Making Offers On Investment Property | Real Estate Investing Tips
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Making Offers On Investment Property | Real Estate Investing Tips


ah, ah, ah, ah ah, ah, ah, ……. bbburururururururururuur You’ve got your finances in place, you’ve
conducted your research, you’ve viewed several properties, you’ve selected a property,
you’ve checked the numbers, now it’s time to make an offer! Hi, I’m Andy Walker from monoperty.com where
I blog online about my journey as a property investor and landlord, sharing what works
and what doesn’t, to help you start or expand your property portfolio. Now, property is only worth what someone is
willing to pay for it. There isn’t an entity that decides how much a property is worth,
it’s completely driven by the general population. Now you might be thinking, hang on a minute,
isn’t it set by the valuer when the valuer inspects the property, well yes, but they
base their figures on recent sales in the local area. They do take other factors into
account and they’ll reduce the property accordingly if it requires a lot of work. Making an offer is the start of entering into
negotiations. It is a skill and it’s something I have not mastered yet, but I would like
to share what I have learnt so far. The idea, is that you get the property for
the best price, and there is something important that I want you to remember – you make your
money when you buy, not when you sell! Now don’t be afraid of making a low offer,
or at least an offer below the asking price. Because that is all it is, an asking price.
Your not forcing anyone to sell, your simply giving them the opportunity to sell or at
least enter into negotiations. Now the estate agent or realtor, is a professional
negotiators and they work for the seller. If they work on a commission it’s based
on the price they receive, so the higher the price, the bigger the commission. So be prepared
for bargaining tactics. There is a couple of things you can remind
yourself of, to give yourself more confidence confidence. First of all, no sale means no commission,
and if you’ve showed an interest, that’s good for them. A smaller commission is better
than no commission. You have already done your research and due
diligence, so make sure you convey that when you speak to the selling agent and they will
then realise that your offer is based on sound understanding of the property. Here are some reasons why your offer would
be below the asking price: A similar property has recently sold for a
lower price and the market hasn’t changed. There are some repairs or improvements required
to the property, and you’ll need to be paid for your time in getting those jobs done as
well as the cost for the works. The property has been on the market for a
while and it hasn’t sold. Now this could be because it’s in a bad state of repair,
or it could be that there’s just a lack of demand for that type of property as a home,
but it would still make a good rental. As you are buying as an investor, you don’t
have anything to sell, which means there won’t be a chain behind you and that you can complete
the purchase much quicker than most people. If you’re purchasing with a mortgage, you
can only be beaten by a cash buyer in terms of speed. Speed can also be reflected in your
offer, as it can be very appealing to some sellers, for example if they’re changing
jobs and need to move quickly or a whole raft of other reason’s. Consider this, if someone
has a property on the market for 100,000 and they need to move quickly, they may accept
a lower offer because they have lived there for 20 years and maybe purchased that property
for 30,40 or 50,000, so they have all that equity to play with to their advantage and
yours. Remember, your not forcing anyone to sell,
you’re simply showing an interest and making an offer, and that offer may solve someone’s
problem. I prefer to make my offer in person so I can
see their reaction. I then back up my offer in writing which also contains my terms and
conditions, I’ll place a link to a copy of that letter in the description below so
you can download it and tweak it for your own requirements. The letter emphasises that I am in a good
strong position to buy with a predetermined timeline for completion of the purchase to
give the selling agent and seller some reassurance of my commitment. I also request that, if
my offer is accepted, that the property is taken off the market to avoid any more viewings
or interest and the possibility of a bidding war. Once your offer has been accepted, you will
then need to instruct a solicitor and notify your mortgage broker so they can make arrangements
for the valuation and searches to take place. You will need to move as quickly so you can
honour your conditions and reduce the risk of the seller dropping out of the sale. You
will have committed financially with your valuation and search fees that are non refundable
so it’s in your own best interest anyway. In England and Wales, the sale is not legally
binding until exchange of contracts so speed is of the essence, the law is different in
other parts of the world and your mortgage broker or lawyer will be able to advise you
on this. One more tip before I finish. If the seller
doesn’t accept your offer, but they come back to you with a counter offer that you
are happy with, then request a condition before agreeing to that offer. This happened to me
when I purchased my first renovation project. It was a sale by probate and the property
had been empty for about 5 months. I agreed to the new price on the condition that I was
allowed access to the property between exchange of contracts and completion of the purchase.
This gave me 2 weeks access to the property to allow me to remove the kitchen, the bathroom
suite and all the carpets, so I could then start updating the property before I completed
the purchase and had to make a mortgage payment. It could be that the property your looking
to buy has some large furniture in good condition and you would like that included in the sale.
It could be a hassle for the seller to move that furniture out, but it could save you
money if you was looking at letting that property out furnished. It’s just a thought! Making offers can be an emotional experience,
but make sure you stick to your budget. If your final offer isn’t accepted, then leave
it and walk away. Trust me, you’ll soon find another good property, if not, even better. If you have any advice about making offers,
then please share it in the comment section below, I’d love to hear about it and I’m
sure others would too. As always, if you have any questions, please
leave a comment in the box below or head over to monoperty.com/makingoffers. If you found
this video useful, please share and give it a thumbs up, and if you haven’t subscribed
already, please click that big red subscribe button there, or if you’re on a mobile device
somewhere else on tis page, so you don’t miss any of my future videos that are all
geared towards helping you start or improve your property business. Thank you for watching
and I will see you in the next video. Bye for now.

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