Open houses - Posted by Bryan-SactoCA

Posted by Brent_IL on August 19, 2003 at 20:17:57:


Open houses - Posted by Bryan-SactoCA

Posted by Bryan-SactoCA on August 19, 2003 at 15:45:04:

I’m thinking of going to open houses (houses for sale) every Sunday for a while so I can learn the market. Should I tell the realtors that I’m a new investor learning the market and have business cards ready to give to them?

Re: Open houses - Posted by Eduardo (OR)

Posted by Eduardo (OR) on August 19, 2003 at 18:43:09:

Hi Bryan–

My advice is NO! Do not tell them you are an investor. Learning the market is an excellent idea. Here’s my suggestion on how to do it: 1) Go see as many houses as you can, whether they are open houses or not. Pose as a reluctant buyer if you have to say something (“Maybe, I’m interested, what have you got here?”) (By the way, don’t dress up, don’t try to impress anybody, and don’t be a motor-mouth–ask questions and then LISTEN to the answers, nod your head, and LISTEN some more [I can’t add up the hundreds of times I’ve done this and they tell you EVERYTHING you ever wanted to know and more.] Always turn the conversation away from you and toward the house (keep the conversation on track–be polite and respectful, but never waste time talking about the weather, baseball, your kids, their kids, or anything but the business at hand). You can do this by always responding with a question. What you do when you get to the house is three things: A) Look over the neighborhood, B) Look over the house and yard, and C)MOST IMPORTANT to learn values, try to guess what the asking price is (you make an effort NOT to learn this in advance–don’t ask the price ahead of time, cover up the price on flyers). Then you see how close your guess was. When you consistently guess within about 5% of the asking price, you are getting a handle on values in that particular market (there are always some properties that are overpriced–when you do enough of these guessing games you begin to recognize when it is that their price that is wrong and not your guess). Learning the local market is one of the most important things you must do BEFORE trying to invest. Always compare and contrast the house you just saw with the previous one or two you saw that day. You learn what you are getting for your money that way. When with a real estate agent (make sure you see a bunch of FSBO’s too), whether by appointment or at an open house, ask about the things you can’t see such as plumbing, electrical, understructure, financing (will the owner carry the/some of the paper), and owner’s motivation to sell (IMPORTANT!). Ask all sorts of questions. Repeat, DO NOT PLAY THEIR GAME and answer their questions! (If they keep pressing you, keep moving around and looking at stuff and–ASKING YOUR QUESTIONS, meanwhile always smiling and nodding your head.) Always have the mindset that you are not really interested in buying the house. In fact, best is to set yourself a goal to look at X number of houses each day/weekend purely for the education and YOU WOULDN’T TAKE IT EVEN IF THEY OFFERED TO GIVE THE HOUSE TO YOU. This way you’re under no pressure whatsoever to even feel like you may want to buy the house and you don’t come across as an eager beginner willing to pay too much if you run across an experienced agent. In my humble(?) opinion it is far better to get an education about the local market first and then, after several months and seeing a hundred houses go by, maybe make a lowball offer rather than starting right out as a rank beginner and wasting time writing offers on high priced properties owned by people with low motivation to sell. This is as much an exercise in self-discipline as anything else. Hope it helps you.

–Old-Timer Ed

Re: Open houses - Posted by RichV(FL)

Posted by RichV(FL) on August 19, 2003 at 18:08:40:


Hand out those business cards to everyone you know in the RE biz.

You may get lucky and come across a good realtor that can help you find properties that fit your investment needs.

Great Success,