How to Sniff out a “Deal” in today’s tight Marketplace

By Fred Myer

   Where are all the deals? How to sniff out a deal is a question I am getting asked more and more everyday as our market tightens.

The answer to that question is somewhat complicated, because what is a “deal” can be different from one person to another. But what I want to speak to today is the fact that when you approach a property or a deal you have to dig, this is absolutely necessary because deals are not always advertised, they are discovered through due diligence and negotiations. This due diligence can help you to find out about things like divorce, notes coming due, issues with the property (that are fixable), seller having personal issues that are forcing the sale, like a job transfer, job loss, or health issues.

So as I look out into the market place I see that a lot of deal making in our local Reno/Sparks market is done by agents, or well-connected individuals within our community. For example I finished out my day yesterday getting a phone call from an agent that I had an LOI (Letter of Intent) out with. He called to inform me that our LOI was outbid, so the problem that creates is that my client is in a 1031 exchange with his sell side already completed, which means his time to ID a replacement property (45 days) from close of escrow was already ticking, so I called the people in my wide circle. This very morning I get a call back from a good friend to tell me about a number of unlisted properties that could solve his problem. With that call came some information regarding one of the sellers that had a problem, a large problem consisting of him having a note coming due in 45 days. That information was found out through a due diligence period that turned over some rocks to discover the sellers problem, and that is where a deal can be negotiated, when you discover a seller problem that a quick sale will solve. I will also mention that buyers can have problems that sellers can take advantage of as well.

Fred Myer