How much info do you require to make an offer?

Question

Hello BP!

Iv been working with a great agent. He's been very patient with me. I think im doing the normal newbie thing and asking way to many questions for each property, offering lower than list, getting told no and wasting everyones and my time. He mentioned this to me himself.

I dont want to be difficult to work with and want this to be a good long term relationship. What is some key info you would ask your agent prior to making an offer?

Im looking to BRRR from a distance. Plan on flying down regularly. I dont want to over pay for the property. Some info I feel I need is:

-Sales comps/ opinion of ARV

-rough rehab estimates (before getting a contractor to quote)

Prior I was asking:

-why is the seller selling ?

-Neighbourhood grade ( agent gave me a map to find this for myself)

-rent comps ( agent just uses rentometer, made an account myself) -cosmetic or structural repairs ? -any neighbourhood specific info ? (Vacancy, crime, appreciation, school zone )

I found this info on redfin, although I dont know how accurate it is

Kevin Sobilo · Answer

@Gurjot Grewal, all of those pieces of info are good but how many properties are you asking the agent to provide info about? and what level of interest do you have before asking for these items?

Sales Comps and ARV: I recommend you start with your own estimate of these and then if those make sense after you run numbers, THEN you ask your agent for comps and their opinion of the ARV as a double check. This way you don't ask for this often and only when needed.

Rough Rehab Estimates: That would be something YOU generate not your agent.

Why is the seller selling?: Most times the agent cannot answer this. If they are the listing agent then it could be breaking their confidence to reveal that. If they are only your buyer's agent likely they don't know. You can ask if they know but don't expect you'll always get an answer.

Neighborhood Grade: You have a GOOD agent! They should not answer this. Agents are taught to refer you to an objective resource for information like this. An agent could get themselves in trouble by characterizing a neighborhood for a variety of discriminatory related reasons. It may sound silly to you, but your agent did exactly what they were taught.

Rental Comps: Using a source is solid, unless they are themselves an agent and can provide deeper insight maybe.

Cosmetic or Structural Repairs?: An agent will point out material defects disclosed by the seller and also anything they see themselves, but beyond that its YOUR responsibility to do your own due diligence.

Neighborhood Info: Same as neighborhood grade.

Kevin Sobilo · Answer

Again, how would anyone besides YOU know the scope of work?!? You have to develop that yourself. The listing agent will not try to provide that.

You should be able to narrow your focus and be making SERIOUS offers on maybe every 3 or 5 houses. If your agent can do a few showings in a row that isn't much time for them to invest.

If you look at 50 interesting listings and narrow that down to 15 by doing some research and estimates based on info you can find from old listings, google street views, etc etc etc etc. Then your agent spends maybe 10 hours doing those 15 walk thrus with you. You make some casual oral offers but really focus in on 3 properties that you make serious offers and negotiate on then your agent might have 15-25 hours invested to get a house under contract for you which is very reasonable.

Herly C. · Answer

@Gurjot Grewal simply to add a little to what everyone already said. Keep in mind, an agent doesn't make a dime throughout this entire process unless you go under contract and actually buy a property and they get pay through commission.

All of this leg work being asked of them and providing you information is great. But at some point in time, it does become a waste of their time. You are new and a lot of this information won't jumpt out at you and it does sound like they're doing their best to provide you sources, but most of this information you best find on your own to analyze if a deal make sense.

Some of the information such as estimating repairs, unless you're a professional contractor, or have been doing this for a long time, it's hard to estimate without a professional. And I'm sure it's been said, but you can't get an inspector or contractor in the house to go through the details before being under contract.

So, it's tough starting out. But keep at it while also keeping in mind everyone's time and energy. Good luck on your journey.

Kevin Sobilo · Answer

@Gurjot Grewal, most people walk-thru the property before making offers unless there is no access or maybe they assume a full gut rehab.

Eliott Elias · Answer

Sales comps, that's all. If the value and price is low enough I will buy it

Bruce Woodruff · Answer

@Kevin Sobilo is right. You are asking way too much of this agent. And you certainly do need to develop  your own SOW...how can anyone else know what you want to do to a property....?

Try to learn more (maybe on this forum :-) so you can take up some of the slack and do what a buyer is really supposed to do...

Gurjot Grewal · Answer

@Kevin Sobilo  Understood! Thank you for this virtual conversation. It has been extremely helpful! Will be changing my approach based off what we talked about.

Kevin Sobilo · Answer

@Gurjot Grewal, I can see why your agent balked. Thats a lot of work for them. At that level of work even if you buy a property using them they could make less than minimum wage for their time! This is why they are frustrated.

If you are making offers unlikely to be accepted, I suggest asking the agent to just tell the listing agent your offer orally and ask if its worth putting in writing. That could save your agent a lot of wasted time putting together contracts that have no chance of being signed.

How would the listing agent know what rehab you would choose to do? I can bring to you 3 experienced investors and each would do a different kind of rehab. That is something you have to do yourself.

Have your agent walk through the property and facetime you so you can see the property. They can zoom in to show you details of interest. Maybe find a local partner who can go in person or even a handyman you develop a long term relationship with. Try to set up multiple showings back to back and pay the handyman for their time. They can tell you more specifically the work that needs to be done.

Nick Coons · Answer

@Gurjot Grewal

Side note, don't worry about if you're "overpaying". Either the numbers work for you or they don't. You might have one property that you must pay over-market for but it's a perfect fit for your buy box. Or you might find one under-market and the numbers are still no good.

Whether it works for you and the numbers are right should determine if the purchase price is acceptable.

Curtis Mears · Answer

@Gurjot Grewal

I would disagree with this. An agent does not necessarily know rehab costs and the listing agent is in the same boat. What if the agent gives an incorrect assessment? Are they responsible then? Either you or a gc can make the estimate. The agent can maybe give a general feel for the property. Maybe you need to find a partner in the area so they can look at the property.

Personally, I would be very nervous as a first time buyer buying without seeing the property.

How much info do you require to make an offer?

Most Popular Reply