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Sticking With Your Offer Price...
During the last 10 minutes of my radio show last night I got started on a rant on the subject of knowing your offer price and STICKING WITH IT!
You can listen to that show here... .
The reason for the rant was a discussion I had with another investor who I have been helping on and off who lamented that the price she offered on a property was probably too high.
She indicated that she felt that when she made the offer it was too high, but the real estate agent suggested that if the offer wasn't at a certain number, the bank would not accept the deal. And of course the lender did accept the deal.
I have to admit that this is a very common mistake for a relatively new investor. They don't quite have the confidence they need to stick to their guns and too easily allow others, in many cases, real estate agents to talk them up from their original offer price.
The challenge now for this investor is to figure out how to get this deal assigned when the market has told her it is overpriced.
I wrote a blog post some time ago titled... "You Profit When You Buy." You can read that post here on Bigger Pockets... http://tinyurl.com/yzx3zvl.
Now with all of this information as background... here is the real message of this blog... listen closely as this is going to save you a lot of grief.
Do not under any circumstances allow others to tell you what to bid on your deals! You are the only one who can control the profit results of your deals, and if you let others participate in those decisions you are going to end up with deals that you would have been better off not even bidding on.
Here are a few tips to make sure you stay on your "game"...
1. If you have not developed purchase criteria for any deal you would make a bid on... stop what you are doing right now and develop those criteria.
2. You need to have a systematic way to determine your offer price. I talk to this in the radio show. Go listen to it and then make sure you develop the formula that works best for you.
3. Never, ever, ever, never... allow anyone... not even your rich uncle (well, OK if he is rich he may know more then you do) to talk you up from the offer price you determined is the right price for you based on the formula you developed in item 2 above.
4. Tatoo this one to your forhead... You do not have to have a deal! The more you thinnk you need a deal the higher your risk posture. Slow down, execute steps 1 and 2 and remember... some of the best deals you will ever do, will be the ones you didn't do!
And, I will leave you with this thought...
Our market today is still frought with many uncertainties. If you think for a minute that you can beat this market, get ahead of it, trick it or think for a minute it doesn't see what foolish action you are about to take... you are kidding yourself... and you will regret it.
Hey... now that I'm done with that rant... have fun taking down your next deal.
To Your Success...Pete
If you found this post to be of value, I would be honored if you passed it on to others who may benefit.
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Peter R, Giardini is the founder of The Club, Real Estate Mastermind a National Real Estate Investor Coaching program whose philosophy is that real estate investing coaching/ mentoring can only be provided by experenced "local" coaches in a one-on-one environment. To find out more about The Club visit or send an email to . To learn more about Pete visit www.theclubteam.com/about.asp.
You can listen in and participate in Pete's Real Estate Investors' Mastermind radio show every Thursday night at 11:00PM on BlogTalkRadio... . Copyright 2009. All rights reserved.
Comments (11)
I tried to refresh at the time I first saw it, and it happened again (sorry - before I saw your request to take a screenshot). Now it's working fine.
Edward Pluchar, over 14 years ago
Edward - Can you take a screenshot of the page if that happens again? Try to referesh the page and see if that helps.
Joshua Dorkin, over 14 years ago
Josh... thanks for the feedback.
Peter Giardini, over 14 years ago
Edward... I have had this problem from time to time also... I am able to refresh and get to the everything to appear as it should. Hope this works. Pete
Peter Giardini, over 14 years ago
Unfortunately, it appears the computer code (or something) is out of whack on this page. Some text is superimposed over the main body of the blog, and even the blog looks like it's written out in HTML. Any ideas?
Edward Pluchar, over 14 years ago
Peter - You're the man, in case I haven't told you that before, lol. Of course, that's why you're a contributor on our Official BiggerPockets Blog. Articles like this one show why you're a successful coach and mentor for real estate investors. Keep sharing the great tips for all to profit from!
Joshua Dorkin, over 14 years ago
You are so correct, keep emotions out of your purchase decisions is the only way to have long term success
Michael Zuber, over 14 years ago
Thanx for the comments... Sticking with the fundamentals like having criteria and a purchase formula will keep the emotions out of the deal and increase your profits.
Peter Giardini, over 14 years ago
Thanks for sharing your great thought here on BP. As I am also working in <a href="http://www.georgiahomepeddler.com/">GA real estate</a> industry for few years so I can safely recommend people to following your great advice because it is important at first place to determine the right price and then it is also equally important to stick on your decided price.
Hunter Ramsey, over 14 years ago
I love this message, specifically point 1 develop your purchase criteria. The only one wrinkle I would add to this post is I develop my purchase number and subtract 5K. I use this 5K as my only tool to negotiate should I find a seller who wants to make a deal but feels they need to counter a time or two. But no agent, bank, auction, etc will get me to adjust my number because at the end of the day I will be stuck with the asset should it not work out. Great Post
Michael Zuber, over 14 years ago
Blog on, or should I say rant on as I am stuck with you, price wise.
Jim Wineinger, over 14 years ago