So you’ve got leads flowing like the Colorado River at springtime, but if you’re not presenting offers, and more importantly, having those offers accepted, you’re doing a lot of work and still NOT buying a house. There’s still work to be done.
First, you must do these four things before you even consider asking for a signature.
- Deal directly with the decision maker. If the person you’re talking to isn’t the one signing the dotted line, they can’t help you.
- Only pursue opportunities where the seller needs to sell. None of this, ‘Ho hum, I’m just testing the water to see if I may want to sell’. Don’t waste your time on unmotivated sellers.
- Know your market. This is beyond important. If houses in the area are selling for 95% of asking price, your offer at 50 cents on the dollar is going straight to the trash. Know what’s happening in your area; then you can strategize around it.
- Accurately determine the property value. It is imperative you get this right.
Let’s talk a little bit about determining value, since it is the most important step when crafting your offer with the intent of buying a house.
One word: COMPS (short for ‘comparable sales’)
You need accurate, recent, apples to apples comps.
Your best resource for comps will be the MLS. If you’re not an agent, or a broker, or have a bosom buddy who will gift you MLS access then you’d better track down an open-minded Realtor and draft them to your team.
However, if MLS access is not an option at this moment, don’t despair. There are loads of websites that provide basic comparable information.
When you’ve determined your 5 lowest comps (same area and relatively same square footage +/- 15%) that have actually SOLD in the last 90-120 days, depending on your market, then head over to epicanalyzer.com. I’ve created this simple deal analyzer to help you quickly determine your maximum allowable offer.
- If you’re fixing and flipping choose that button at the top.
- If the property is a buy and hold prospect, use that analyzer.
These are tools to help you arrive at the maximum price you can offer and still meet your profit goal.
Now you’re in the decision position. Does that number, based on the conversations you’ve had with the seller, seem to be in the vicinity of a reasonable offer (No super powers required here. Use your gut instinct.)?
If so, it’s time to PRESENT AND GET CONSENT.
Want to be successful? Adhere to these tips when buying a house.
- Insist on meeting in person. True, it’s tempting to email or fax a contract, but if it’s at all feasible, meet the seller in a neutral location or at the property itself. You’ll be amazed what a little eye contact will do for your offer.
- Position yourself on the same side as the seller. It’s you and the seller versus the world, or rather the market. But you want them to feel like you’re on their side, which you are. At this point the seller will either consent (congrats you’re in contract), reject, or counter.
- If they reject: Resubmit an offer or move on. It’s up to you.
- If they counter: You must counter back. Don’t let the ball bounce twice in your court. Don’t make the mistake of taking a counter offer personally, and don’t for a second believe the counter is the seller’s final position.
- Always counter back. Even if it’s the same offer you presented originally.
- Counter back until they sign on the line that is dotted (thanks Glengarry Glen Ross) or until you get a firm no.
Lastly, if you should get a firm no, put them in your calendar to follow up with in a few weeks. If they haven’t sold by then, they might feel a little kinder towards your offer.
Hot Tip! If the last word from your Seller is a “No” or “I’ll think about it,” be sure to leave your offer behind. If they refuse to take your Offer, mail it to them. Should the Seller have a change of heart (of which they OFTEN do), they are going to call the Buyer that left the written Offer behind.
No is not necessarily no, it’s just no for right now.
Now, go write some contracts and start buying some houses.