When making offers on properties on the MLS there are a handful of tips you can use to make your offer stronger other than the price you are offering.
If there is a property listed at a steal of a price you can bet that there will be multiple offers on it in a short amount of time. In these cases it pays to make sure you have a strong offer.
All cash offers normally have the highest priority.
If your offer is contingent on financing it will not be nearly as strong as a cash offer.
Proof of Funds
If are going to be making cash offers the seller and seller’s agent are going to want to make sure you really have access to those funds.
Many times you can just have your hard money lender or private money lender draw up a letter showing that you have the funds available.
You can also Google “Proof of Funds” and see a myriad of ways to obtain them.
If closing with cash, hard money or private money, to be competitive you want to shoot for 2 weeks or less.
If you feel there really isn’t much competition on the property you are offering on you could extend the closing duration a bit but no longer than a total of 30 days.
As a wholesaler you really want the longest inspection time possible so that any earnest money deposit placed down should be refundable if your are not able to close. It also gives you more time to line up your end buyer and for them to inspect the property.
On the other end, the seller is going to want the shortest inspection period possible. If you already have your buyer ready to go you can keep this at a minimum, around 3-7 days.
If you don’t have your buyer lined up yet you may want to have this period be 7-14 days.
Earnest Money Deposit
The larger the down payment the more serious you are going to look.
Rule of thumb- Shoot for at least 3% of the purchase price. Common deposits are usually 5k, 10k, 15k, 20k+
Having too many contingencies is a sure way to shoot yourself in the foot. Seller’s do like contingencies.
The inspection period is really enough of a contingency itself. If you are not happy with what you saw during the inspection you are able to back out without any consequences.
When making offers on traditional sales (Non short sales, and REO’s), it is good to place in the contract that you have the right to assign.
The best way to do this is to write in “And or Assigns” after your company name as the purchaser.
If anyone baulks at this you can just let them know you have multiple entities that you buy properties in for tax purposes. You have not decided exactly which one to use yet.
This is when an agent receives the full commission for representing both sides of the transaction, you and the seller.
Agents love it when this happens because their commission is doubled.
Allowing the sellers agent to write your offer can increase your chances of getting the offer accepted. Although agents are not supposed to give preferential treatment when double ending, it happens everyday.
Your reputation is everything in the real estate investment arena. Before you ever get a property under contract you want to be sure that it is a deal that one of your buyers will be interested in.
Make sure you have done your due diligence and analyzed the property thoroughly.
Backing out of contracts is bad business if you consistently do it. Be sure you are going to be able to perform before you waste anyone’s time.
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Here’s to your success!!!
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