I believe his agent told him that my offer would not be accepted so why bother? But this is my guess. In the end of the day the agent has the duty to present to the home owner and the home owner makes the decision whether or not to present to the bank. In this case the home owner seems to think it is not worth the time. I will check back in a couple of weeks.
Dave - I am an agent… Maybe not a good agent, but an agent nonetheless… :O) I got my license to help me with my investing career…
jdias,
Someone once told me that in order for you to learn a lesson it must cost you $500. I guess that’s enough money lost to make an impression on long-term memory.
We have all made mistakes in offers, buying and selling. Welcome to the club.
I like the previous quote: “A confused mind always says ‘No’.”
You are doing something to get ahead. You are that one in a hundred and you will get there.
Furnishedowner
Uau… Thank you for the nice words and for the motivation… :O) Now I only need to close a deal…
Last night in the networking meeting there was a lady from one of the local REIA subgroups. She coordinates the Masters subgroup. As the other subgroups, they get together once a month. The thing that I liked about this subgroup in particular is that they meet at a local restaurant… :O) I asked if I could attend the meetings - she asked how many deals I had closed… None… She said she was sorry but the meeting is only for people that have closed 4+ deals… :O(
I have just sent her an email volunteering to help with whatever administrative task she needs help with. Maybe I will be able to attend the meetings… :O)
Anyway, thank you for the comment. Have a great evening.
One thing I’ve been seeing is that an agent advertises as a “short sale,” which may or may not mean “pre-foreclosure.” In other words, they just mean that the person is selling for less than they paid and/or less than they owe, but not necessarily, not always, a short sale requiring bank approval. To clarify, you could just ask the listing agent. If the bank must approve the short sale, then the agent is foolish for not trying very hard to convince the seller to present the offer to the bank (some sellers have some weird idea that if they are closer to the number they owe, that will look better on their credit in the end, but this is nonsense . . . they just need education).
But, again, the banks are holding strong on short sales, too. I have been told many times by listing agents, when representing buyers, that the banks are absolutely insisting on comps to justify the selling price. They are not interested in “giving” their houses away and they have not been playing the game long enough to have figured out that if they have not sold in 30 days, they probably need to reduce the price. Some banks have figured this out, and they just reduce every 30/45 days until they hit a magic number that brings out the first group of investors . . . and then they have multiple offers and you need luck + (very often) cash to entice them.
In general, I think any houses where the bank will control the deal are not great leads for investors, at least in my area. That being said, there are a few exceptions. IF a house has been listed a long time, in perhaps a further out neighborhood, OR a house that has been completely stripped and needs cash financing . . . there is a smaller pool of already small pool of buyers, so the banks may be willing to deal. I have seen this happen a couple of times, including my own purchase out of state last November (although not the type of deal you are seeking . . . but a damn good deal).
There is a house locally that we would love to purchase b/c it has been stripped. It is in a great neighborhood, houses nearby selling between 200-250K (non-lakeshore) and 400/500K (lakeshore) (same street). This house is listed for 137 K and just sits there. No cabinets, no a/c, no sinks, no vanities, nothing but walls. 4/2 w/2 car garage, 2500 square feet, 1/2 acre lot. Good size house & lot for the neighborhod. Fastest growing city in Orange County, Florida. But they need a cash buyer. I think an investor could swoop in and pick that up for something considerably less than 137K. We would make an offer ourselves but for the fact that we have another deal in the works and don’t want to screw with the conventional financing that we have lined up. Plus I’ve never used a HML and I’m kind of nervous about re-financing after the fact and/or relying on them to get money for repairs according to their rulebook.
Anyway, something like that house, sitting for a reason but still a good deal and/or the MINUTE a great deal becomes a phenomenal deal through a price drop, you make an offer that very same day. Or you could call every single short sale (talk to the agent) and get the scoop on what is happening. I found a short sale . . . very long story but I knew another house was being sold undervalue, was soon to be a comp, and the short sale house down the street couldn’t get offers. Her banker was willing to drop the house significantly if we presented the comp. She was willing to do the offer contingent on the comp happening. Basically, once you start to learn the “story” of all the short sales, you may find an opportunity, but some luck is definitely involved. You have to kiss a lot of short sale frogs, too . . . many people aren’t really short but they advertise as short just to get buyer interest (I’ve seen this twice this week).
I think somehow finding deals NOT on the MLS must be the way that real investors make money. I have yet to try my hand at that approach.
And we will be out of the game entirely if they eliminate no-doc loans this year . . . so I’m not sure if we can keep expanding our holdings.
I’m sure I’ve told you some things you already knew, since you are an agent, but I’ve been diligently looking for a house for LIVING for the last 3 months, going crazy in family rental, so I think I’ve got my finger pretty well on the pulse of bank-owned and short sales, at least in my market, so I thought a few tips might be helpful.
Anyway, good luck!
Tina
Not really - I have been an agent for 2 1/2 months only… :O) Your insight is very valuable and thank you for sharing it.
Good luck with your search.
So this afternoon I got my first counter… :O)
The listing agent sent me an email this afternoon stating that the bank was countering my offer at $58k (reduction of $8k from the asking price). My original offer was at $35.5k.
I checked one more time the ARV and sent a note to the agent stating that I could go as high as $37k. I have the feeling that a more experienced investor would probably be able to go higher than I. But I still want to be very conservative on my first transaction.
The interesting thing is that the agent reduced the asking price in the MLS to $54.5k. Not sure if I understand the logic behind this - the bank counters me at $58k and the same day it instructs the agent to lower the asking price to $54.5k. I can’t imagine why…
And as I was checking the tax records I found one property that sold for an investor in the same area (similar property). The investor bought it for $80k and got a short term mortgage for $89k. I am figuring that he financed between 80% and 90% of the purchase price + repairs with a private lender/HML. So using my assumptions, he put approximately 10k-20k into the rehab. He put the house back in the market 6 weeks later for $143k. The house has been sitting there for 49 days. There is no way he will sell it for 143k. According to my estimates the ARV is $97k-$100k. I will probably go visit this property tomorrow or Saturday. I am curious to see what he did.
Have a good evening!