Grounds Maintenance · Winston Salem, NC · Member since 2009 · 143 posts · 11 votes
Have a seller, who will accept my offer. My offer is at his price, which like most seller's is going to end up too high. The ARV being used by the seller is going to be high.
He asked for EMD. I said will $500.00 be enough? He responded to me with an email requesting $10K. Of course my offer would be based upon an Inspection Contingency,
10K is 4 % of what he wants. He wants me to write it out to his lawyer.
If I give it to him, I can tie the property up, but I think 10K is unreasonable a bit.
Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
12y
Why don't you do your due diligence upfront and submit a firm offer after that?
Sellers can detect weakness (your post is full of it) and when things sound weak they request you to "show strength" so you can put up or shut up.
If you are planning to negotiate him after the fact, I would look for a different Seller. If you can make money at this deal buy it and put the 10k deposit in and make some money.
In most cases EMD is 1-2% of purchase price. I have seen banks ask for 10K or more, but I usually counter that and they come down to 2K. Do you have an attorney? I would get one and make sure the seller's attorney is doing everything by the book. Just because the title say attorney does not make him legit or ethical for that matter. You need representation in the deal as well, unless you are comfortable.
Grounds Maintenance · Winston Salem, NC · Member since 2009 · 143 posts · 11 votes
12y
Yeah, I knew that 1% to 2% is normal here.
I need to find an Attorney near me. I was using a guy in Rockport. I only used him to come up with an specialized purchase offer. I may be able to still use him because we got all these techie things like scanners and faxes.
I called a few in my area, regarding this. Do you think, I was able to reach anyone? I would have liked to have someone review this tonight and get this property under contract.
I was going to submit offer for full price, but I knew that I would need him to come down. I have been looking at a few deals recently, and it seems EVERY seller and that means some other Investor's too, seems to come up with the artificially high ARV. When I start looking at the recently sold properties, they always seem to uncover the Seller's high ARV.
Grounds Maintenance · Winston Salem, NC · Member since 2009 · 143 posts · 11 votes
12y
I am working with someone who will buy with all cash. I would like to just find props that I can assign them to my recent partner's.
There offers include a lot of real estate commissions to sell. I do realize that selling by a broker has some advantages, I am wondering if the offers we can make can be competitive with the Real Estate Broker commissions always built in?
Grounds Maintenance · Winston Salem, NC · Member since 2009 · 143 posts · 11 votes
12y
Does anyone else offer at full price with an Inspection Contingency just to lock up the property and after the Inspection's and Estimates for repairs barter with the Seller.
I know that the more EMD you put down, the more serious people take you, but the 10K request is out-of-the ordinary. Incidentally; he called me about a half hour ago. I told him I would put up 2%. He said he would work with me, however now he has a buyer going to look at it.
In this game you need to get the property under contract fast, fast, fast, or elso "Goodbye." I had this seller saying that we were going to sign off on the contract tonight, but when he countered my EMD of $500.00 with $10,000.00, I hesitated for an hour and a half, and now I am behind someone else.
Would you offer full price, contingent on inspection? I know very well already that this seller's ARV is out-of-line with the area. I know that I will never want to buy at his price. I just was thinking of using this to tie up the property, and I might do this again and again. The one problem that comes to mind is that I could be tying up my money with every property I make an offer on. It's a pain, but the price we have to pay to play.
Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
12y
Why don't you do your due diligence upfront and submit a firm offer after that?
Sellers can detect weakness (your post is full of it) and when things sound weak they request you to "show strength" so you can put up or shut up.
If you are planning to negotiate him after the fact, I would look for a different Seller. If you can make money at this deal buy it and put the 10k deposit in and make some money.
Real Estate Investor · Encinitas, CA · Member since 2013 · 225 posts · 91 votes
12y
Does anyone else offer at full price with an Inspection Contingency just to lock up the property and after the Inspection's and Estimates for repairs barter with the Seller.
No. This is more somewhat more standard on multi family. But if I am going to buy a SFR then I am nto going to nickel and dime the seller. If the inspection throws something up then so be it by I am not planning on that.
In this game you need to get the property under contract fast, fast, fast, or elso "Goodbye."
Dont be a motivated buyer. There are always more houses available.
Would you offer full price, contingent on inspection?
Maybe.
I know very well already that this seller's ARV is out-of-line with the area.
Massachusetts, MA · Member since 2009 · 144 posts · 31 votes
12y
Unless you are friends with a home inspector, it sounds like an expensive way to submit an offer. 10 offers would cost what, 3 to 4 grand worth of inspections?
Are you out of state where you do not look at these?
Grounds Maintenance · Winston Salem, NC · Member since 2009 · 143 posts · 11 votes
12y
" In this case absolutely not." Unless you have the comparables and the area in front of you, as well as all the details of the transaction, why are making that statement, Mark?
The comps, I have already are showing a lower ARV. When I finish them, I am pretty certain by my info already, that the ARV will be inflated.
Real Estate Investor · Kansas City, MO · Member since 2012 · 397 posts · 187 votes
11y
We also routinely put down large EMD's in escrow ... even as much as $5-9k on a $30k house ... so long as I am in my inspection period, my money is safe. We operate based on speed, and the solid offer we have presented making it most desirable to the seller.