Thoughts Anybody?
I went to look at a property today and its a forclosure (VA loan went bad according to realtor) and they are asking $187,500. There was some fire damage in the kitchen but nothing structural. We are estimating about 15K-20K in rehab + holding costs..etc...Comps are at 250K+ We submitted and offer for 175K and agent came back saying that they also recieved another offer today and they are looking for my very best offer. What do you guys think? House is almost new..built in 2000.
tassod...
Be more specific with regards to what are your intentions for this property.
What is the current state of your market right now? Do you intend to buy and hold? Or Rental?
Are you personally doing the rehab work or are you contracting that out? If your intentions are to buy/sell,, will you be selling it using an REA or doing it FSBO?
I'm presuming you may be new to this (only by virtue of your 13 posts), so as a side note, research your insurance costs for this property (based on your intentions) because often, new REI's underestimate their costs in this area.
Provide us with a little more info and you'll get plenty of good opinions and advise from here.
Dave
My intensions are to buy, rehab, sell. I will be doing a lot of the work my self but i will also be hiring a contractor for some of the work. Also, my REA will not charge me if he sells it, but if another agent brings buyer, i will only pay his commission but it will be listed in MLS. I have looked into insurance..worst case if i hold for 6months, it would cost around $600-$700. This property is in Romeoville, IL.
be strict with your agent...ALL agents I've ever heard about say something to the sort of recieving another offer when you give one...
their interest is preserved in any offer you make...
be wise, if you can go a bit higher, go higher...ask what the other offer is at... they will obviously tell you something higher... if they do...give a lower offer...and look for a reaction.
if they say anything other than 'a higher bid has been put it, obviously they will take that one' , you know they are bs'n you
as long as you control the situation youll come out on top, dont let any agent take you for a ride
~Andrew
do not be "bluffed" by a agent to go to a higher price. do the numbers, find out what works for you and stick to it. if it works for you to go higher thats ok, but don't be pushed into something you don't feel comfortable with........there are to many deals to be found.......km
I can't comment on whether this agent is bluffing you or not about the other offer, but unless you are very sure about the comps you have AND your market is active (sellers market) this deal would be too thin for me. Also, are you planning on someone actually living in this property while it is being rehabbed? 600-700 for 6 months of insurance on this house is cheap in comparison to what I pay for the necessary coverages.
Dave
If this property will sell for $250,000 after rehab with $20,000 worth of work, I wouldn't pay more than $155,000 for it.
Well, this is coming from someone who hasn't ever done a rehab of my own. I am a wholesaler and these are the numbers that my rehabbers require to do a deal with me... Just an FYI...
Good Luck!
[addsig]
Fire damage can be expensive. In my area, I would have offered $150k. How long has it been on the market? If you get good deals like this often, then you can afford to have that as your final offer. The other offer may be lower.
The agent's "just got another offer, and need your very best" is the oldest trick in the REO game. I would bump it a very marginal amount, depending on what your actual max price is. And then I'd give them a "play it, counter it , or shove it". Expect the agent to come back with a _verbal_ "it looks like we can do this", if you're the best offer. And expect someone at the bank to take one more bite at the apple by saying, "some VP of toilet cleaning or something says that we have to get just a little more...." It's the usual crap. Don't fall for it, and DON'T get emotionally involved in the negotiations. I've definitely made that mistake before. And for heaven's sake NEVER tell ANY REALTOR (even your own) your bottom line price. You can bet that if you do, that's what you'll spend. No realtor is "on your side". Unless you are buying more houses than the bank is selling on a consistent basis - whose butt do you think that they are REALLY kissing??? Doesn't mean that they are inherently evil or anything, just human - they've gotta eat too...
-Jeff
I appreciate everyone's responses. Yes, i know this is a load of B.S with these counter offers. But how can I really know? Anyhow, i am not going to let them take me for a ride. I did do my numbers and there was a bit of a margin i could go higher, but not by that much..So I gave him my "best" price and now i am waiting to see what happens. I went to 182K from 175K. But i am not going any more..IT really is still a sellers market over here though...
Your offer sounds like it's too high, with too little of a margin to work with. But Good Luck if you are going to do it!
Let us know what happens!
[addsig]
Why would you up your offer to 182K from 175K? If you upped your offer, why didn't you offer 182K right from the beginning?
What are you going to do when they come back looking for more money from you since you are in play?
You should have stuck to your original offer and educated yourself.
Since you don't know what the market you are in is trully like, if the house sold at a higher offer to someone else or if you got the house at your original offer, at least then you would start gaining an understanding of your market. As of now you are still in the dark and will continue to be. You are going to have to lose a few to get educated.
Well, as it stands right now, my higher offer still got beat out, but not by much. At least thats what i am told by my REA. Was also told that the current bidder has a very tight deadline to get mortgage commitment otherwise contract will be void. So we are second in line to get this place and we should be hearing back from the selling agent in about 1 week or 2.
tassod -
It sounds like your offer at 182k is now off the table, since they have chosen to go with the other guy. Make SURE that you TAKE it off the table. Then when they come back to you (assuming that the other guy fell through), your offer is 175k. And don't budge. (more than maybe 500 or so to humor them...) Repeat after me, my offer is now off the table, my offer is now off the table.... <grin>
They bet on the wrong horse, they lose.... Banks are famous for making illogical moves like that.
jblackwell,
I actually just email my REA before reading your post telling him this exact thing. It will be intersting if they do come back to us what they will think..I will keep you posted!
You and I think alike
Jeeze, take it one better and offer them $170k if you end up in the drivers seat.