All Forum Posts by: Arthur J. Encinas

@Jennifer Brown

You mentioned the 70% rule.  Another rule that I also go buy is what I call The ARC, that's not the name but I coined it for myself as that's how I remember it.  This breaks it down and it's very detailed.  I got this from an article by a gentleman by the name of Jorge (I don't recall the last name).

(ARV - Repairs - Closing costs - My profits = OFFER)

Hope that helps.

@Greg Scott @Melissa Kirchhoff

Greg, the reason I mentioned putting a lower offer after inspecting the house it because you mentioned it in an earlier post; however, I believe what you meant by the deal not boxing is to only offer the lower offer if you didn't know about all the damage to the house, which I'm guessing would be to put offer on property without seeing it.  If you know of all the damage initially then put an offer reflecting that and only put in lower offer if the inspection found 'new' damage.  This is why it's so important to have that contingency on inspection (which could be anything that's damaging).  Thank you for clarifying that Sir.

Melissa, it's a good idea about asking for a credit if any 'surprise' comes along. TY. Regarding the property, I'll be sending my father and my rehab guy to look at it and send me pictures and giving me an idea on how property looks.  By what the agent mentioned, it looks like they were or were stealing the copper coil in the house, if that's the case I will offer a low offer but a little higher then the other offers (hence, why I had agent represent me), and worse case I would get a bid on using pex pipe.

We will see.

@Greg Scott

Mr. Scott, at you saying working backwards from best offer to lowest?  This is interesting....

Put an offer that will get accepted with the contingency inspection you mentioned, and then put offer stating " the inspection failed and I have a lower offer than the 1st one and here's why?" Being that inspection failed, I have that legal right to go lower correct and know they won't stop negotiating with me.. Something like that?

  I just found out by listing agent house has been vandalized and there are many punch holes in dry wall, cabinets have been taken out, electrical wiring has been pulled out and they even tried opening ceiling (not sure how that looks). Bathroom is tore up and laminate flooring.  Agent is not sure if copper has been removed? 

There has been a couple of lowball offers that the bank is counter offering now. 

I'm thinking of either lowballing to $35k on a $62k listing and negotiate (I have listing agent representing me) or go with your (unorthodox approach) and put in offer at about 10% of listing price $55k with contingency on inspection, get approved and then when inspection comes back present new offer of $35K-40K. Knowing this information would you utilize same tactic you mentioned or change it somehow? 

Thank you Sir.

@Melissa Kirchhoff You said it perfectly, thank you.  It's listed for $62,500 and I'm thinking of putting an offer for $47k which is about 25% of current listing.  After all the counters, I'll probably be putting best and last at $55k (10%) less of LP. 

As far as the dual agency commission, yes it does make sense (to forgo my commission) and have that relationship for future deals.  I actually just notified her that she will represent me and have made an apt to see home with a rehab guy.

Melissa, you mentioned the condition. I figured there was something there being REO in this market for over 2 months, She told me that there are holes in drywall, cabinets are torn out, electrical wiring is pulled out. They were trying to pull up ceiling (for some reason). Bathroom is tore up along with laminate flooring. I asked about any copper thief and she said they 'were' trying to pull out (Inspector highly needed).

I asked about # of offers and there's a couple but bank has countered because they are so low so I need to move on this fast.

Thanks again.

@Brent Coombs from the bank, you're right doesn't make a difference but like Greg mentions-the realtor COULD find 'ways' to double dip or has their buyer's list available, and the buyer would be the one getting stiffed.

Thank you Greg. Yes even though buyer's agent can request pg 9 on contract to verify seller saw offer and signed it...I'm sure it's still a huge advantage having the listing agent represent you and I say this as an agent myself not getting paid on deal but will be getting compensated for the investment-it just makes more sense that way.

@Brent Coombs, yes Brent it will go through the listing agent. I've heard many 'tales' of having listing agent also be YOUR buyer's agent on a REO to benefit you more other than going through another agent.

I hope this clears my last question?

Hello Chris,

Thanks for the info man. As a lender what would you recommend the wording and terms to be on putting an offer on a REO. For example the inspection contingency, appraisal contingency, # of days for inspection to be less then 14 days, etc.,

As for the offer itself...Putting an offer 10-20% less than the listing price?  Putting a 10-15% earnest deposit down to let lender know you're serious?  What are your thoughts?

Thank you Chris.