Low Balling When Investors Buy Houses

Every year, thousands of homeowners put their houses in the market, for several reasons. Relocation, expanding families, downsizing, sudden change in the family like loss of a family member or divorce are just a few of the reasons why people want to sell their houses. With the increasing number of homes for sale, we planned on embarking on real estate investing, studied and worked our way up. It’s never an easy job, but what better way there is than to start taking small steps, one step at a time. We may have started small but our dream has always been big. We started to buy houses all over Arlington. Days turned to weeks, weeks turned to months and months turned to years. And yes, we have come a long way now and still loving it. It was never an easy way though. Every investor has struggled at some point, and we are not an exception, but we have learned from the past and we want to share to those aspiring investors what we have learned from our experiences. Today, I’d like to share some tips when presenting an offer below retail value, or some would call low balling.

Many people have this common misconception about real estate investors. Most of the time, when an investor approaches homeowners expressing interest to buy houses, they would immediately turn them down. Some sellers believe it’s just a waste of time talking with investors because they are nothing but low ballers who take advantage of other people’s situation. They feel insulted getting a significantly low offer than the listing price.

The truth is everybody wants the best price they can get. Real estate investors are no different, and neither is the homeowner. After all, we all have to make a living. However, investors still get the same negative response most of the time. Believe it or not, most of the time the reason isn’t because of the amount that we offer but the way we present it. Low balling isn’t really a bad thing. It’s what should be done to keep the business going. We need to buy houses below the market value to leave a small room for profit on our end. You see, the most common reason why many get turned down is that they usually fail in presenting the offer and that’s why they always end up looking like they are taking advantage of the situation. (e.g. pending foreclosure).

Before making any offers, set your goals first. Do you buy houses to make money from it or simply live in it. If you really want to buy a house for yourself , you should probably think twice before giving a low ball offer. However, if you are interested in grabbing a bargain and becoming a homeowner for financial reasons and are less invested in which house you own, then a low ball offer could be a right option for you. It is also important to know the seller’s motivation. The seller probably needs cash or needs to move quickly. Structure the offer based on the reason behind selling the house. The offer should be based on facts such as finding the values of similar houses in the neighborhood. If you present an offer far from what is real, sellers would usually see it as something disrespectful. The offer should also be presented with the facts supporting the amount you are offering. Showing a list of comparable sales to the seller would only prove that you have made the offer with all due respect and not out of an attempt to take advantage of whatever situation there is. Doing these things would help increase the possibility of your offer getting accepted.

When it comes to giving offers, there’s no right or wrong for every situation. Everyone wants to win. The sellers and buyers perceive value at a certain price. Buyers want to pay the lowest price possible when they buy houses and sellers want to get the highest price they can have for their house. Lowballs are becoming frequent in the market but offers based on value and not just asking price alone are the ones that usually win.