At a seminar, a real estate investor once told me,"If you aren't embarrassed by your offer, it isn't low enough." Considering that he's made millions in real estate, he may be worth listening to. You need to understand, however, that a truly low offer will almost never be accepted. Is it a waste of time then? Not at all, because there will often be counter-offers, and a low initial offer is just a way to alter expectations.
“ You should be able to get $250,000, right? ”
Suppose you think your
home is worth $300,000. You mention to a friend that you are considering selling it, and he says, "You should be able to get $250,000, right?" You ask another friend what he thinks the
home is worth, and he tells you $260,000. How confident would you be about your $200,000 estimate of value now? You might lower your expectations, right?
That is one of the primary functions of a low offer; to alter expectations. When a seller is asking $300,000, and you offer $250,000, will he accept your offer? Probably not. He'll almost certainly reject it. Getting cheap real estate isn't going to be that easy. He may counter-offer, however. Suppose you go back and forth, and finally agree to $182,000. He might not have considered selling this low before, but maybe now it even seems like victory to him after starting at $160,000.
Of course you'll lose a lot of potential properties this way. Sellers sometimes won't even take subsequent offers seriously once you have offended them with your extreme offer. You might avoid this by assuring the seller that his property may indeed be worth what he is asking, but that it only works for your purposes at a lower price. On the other hand, so what if you have a lot of rejected offers. Isn't a bit of rejection worth it to get really cheap real estate?
Copyright Steve Gillman. Visit his website for:
1. A photo of a beautiful house he and his wife bought for $17,500.
2. A free book on how to save thousands buying your next
home.
3. A free real estate investing course.
Visit
http://www.HousesUnderFiftyThousand.com
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