Offering low on a property that's been listed for a while

[Laurie Falk]

I'm looking to find my first investment property in the Richmond, VA area but kind of at a loss on where to start. I've heard a lot of podcasts and read a lot about sending out post cards and going to the courts to find the opportunities, but I'm not sure that's the greatest choice since I'm not in the position to pay all cash yet.

There are a handful of houses that have been on the MLS for quite a few months, some that look like they're being sold by owners, but some by the bank. Is there any value in looking at these and making low-ball offers? A price that may be more realistic to the market, area, or what the house needs, not low just to offer low. Would it be easier to go after the bank-owned or the person-owned? I've seen a lot about not insulting the seller with low offers, but should I even be concerned about that? I don't know these people and if they say no and don't make a counter, I can move on to another house.

[Jon Deavers]

You should be careful calling any area bad. May not be understood but "bad" is a dangerous term that can get you into some fair housing issues pretty quickly when you're advertising for potential tenants. If it's truly a bad area for your (consistent) criteria then you shouldn't buy there regardless of price point.

The advice here has been fairly on point, you shouldn't bid emotionally. However, completely disregarding the feelings of the seller is bad business. You need to be able to educate whoever is representing the seller on why your offer is low. And the numbers should justify the offer regardless of how low it is. In order for the deal to work, especially with individual sellers not REO's, both sides need to feel like they're getting a fair deal.

Keep in mind, these may be emotionless business transactions to you but you're buying people's homes and there is a lot of sentimentality attached to that. Throwing out an offer below market value (especially in a hot market) is insulting unless you can present it in a way that makes them comfortable with your plans for the property.