I read on the John Burley forum about a property investor who leverages her time by putting out heaps of offers on properties and only inspects/does due diligence for the properties that get accepted. Obviously her offers are subject to the usual escape clauses and if on closer inspection the property is not a good deal she pulls out.
How do the more “senior” members of the forum take to this sort of approach and are there any problems with it for a Newbie (except for the obvious not getting enough experience out in the real world)?
I have to admit it sure is tempting…You will very quickly become known as a vulture, many agents will walk away from you as they should, I can understand why a newbie might see this method as having it`s use but not thinking it through.
You may get some good buys from sellers in trouble but remember what goes around comes around.
You do not need to get properties far below market value if you put in the work, study the market and continue to learn.Hi,
I’m not a big advocator of this approach at all. In fact, I think it stinks.
It sounds good in theory, but it relies on putting in low-ball offers that get accepted on (usually) a 1:100+ ratio.
My time is far too important to go putting in a mass of offers with little or no chance of success. Worse stiil, it will burn the relationship you might build with a real estate agent who actually has to submit the offer and then gets abused for doing a poor job.
You also need to be very careful about signing contracts and pulling out too often. Sooner or later agents will treat you as a tyrekicker. [V]
I recommend a much more direct approach of finding a property you want to buy and then working out a way that you can make money from it by solving problems in a win-win way.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Steve- finally you and I agree- I knew we would sooner or later [:p]
Propertymagnet, I am pretty old-fashioned- I see making an offer and receiving an acceptance as something of a verbal “contract”. If you were a vendor and receiving offers and accepting them, but the buyer had no real intention of carrying through with that offer, you’d be pretty upset.
In the RE game, we usually sit on both sides of the fence- mostly we buy but sometimes we sell. Only make offers if you’re serious about buying the property, I think. Building relationships is pretty important in RE. Sincerity counts and will win you respect.
kay henry
There seems to be no problems ‘morally’ with buying properties sight-unseen so what is different with the John Burley approach?
I understand that making hundreds of offers just based on lists in the paper or internet sites to try and snare 1 or 2 desperate sellers is not a good idea, but can’t see any issues with checking out a property via photos etc, then putting in a low offer. You would always include a “Building Inspection’ clause to get out if things weren’t up to scratch. Even if you did look in the property yourself you should still include this clause.
Any thoughts?
Jason.There is a big difference between a low offer with a cash deposit and the intention to buy at a fair price between both parties, as compared to a totally unrealistic one with no deposit and with no veiw to negotiation, and obviously designed to weed out people in difficulty.
It is a elaberate game of building a relationship and having a punt. By all means you will win a few when people are in to deep. YOu may even snare some investors who have attempted to wrap. Make money after some one else takes a loss. sounds evil but seems to work. All parties consent to the deal even if it is unhappily.
Brendan1:100+ will be accepted. Take a drive to inspect the property then another 1:100+ to be a good property. So the chance is very slim to buy one property.
Good luck with your approach.
Warm Regards
ChanDollars
[Keep going, you’re nearly reach the end of financial freedom]If the property you find fits what you’re looking for, sometimes you have to pay. I just bought a great property- paid full-asking price for it, because I wanted it. Had i offered too low and remained so low, I would have missed getting it. There were a number of people bidding on this property- why would i risk missing out?
A property next to it- identical and in the same condition as mine, sold four weeks later for 30% more than I paid, and my property was valued 2 months after i bought it, at 30% higher than i paid.
If you want something, sometimes you have to pay for it. Would you miss buying a CF+ property because you didn’t want to pay for it?
kay henry
Last year I missed out one of the property that I really wanted because I am slow and low on offer. The asking price $87k. I offer $80k not accept, $82k not accept, wait for the next day and willing to offer $85k because I really want this property, but it was accepted $84k to other person who offer the day before.
Better luck next time.
Warm Regards
ChanDollars
[Keep going, you’re nearly reach the end of financial freedom]I agree with Kay. If the numbers stack up at the asking price – and you know it’s a fair price, why not pay it?
Although there are some vendors who will list a price, recieve an offer of full price – and still hold out to see if anybody wanted to offer anymore. An agent rang me a few weeks ago after I’d been through a townhouse on its first open (a friend is interested in living in this suburb so I thought I’d have a look while she watched her son play cricket). I got a call the next day (Sunday) asking if I was interested. I explained what I was doing. She told me that there had been a full price offer, but if my friend was serious, she could have a look the following week and put in an offer.
I couldn’t quite believe it – although I guess it was a booming market – but gee, if you put a price on that you’re asking, and you get offered that price, surely that’s good enough?[
]Cheers
MelMel,
I reckon it’s always a good idea when you’re making an offer for a place to ask the RE agent if they are into gazumping. I asked a RE dude that as one of the first things when I was negotiating with him on a place. If a vendor’s price is negotiable- even above the asking price, then they should let the bidders know it isn’t over.
kay henry
Thanks everyone for your thoughts and time. I have not practiced this strategy, just occasionally fantasised about the ease of a system like it! Thanks especially to Steve and your reminder to continue to seek outcomes where both parties win.
Cheers all
pmTheres two ways to look at this situation,
Firstly if you know its a good deal and it will go fast then you have to offer fairly close to the asking price or take the chance of missing out on it.
Secondly , if your just puting feelers out and trying to purchase properties under market value then you will be better of puting low offers on numerous properties. Remember you can always offer more if needed.
Really depends on what you situation is at the time, but i dont like to be forced to pay top dollar thinking that this opputunity wont come along again because it WILL. [:o)]I thought i was wrong once, but i was mistaken !
One of the replies to this topic said that it is important to build relationships in this game. Maybe, but what is the chance if the RE industry is, as many claim, to be full of sharks, crooks and liers.
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