Hi all!
I've done some searching, but haven't found something akin to "The Idiot's Guide to Presenting Your Own Offer."
I've only ever purchased/sold property using a realtor. So, if I am looking at a FSBO property for a buy-and-hold portfolio, I go to my attorney and we construct a contract.
Then, how does it get presented? Do I walk over to the owner and hand it to him? Do I mail it? Do I verbally discuss my offer with him beforehand?
I'd obviously like to have the offer presented in the way that will maximize the chance of success, so how is it done?
I know if my offer is "so low as to be insulting" the seller is obviously not motivated enough (yet!) - so how do I couch a low-ball offer to him in a non-adversarial way? Do I let him know how I came up with such a low offer? Do I provide documentation?
How is it done?
Thanks for your collective wisdom!
Excellent question Wesley,
This is how I have been approaching buying and selling real estate of all types for almost 50 years. I NEVER work with a real estate agents for numerous reasons. I have been very successfully investing, managing, and selling my own properties since the 1970s.
When working with a seller, remember, the seller has an emotional attachment to the property. This is their baby. If you are offering less than they feel the property is worth, you are saying their baby is not as special to you.
Brush up on negotiating skills. This is critical in all aspects of the real estate business. Buy several books and audio media. Become an expert at negotiation.
Embrace what your seller believes. Understand. Walk a mile in their shoes. Shut Up and Listen closely to every word and the emotion behind the words.
Then offer a solution. Your solution may be less money than was desired, but you plan to take very good care of the seller’s baby, give it a new coat of paint, and ... You plan to enhance, not change, enhance the seller’s baby.
Get the seller to appreciate your position and even embrace your thoughts. Now, the seller wants you to buy the property - even if it is for less money.
This is just one way to approach the opportunity. Make it an opportunity for both parties and you will be successful. Win-Win.
The opposite is true when selling. Be a problem solver - not a buyer or seller.
even as a realtor we are "taught" to present offers in person (not that anyone really does it with the new internet technology)
it's easier to just email it over.
You can do a verbal offer, see where they are at... and then a written.
Excellent question Wesley,
This is how I have been approaching buying and selling real estate of all types for almost 50 years. I NEVER work with a real estate agents for numerous reasons. I have been very successfully investing, managing, and selling my own properties since the 1970s.
When working with a seller, remember, the seller has an emotional attachment to the property. This is their baby. If you are offering less than they feel the property is worth, you are saying their baby is not as special to you.
Brush up on negotiating skills. This is critical in all aspects of the real estate business. Buy several books and audio media. Become an expert at negotiation.
Embrace what your seller believes. Understand. Walk a mile in their shoes. Shut Up and Listen closely to every word and the emotion behind the words.
Then offer a solution. Your solution may be less money than was desired, but you plan to take very good care of the seller’s baby, give it a new coat of paint, and ... You plan to enhance, not change, enhance the seller’s baby.
Get the seller to appreciate your position and even embrace your thoughts. Now, the seller wants you to buy the property - even if it is for less money.
This is just one way to approach the opportunity. Make it an opportunity for both parties and you will be successful. Win-Win.
The opposite is true when selling. Be a problem solver - not a buyer or seller.
Having been a FSBO and walked in those shoes, I can share my brief experience. I put my house on the market and tried to be as realtor friendly as possible, advertising a full 3% buyer's agent commission, having a lock box on the door, and doing my best to be prompt and courteous. The first offer I received seemed like a long drawn out ordeal. It had something to do with the buyer not having the 3% down and wanting to use some charity, that I would pay the 3% and they would then gift it to her. It was odd, but I told the guy I would work with them as long as the bottom line added up. The asking price was $155,000 I spent several times on the phone with the realtor with him promising me a good offer that I would like and thanking me for working with the 3% thing. yada yada yada. Offer comes in via email, it was somewhere are $120,000 plus the 3% off. I just called him back, I tried to be polite and ask him what happen to the offer. He told me the bank lowered the amount the buyer was approved for, so I didn't even bother with a counter. I just told him if things change, let me know.
The second offer was much smoother. A realtor goes out and shows the house. I get a call in a few days she says she will be submitting an offer, I say thank you. Offer comes in via email again. $150k +3% towards closing. I sign it and send it back. About 45 days later we sign papers and shake hands.
To bluntly answer your question. I didn't care how the offer actually got to me. I only cared about the numbers. Selling FSBO is an emotional thing, there is a lot of sweat, blood and tears involved. But there is also a reality check. The reputation that FSBO's have is they have no clue about the market and they are asking too much money and are inflexible. That may be true for a few, but I think for the most part, FSBO's have a realistic expectation of the market and want/need to save the 3%.
In my case, I was absolutely broke, and struggling to get out of debt. The $4,500 I save by going FSBO really helped me. If you are just honest and upfront, tell them you are an investor and while your offer might not be full retail value, it will be a quick transaction.