I am going to focus on the Seller of a hypothetical property that you have found and the offer that he is going to make you. You want to write it so that it has a reasonable chance of being accepted.
Never offer more than you can pay.
Don’t get caught up in the idea that you’re going to make it work no matter what. Let’s face it, some deals just won’t work and you have to let them go.
Ultimately, the person who gets the best deal is the least motivated person. You have many potential homes to buy…the seller only has one home to sell.
Calculate the numbers.
First, you need to know what the current market value of the property is.
Do this by going to your title company (you can pick any you want, just look them up in the yellow pages). Title companies have access to comparable home sales in the neighborhood.
Look for houses that are very similar to the one you are preparing to buy.
Evaluate the home you are buying based on how it compares to homes that have sold before. Only use comps that are twelve months old or younger.
There are two types of real estate that we want to discuss here.
The first type is property that you can buy for cash, for at least 15% below market value. You must sell these contracts to an investor to complete the deal.
All investors are looking for these properties and will gladly pay a fee to obtain them.
The second type of deal is buying for full market value by taking title to the property “subject to existing loans.”
I explain in detail how to make an offer on this type of property in my book. It is one of the easiest ways to buy a property with no down payment or credit check.