I’ve read a few posts on here that discuss bringing your purchase and sale agreements with you when you go look at the property and meet with the sellers. And I’ve read other posts that say to make offers on several properties and eventually one will get accepted.
My question is whether the wholesalers out there always go check out the property before they make offers or if they ever make offers sight unseen. I know it’s a numbers game, and the idea of going to every property before making an offer is quite daunting.
However, if you do make an offer sight unseen, how do you incorporate potential repairs needed to make the deal work for the end buyer?
Wholesaling you will find properties from a lot of different sources, REO's, Foreclosure Auctions, Lender Disposal Auctions like REDC, MLS listings (Well below FMV), owners of properties in distress like divorce, inheritance, illness, emergencies, paying for college educations, down sizing and can't sell, being transfered, etc.
I have always kept a contract or two in my bag and all the required accessories to write an offer, I do not go out and see properties being marketed by owner at FMV as these people have a retail mind set and are not going to go for my low offer, I like sellers who call me either by referal or because they saw my ad because they have a desire to sell for cash now “I Buy Homes-All Cash-Any Condition-Can Close Quickly” and generally expect a low all cash offer as they realize it’s a business and we make money by reselling and marketing there unwanted real estate!
I make offers blind (Without seeing the property) but it takes really getting out and seeing hundreds of homes and really getting a feel of what’s out there, the average condition and gain perspective on effectively estimating repairs or projecting repairs based on the “Comments” section in the MLS listing!
If my realtor calls and say’s “Hey, we got so and so accepted” I have a few hours to about one day to actually get out and see the property and really define whether my offered price is reasonable? If it’s off could I reasonable renegotiate the price based on unknown damages or whether I have to drop it and walk away!
My disposition is based on area, if 7 or 8 out of 10 properties in an area have required paint and carpet, all my offers have deducted for paint and carpet in that area, I also pay close attention to the comments section of a listing and I have a few questions I have my realtor ask when they call to see if the property is still available! Which is then relayed to me on the phone so if necessary I can modify my offer!
Thanks!!! That really helps a lot.
I always make offers without seeing the property first for just the reason you point out, it would take forever to go look at a property, and then make an offer to see if the seller can make me a deal. Especially with the large number of sellers we talk to on a weekly basis.
Ask me how I know this???
So, how do I avoid running into trouble - I ask the seller how much in repairs are needed on the house and use their number. If we then get the property under contract, I go look at the house (or better yet, get one of my buyers to go look at it) and if the repairs will be more than they estimated, we change the contract - no big deal…
Much more efficient…
I have a slightly different twist. While I agree it’s not efficient going out looking at a zillion houses before you know if there’s even a deal, what I do is this: I don’t actually make them an offer, I get them to make it to me…just to find out if we’re even on the same planet. Once I know it’s a potential wholesale deal based on the stated condition of the house, equity, seller motivation, etc I just ask them what’s the least they’ll take if I paid all cash and closed quickly. If that number is anywhere near retail price I know it’s probably no need in wasting the gas. If they are at say, 70% of retail value or less then I know I have a potential deal. I then set the appointment and nail down a final price, based on the actual condition of the house.
OK Gold River
Do you mean got it accepted, or do you really mean got it excepted. If the latter
what does it mean, some kind of slang I’m not familiar with?
I always ask the home owners what the repairs are. Then, I pull up comps and see what the lowest sold comp was. My initial offer to the home owner is always at least $7000 lower than the lowest sold comp. If you’re not ashamed of your first offer, then it’s probably a little too high.
Most of the times, a home owner will say something like, " Are you crazy? The least I can take is $20,000." Guess what? You got that information out of them at least. of that number is close to a wholesale price, I will usually tie it up contingent to partner’s and/or final inspection.