Hi all! Very new to this RE game, but anyway, there’s a potential deal I’m looking to pursue.
Been driving around & found this house which is very near a university, but in shocking condition. I’ve obtained the owner’s details & plan to send him a letter asking if he’d like to sell. I would then do a rehab & either on-sell it, or live in it (I’m currently renting) & access the extra equity to facilitate more deals. Questions:
1. The block was subdivided (2 adjoining houses), so should I go in and make an offer for both properties?
2. The owner is actually a company, so I figured that if the guy’s gone to the trouble of setting up a legal entity, he’s not that dumb afterall, so this may pose as a problem? I figured he may not be as ignorant as I hoped with regards to market value etc.
3. This is the hardest bit. How should I word the letter? A casual letter or a formal document stating my intentions?
Thanx for any inputs!
WeiSteve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763
Interesting deal… I think you are right to consider your likely success being linked to the seller’s motivation.
You know what I’d do..?..
In this case I wouldn’t worry about doing the legwork yourself – I’d approach an agent in the area and express your interest in buying the property and get hi/her to do the legwork to approach them and gauge the interest.
Remember, the seller pays the commission, so you haven’t lost anything and yuo are also leveraging your time.
Reminds me of what an old manager of mine said… “when in doubt, delegate!”
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
Success comes from doing things differently
Appreciate the reply, Steve!
The problem with approaching an agent (I think) is that it’s more than likely the agent will advise the owner with regards to price, which will get his hopes up. I want to avoid this, and of course, the agent’s fees is ultimately reflected in the final sale price.
I was interested in another property which was in a much sorrier state. The place stinks (I’d bet 9 out of 10 won’t walk in!), but the owner was firm on his $280k price because the agents have led him to believe that’s the price he’d get in order to secure his listing.
Comparable houses in the area are indeed in that range, but no one in their right mind would offer anything close to $280k. I tried at ~$200k, but was told by the agent that he’s knocked back much higher offers…
I have decided now I’m going to write (conditional) offers on whatever property that interests me remotely. I’d appreciate any further input with regards to the best way to approach this? Thanx!
OK was just done talking to an agent, and he refused to submit an offer I made on another property. Is it their obligation to submit all offers? I believe it is, but there’s no way to find out if they really went about doing it, is there?
The guy thought my offer was far too low. True, but it’s been on the market for 6-8 weeks & according to the agent, the vendor seemed pretty keen. I thought, hey, no harm trying!
Anyone else ever face a similar problem?
WeiCYMember@cyJoin Date: 2002Post Count: 7
Yes agent has the obligation to submit an offer. However I recall in the Sydney hot market months ago most properties will sell within 5-8k (for 250k) of asking price. That time most agent was quite arrogant, ie “I don’t want you” type of attitude coz they easily find another 10 buyer lining up to buy the properties. Hence they really don’t want to lose their face to the vendor by submitting 20-30k below asking price.
I’m not sure how hot the market is atm. But I think what you did is great, 1 out of 8 could be a good agent. Also, 1 out of 25 of your offers could be accepted. Keep trying .
I was bordering on being unreasonable- offering high $30s for a $55k property. But hey, you’d never know, you may get lucky! I figured all I had to lose was a phone call and a few minutes of my time.
This is actually part of my exit strategy. It’s currently rented at $85 per week, so $50k asking price is high. I’d like to wrap it ultimately, so if I do score it for say $40k, I can use a buy & hold as an exit strategy if I can’t wrap it successfully. That way it still cash flows marginally.
Is there a standard letter that people write to submit an offer? What I’ve been told by agents is that they have a standard form or something, but I am concerned by the lack of exit clauses, so I’d like to tailor one to my own needs. Basically I want to get those offers out the door by the tens/hundreds every weekend, with an escape clause.
That way, I can spend time to analyse the small percentage that gets accepted rather than waste my time analysing all of them & submitting offers on a few. What do you guys think? Thanx!
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