All Forum Posts by: Lee Self

@Cara Lonsdale Yes, I told my realtor that I wanted to get it for either that $45k with concessions or $42k without concessions.

@Mike H. I suppose the worst thing they can do is turn down the offer right?

I should also say that I won't be devastated if this doesn't work out. I wasn't intending on making my first deal just yet because I only have about $10k in the bank for this right now, but this property happened to come up at an attractive price. So if I put in a lower offer and it's rejected, it will just put me back on my original track of waiting a few more months to build up more cash. I'm currently saving at a rate of about $4k a month.

Yeah, that's why I'm so surprised the seller is selling the property after only owning it for six months. The loss of transaction costs alone seems like a steep price to pay because she decided to live elsewhere. It has me a bit nervous that I'm missing some problem.

In practice, how do you include the consideration of the seller's loss into determining your calculation? From where I'm sitting, she could be in a hurry to sell it for some reason and so is willing to entertain lower offers, or she could be devastated by any big loss and needs to get a particular price for it. I'm not sure how to gauge those realistic expectations as I prepare my first offer.

@Russell Brazil Thank you for the response! Most of my concern with the $45k vs $50k is the down payment, as that's a $1,000 difference at close. Again, not a large amount for most people, but I'm trying to squeeze out every penny I can to maximize both my return and the size of my portfolio. 

Could you expand a bit on that last statement? About having realistic expectations for how much a seller can lose. Thanks!

So to summarize, most of you view your realtor as the person who lets you into potential units, puts in your offers, and checks the boxes/oversees the closing of the transaction? This will help me keep my expectations realistic in the future.

Thank you again to all of you taking the time out of your day to provide me with this information.

@Mike H. I definitely appreciate the advice of being self-sufficient. I just want to clarify again that I have no desire for my realtor to come up with or approve of what I feel is the logical purchase price. However, I feel that he should be able to advise me on where to start negotiation once I tell him what I'd like to get it for. Further, if I tell him what I want to get a property for and he tells me I am way unrealistic with it, then it probably isn't the right property for me and I would move on to another potential deal. I know that isn't as self-sufficient as it should be, but this is also my very first deal I've ever done and I would have more faith in his opinion of what is realistic than mine. To re-iterate, I wouldn't change my offer to what he tells me or thinks is reasonable. I determine that based on my own criteria. But if what I need to get a property for isn't in the realm of possibility, then I don't want to waste time on that property.

I'm not sure what this agent's experience is in working with investors. I do know that he owns several rental properties of his own.

I think where I feel most adrift at the moment is deciding where to come in on that very first offer. It's a high rise studio condo that was bought by the current owner last May for $50k. When we asked why she was selling it so soon, we were told she bought it for herself but decided to live elsewhere. It was listed a month ago for $54k and the price was lowered to $49k two weeks ago. Based on comps, we believe it to be worth $45k. The most I really want to pay for it is $45k with seller paying for closing and HOA transfer costs.

But given that information, I'm not sure where to start. It's apparent to me that for whatever reason, the current owner bought a condo that she quickly decided she didn't want anymore. The fact that the price was reduced 10% in the first two weeks seems to show some urgency to sell? I should point out that almost all listings that have sold in this high rise building have sat on the market for at least 20-30 days before selling.

@Colleen F. A good point on picking up the phone. I was just thinking that by email, it allows him to respond at his convenience. It is difficult to discuss more elaborate concepts by email though. I also hadn't considered that his focus on higher price points might mean that he lacks the insight for these particular areas.

@Jay Hinrichs I do not know how to handle escrow. That would be an answer to the question of what he brings to the table.

For the record, I wasn't asking "what does he bring to the table" out of exasperation or that I think he's completely useless. It's just that I haven't gotten any value from it SO FAR and am legitimately and honestly asking "what does he bring to the table". The mention of escrow is very helpful and a fair point, as I can't do that on my own although I imagine my attorney could perhaps walk me through all of this. God knows what he would charge, though. 

I think the final answer to my question is that, at the price point for this particular deal, there might not be much use in getting a realtor beyond handling the legalities of the transaction. 

Thanks everybody for the input.

@Jay Hinrichs I think my goal in posting this was to determine if I should've skipped having a realtor altogether, as you suggest in your last paragraph. As far "wasting my friend or realtors time", I came to him for a referral. I told him the price point, and made it clear that I understood that it might be below his interest level, so to speak. He told me that was nonsense and he would take it himself. 

I understand that $1,400 doesn't mean much to you. It does to me, especially if the person receiving it contributed nothing meaningful to the deal. If that's such pocket change to this guy that it doesn't warrant him contributing beyond what I can do myself, he was free to express that and leave the $1,400 on the table.