Posted by tarheelT on October 29, 2000 at 12:46:38:
What do you mean that you didnt follow up because of the appraisal?
TarheelT
multiple offer strategy - Posted by Brent–il
Posted by Brent–il on October 28, 2000 at 17:02:55:
Trying to devise a three offer strategy, ala LeGrand. Here’s what I’ve come up with…
All CASH-- 70% of FMV
or
SPLIT FUNDING EQUITY AND ASSUMING THE BALANCE OF THE LOAN @ 80% of FMV
or
LONG TERM L/O (nothing down) @ 85% of FMV.
All of this, of course, is tailored as much as possible towards the seller’s needs, but I thought it good to have a starting base.
I’d appreciate any feedback on this plan.
Thanks in advance for your answers.
Brent
Re: multiple offer strategy - Posted by dewCO
Posted by dewCO on October 28, 2000 at 23:31:37:
Brent has some good ideas. The most important I think is to SOLVE a MOTIVATED sellers problems. Otherwise doesn’t matter how many offers, you’re probably wasting lots of time. Have you read Joe Kaiser’s article in the “How to” section here, on “Getting on the same page with the Seller”.
Just to avoid any future misunderstandings - Posted by Brent_IL
Posted by Brent_IL on October 28, 2000 at 20:10:54:
Just to avoid any future misunderstandings, this post is from someone other than Brent_IL. Brent_IL is Brent Evans at brentevans@email.com. I mean no offense, but some of the other boards are having problems with people posting under similar names.
Sometimes multiple offers fuel the buyer’s indecision or increase their confusion. You are competing against yourself. I’ve borrowed a technique from car salesmen called, “Building a paper car.” It only works if you are physically present. They ask prospects a few questions like, “What did you like best about your old car?”, “What color is it?”, “Are thinking about getting blue again, or do you think you might want to try a different color?” They ask about handling and speed, too. Then they go to their list and show the buyer the one car they have on the lot that best matches the paper car. They sell what they have.
Even a motivated seller is only motivated to action if you can solve his problems. Ignore what they say they want. No seller ever needed cash. They need the things the cash represents, like income, a nest egg, or a paid mortgage note. Ask casual questions to find out what the needs are, and present one offer that best solves the buyer’s concerns. Save the multiple offers for a shotgun approach. $.02
Re: multiple offer strategy - Posted by Pavon Bailey
Posted by Pavon Bailey on October 28, 2000 at 17:52:35:
BRENT:
When I made my first few offers, I did the multiple offer strategy just like you’re doing now. When making multiple offers, as you already know, it’s best to tailor them to the seller’s needs (thanks HR!). Anyway, stick to the universal rule of REI: When making offers, either give the seller HIS price and YOUR terms, HIS terms and YOUR price, or YOUR price and YOUR terms (ideal).
The multiple offer strategy, I believe, works. Do not let the seller “cherry pick” among the offers. In other words, don’t allow him to take a high price from offer #3 and the ALL CASH term from offer #1. Tell him that each offer stands as a package of its own based on how much YOU can afford to buy the house.
I made an offer on a house that needed fixup. The seller was asking 40K. I made the following 4 offers:
- 25K ALL CASH 2) 30K; 5K down, 25K due in 1 yr NO interst, NO monthly pmts 3) 32K, 2K down, 30K on a bond for deed (land contract) payable at $200/mo until paid out (think it would take 150 months or so…check the math) 4) 35K, 0 down, owner to take back a note payable for 30 yrs, 3% int, balloon in 5 years.
The seller chose the 3rd offer! WOW! However, stupid me did not follow up because of the appraisal. Why I made such a dumb mistake, I do not know. But, I am still a newbie and I guess you will make mistakes. I look now and I see that there is NO EXCUSE for me making that mistake.
Go out there and use the Multiple Offer Concept. I look at like this: You’d increase your chances to catch a fish when there’s 3 or 4 lines in the water instead of one.
Have a nice and productive day. If I can assist you in any way, drop me an email.
Respectfully,
Pavon Bailey
Re: Just to avoid any future misunderstandings - Posted by Brent
Posted by Brent on October 28, 2000 at 22:39:23:
Thanks for the reply and sorry for the misunderstanding re: your handle. I’ll choose another name. Thanks again.
Brent