it in writing.
More specifically...
In real estate, an offer is not an offer until you have it down on paper. It might not even be considered legal if there is no written agreement that both parties have signed.
You also want to make contingent offers rather then wait until you know everything you wanted to know. This way you spend your time doing a complete inspection, getting a loan sorted, making sure you can find a partner or a retail buyer (if you were trying to sell the place on) after you have an accepted offer.
A few other things...
Read the standard document that a realtor would use in your area if you were ready to make an offer. There will be a lot of information there which you should understand.
Accept that investing in RE will be something you will do for a while. You will learn and improve your offers as you go along. Each one has to be something you can live and works for you. It does not need to be the most complex or fancy deal.
If you get really good you will find you understand how to make an offer better then most Realtors so expect as much.
John
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Thanks to everyone who has responded, active-re-investor, monkfish, jeff12002.
The properties that I'm interested in are not listed but are unoccupied and have been for at least a year. All the owners are listed as out of towners. So I guess I'll offer, in writing to them, lower than the county tax appriasal pending loan approval and me looking at the properties more closely.
I hope this is a good enough plan to start. One question though. What IF all 3 owners of properties get accepted? What then? I doubt if I can get a loan for all 3, and all 3 will have a good flip.
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Whatever you do don't make an offer, unless you absolutely have to, make them give you a number first. 9 times out of 10 they will lowball themselves, your supposed to be the expert you should know what the market value of any property in your investing area, regardless of the condition. If I went around making offers first I would lose out on a ton of money, for example I signed up this guy a couple of days ago, I walked into his house thinking I could pay up to 700k for his house, and still be happy knowing I would make at least 150k after rehab, we talked for a bit and he comes out and says that he can't take anything less than 500k.....so we settled on 485k.
thanks kioki, I hadn't thought about that. I'll try that.
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I'll reiterate that you NEVER mention price first. Let them decide what they need to make them happy... you might be suprised. Out of state owners rarely keep tabs on property vaules.
Also, when it comes to BRT assessed values, they generally come in around 32% of the market value of a home. So if you make an offer based solely on that, you might come in way too low for consideration. Once again, leave the price to them, but always have a number in mind ahead of time.
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Keoki,
That' s a big profit.....imagine if you could wholesale it for 685. :-o
if you're buying a property that's listed, you're probably not going to get the best deal. agents are only looking out for their commission and if they get a low ball offer, they'll more than likely tell the seller to wait until a better offer comes in. what i do is find a property in which i am interested and make an offer directly to the seller, whether it's on the market or not. i've had the best deals on properties that aren't listed. my last offer was made by simply writing a note and putting it on my neighbors door. . . and they actually gave it to me for less than my offer, so i basically got the property for almost half of what it was worth.
also, you can make an offer on an unlisted property based on what the owner paid for it, and you can find that out through a title company. the trick is to make them an offer that's higher than what they paid, yet lower than market value. and hopefully they'll have no idea what the current market value of their property is and accept your offer. i've yet to try this.
anyway, the "note on the door" method seems to be the easiest for me. i'm new to this whole RE game, but i'm only 25 and already have 3 properties. whatever works, right?