Offers at 30%-50% off asking price

I've had that problem here in Jersey too. I was looking at one property made a offer at 35% off the asking price and they told me that have had offers that exceed the asking price. Others are asking way to close to the asking price.

It kind of upsets me that their are investors going over the asking price and paying cash. You are right though, keep sending in as many offers as possible. One is bound to get accepted!

Where is the list price compared to the value of the property? You are looking to buy below value. Many REO's are being priced well below value to encourage competition from buyers. Check to see what the value of the property is before making an offer.

Al

Thanks for the reply, I am with you, I think that it is really just a matter of truly identifying those opportunities. It just seems funny at times because you feel like you're the only one going through it, but then you realize that it's just part of the business.

The list price for the particular area that we have identified is at or around 5% of what we believe to be the value for properties in that area. So in essence, we are looking to create a spread or value of 25%-30%, in the hopes of assigning the deal or moving the deal to another investor. So in one scenario we found a property that listed for 110k and we offered 77k, but the deal closed and sold at 115k. The comps in the area were at 98k, for the similar sized properties (sqft, # of beds and baths). I think also what you find is that someone can pay 115k, and be very happy with receiving 1150 per month in gross rental income, which is what the avg rent goes for in that area. And that is why I posed the question because this may not be occurring everywhere, maybe just in some markets that have been hit hard by the foreclosure crisis i.e. vegas, phoenix, san diego, but still have strong rental markets. Thanks for the reply, I appreciate it.

This would be a sign that the inventory of available properties is decreasing. Competition for properties is increasing, which will cause values to go up. This is happening to some extent here in Phoenix. There has become a demand for properties that fit the "First Time Home Buyers", probably because of the tax incentives. In less popular areas, and in higher valued homes, prices are still decreasing. It will be interesting to see what happens when that program expires.

Al

I see this alot, many ppl are making higer offers and we are getting shut out. Me and my partner have been outbid a few times recently but I can feel it. Don't give up, just keep on pushing and you will make it. I know I will, you just have to believe. Good luck and let us know when you get your 1st offer accepted. I believe everything happens for a reason and there are only better deals to come!

Jeremy

As Matt told us, 24 out of 25 will be rejected.

Al

It's definately a numbers thing. It's just a matter of putting enough out there. Your number might be different from others. You have to chart what works for your area. This is the law of average. Much success to you.............Lubertha