A Little Too Fast?

A Little Too Fast?

Real estate investors are always on the lookout for their next deal. With financing in hand and their real estate agents scouting the territory, there’s typically a sales contract ready for the next deal. The goal of course when buying any property is getting the lowest price possible. Each dollar you can squeeze out of the seller is more profit for your bank account, right?

Experienced investors surround themselves with professionals that will help determine an acquisition price but sometimes the unexpected occurs: the seller accepts the offer just a little too quickly. Has that ever happened to you? Have you ever made an offer on a home and before you get back to the office the signed sales contract is already faxed back to you? That sound you hear is the sinking feeling you left too much money on the table. How can you prevent that from happening?

Say you research a potential project, run your financials and make an offer of $150,000 and the seller accepts it the very same day. Could you have offered $140,000? Maybe even $135,000 and give the seller a few days to think about it? Sure, but you never know. You can do all the research in the world but if you don’t know the personal motivations the seller has then you still have a missing puzzle piece. But that’s not really something you can truly know, can you?

You can run a title report to see if there are any outstanding liens on the property or dig through county records to see if a Notice of Default or foreclosure filing has occurred. If any of these items appear then you know you have a motivated seller. Sometimes though you just have to use your best judgment.

The best course of action is not to fret if the seller accepted just a little too quickly. Did you leave money on the table? Maybe. But you made an offer based upon your own math and the numbers worked out with the offer you made. Don’t beat yourself up too much when the deal makes sense at the price you paid.