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3 Ways To Get Your Offer Noticed and Accepted!

MatPiche

MatPiche

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Nov 17, 2010
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We`ve all heard the expression, `If you`re not writing offers, you`re
not finding deals`. You`ll hear many `gurus` say you should be writing
multiple offers per week in order to get that smoking deal. But what if
you didn`t have to? What if all you had to do was make your offers
harder to reject? If you`re writing 100
offers and only getting 1 accepted, or none, you either love wasting
your time, or there`s something wrong with your offers. So how can you get your offers accepted?





1. Less Conditions







Reduce the amount of pointless conditions. The more conditions, the
more confusing the offer becomes. Remember, a confused mind ALWAYS says
NO! Insert the conditions that are essential to your deal. I know many
investors that add a number of pointless clauses in order to feel more
important. More like a sophisticated investor. Most of the time, their
conditions are just repeating the pre-written clauses already within the
offer i.e. `The seller must leave all fixed items. The seller will
leave any rental equipment as part of the sale etc.` These types clauses
are already set in the OREA offer! By adding them, you`re doing nothing
but making the sellers eyes cross from looking at 3 pages of
conditions. The reality is, if you`re buying single-family properties, 9
times out of 10 you`re dealing with a homeowner who is uneducated with
your `savvy` tricks and clauses (9 times of 10, so is the sellers realtor!). Keep it simple and straight to the point.







2. Cover Letter











`A cover letter? I`m not applying for a job here!` You would be
surprised by how much of a difference a cover letter will make. This is
where you can connect with the seller personally and give a short
description of how you arrived at this price. Maybe the roof needs some
work and you also pulled some comparables with your realtor and that`s
why you are offering them $10,000 less than their asking price etc. It
makes the offer that much more personal and also shows them that they`re
dealing with a human, not a faceless mean investor looking to steal
their house! Below is a FREE example of the exact template I use for my clients on a daily basis. Please, use it and see your deals get accepted.






Dear Mr. and Mrs. Buckingham,







It is with pleasure that we submit the following offer to purchase
750 Parkview Cr. As veteran investors, we find it important to keep the
lines of communication open between the vendor and the purchaser and
trust that you`ll find this quick cover note to be helpful.







We would like to take the opportunity to point out a few items regarding the attached offer:






We took a lot of time to carefully research the current market
conditions as well as comparable properties and decided that our offer
of $171,000 is very fair and reasonable. We are not trying to `steal` or
get an `unbelievable deal` on your property but rather create a win-win
scenario. There are many upgrades that need to take place such as
replacing all the flooring throughout, installing a new bay window as
well as updating the upstairs bathroom in order to make it ready for the
rental market. This was factored into our offer.

  • We understand that you are looking to purchase a home and included a closing date of June 21[sup]st[/sup]
    to best fit your needs. However, if you would like an earlier date at
    any time, we are very flexible and can close at a time that suits you
    best.


    We would also like the point out that there is no financing
    condition and we do not have to sell our own home in order to buy this
    property. Once our few conditions are met by April 1st, this will be a
    firm deal!


I am certain that you will be extremely happy with this offer and I
look forward to making this another smooth and hassle free transaction.







Sincerely,











John and Jane Smith







P.S. If you have any additional questions or concerns, please feel free to submit them to my realtor (Mat Piche) on my behalf. We`ll then be sure to get an answer back to you in a timely and efficient manner.







3. Give Two Offers














Here is one for all you investors who love savvy `tricks` in order to
get the seller to say YES! Give two offers and a cover letter for each
explaining the deal. For example, you could give one close to their
asking price with a longer closing and one for a lower asking price but
with a shorter close. It`s a scientific fact that when you give someone
options, they are more likely to pick one of them rather than say no to
both.


Remember, you should be a geographic specialist focusing on one type
of property. When something in your target neighborhood pops up that
fits your criteria, give a fair offer(s) using these tips, and you`ll be
hearing more `YES!` and less `No way!` Stop wasting time throwing
garbage offers because you feel that you are entitled to a deal just
because you`re an `investor` (sellers don`t give a crap who your are!).
Yes, you may get a few here and there but your portfolio will grow much
slower using that strategy. Not to mention that this is a business and
if you`re known around town as the `mean investor`, that definitely
won`t help your business grow. Trades, realtors, mortgages brokers etc
won`t want to work with you either. You`re wasting their time! How fast
will your business grow without these essential services??



For more investing tips and blogs, stop by my website :)
 
Very good insight in here that every (novice) investor in single family properties should heed !
 
Good point with conditions. I like to make sure I have one solid 14 day clause. There might be 10 things I need to complete in the mean time but listing all 10 as conditions to be removed just makes it look like you don't intend to close (to most sellers & agents). I know REIN teaches things like - confirm insurability, have lawyer review, etc etc but that doesn't mean you can't do that in the time frame allowed for other condition(s).





I've had crappy luck w/ the two offer method. I still do firmly believe that if you present option A & option B people are more likely to chose one (and not walk away entirely) than if you present one option exclusively. I just haven't been effective at it (yet).
 
Thanks Kris! Good idea with only adding the "regular" clauses i.e Financing, insurance, inspection etc but doing all of your other due-dilligence in the same time frame without putting them ALL in Schedule A. If your other due-dilligence uncovers something you don't like, you still have an "out" with the 'lawyer to review' clause lets say. Good strategy!
 
The best way to get your offer accepted among competing or multiple offers is to submit your offer through the listing realtor. Nothing works quite like double-ending the commission to get the realtor working in your best interests to have the vendor accept your offer. Its just plain common sense. No one is immune from this. Then your goal is to get reasons into the hand of the realtor to convince the seller why they should accept your offer. The letters you've given will do the trick very well.
 
[quote user=TangoWhiskey]The best way to get your offer accepted among competing or multiple offers is to submit your offer through the listing realtor.





I can see how this could work in a multiple offer situation, but in general I wouldn't recommend it, especially for novice investors.



In Alberta, if the buyer's realtor is even from the same office as the seller's realtor she is limited as to what she can reveal and what advice she can give. For instance, she cannot advise on pricing, and this could be a huge problem for a novice investor.



With a few exceptions, even I won't deal with a realtor at the same brokerage as the seller's realtor because I want to be sure that I am getting all possible information that could affect my decision.
 
[quote user=kfort]I've had crappy luck w/ the two offer method. I still do firmly believe that if you present option A & option B people are more likely to chose one (and not walk away entirely) than if you present one option exclusively. I just haven't been effective at it (yet).


I hesitated to offer this advice, but I am a firm believer in the 'abundance mentality,' so here goes...



Try making one conventional offer at a discounted price and one offer closer to list price but with a chunk of seller financing. For example, if list price is $300k:

  • offer $280k with the usual 20% down and
    offer $295k with 10% down and 10% seller financed (terms to be decided)

If the seller accepts the lower offer, you win! You have paid less for the property.

If the seller accepts the higher offer, you win! You have still got the property for a fair price (because your financing won't work if the property is overpriced) and you only have to come up with half of the down payment.



And either way the seller wins too. Either he gets a higher price or he gets all of his money now.
 
Note: the seller may counter either one of these offers, in which case...you both win!
 
[quote user=Sherilynn][quote user=kfort]I've had crappy luck w/ the two offer method. I still do firmly believe that if you present option A & option B people are more likely to chose one (and not walk away entirely) than if you present one option exclusively. I just haven't been effective at it (yet).



Try making one conventional offer at a discounted price and one offer closer to list price but with a chunk of seller financing.




I've done that trick & also tried with closing dates. Longer close but more money or short close and less money. I photocopied a chapter from the book on vendor financing to go with the offer as clear explanation but ... I'm not convinced it even was submitted as requested. I use a different agent now.
 
[quote user=Sherilynn][quote user=TangoWhiskey]The best way to get your offer accepted among competing or multiple offers is to submit your offer through the listing realtor.





I can see how this could work in a multiple offer situation, but in general I wouldn't recommend it, especially for novice investors.



In Alberta, if the buyer's realtor is even from the same office as the seller's realtor she is limited as to what she can reveal and what advice she can give. For instance, she cannot advise on pricing, and this could be a huge problem for a novice investor.



With a few exceptions, even I won't deal with a realtor at the same brokerage as the seller's realtor because I want to be sure that I am getting all possible information that could affect my decision.


I agree with trying to get the most info possible, this is very valuable, but I generally take the approach that trusting realtors for advice is highly dangerous as they are fundamentally conflicted. They exist to make transactions happen as otherwise they don't get paid. There's obvious value to having some good relationships with one or two or more to get the first crack at deals they learn of but at the end of the day the risk is all ours as the investors. So I'm ok with someone not sharing info with me as the "customer" rather than the "client" - the seller - as it is really clear who has all the responsibility to accurately value a deal. At least I know what to appeal to and can better predict the actions of everyone concerned when the agent is double incentivized to make the deal happen. It also reduces the issues that always happen when communications between you and the seller have to get filtered through two people instead of one, each of who has their own agenda and failings. It just reduces the number of variables of things that can go wrong.
 
[quote user=Sherilynn]Try making one conventional offer at a discounted price and one offer closer to list price but with a chunk of seller financing. For example, if list price is $300k:




  • offer $280k with the usual 20% down and



    offer $295k with 10% down and 10% seller financed (terms to be decided)





If the seller accepts the lower offer, you win! You have paid less for the property.



If the seller accepts the higher offer, you win! You have still got the property for a fair price (because your financing won't work if the property is overpriced) and you only have to come up with half of the down payment.









I have tried this strategy on many occassions but have had issues with financing. I am assuming you are disclosing to the lender that the property will be 10% seller financed and thus 90% LTV? My experience is that banks don't like to see 90% LTV on revenue property. Are you having problems getting funding with this type of offer?
 
[quote user=MarkTorgerson]I am assuming you are disclosing to the lender that the property will be 10% seller financed and thus 90% LTV? My experience is that banks don't like to see 90% LTV on revenue property. Are you having problems getting funding with this type of offer?


So far, the sellers have opted for the lower price. The 2-offer strategy seems to make it much easier to arrive at a lower price.



However, you are absolutely right that seller-financing must be disclosed and there are many banks that don't want to do it. When I spoke with Scotia last fall, they were willing to do it for me. Of course, that may have changed by now.
 
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