You are probably always looking for your next affordable rental property as an investor in Richardson. However, there are times when the property you want may not be listed at a great price, or even at fair market value. If you have your heart set on a home that appears to be overpriced, this does not necessarily mean that it is out of reach. Even though making an offer on a property that is overpriced will probably be difficult, it is still possible to make a winning offer by using a few smart tactics.
Determine the Fair Market Value
Doing a comparative market analysis is one of the best places to start if you believe that a property is overpriced. Find comparable nearby properties that have recently sold in order to estimate a property’s fair market value. It is also advisable to determine how long the property has been listed. If the property you’re considering is priced higher than comparable recent sales or has been on the market for an extended period of time, it is likely overpriced.
As you conduct research, gather all the data you have into a folder or file. In the event that you make an offer, supporting documentation for your valuation of a property could be useful.
Talk to the Seller
If possible, you should also speak with the seller before submitting a bid on an overpriced home. There are a variety of reasons why a listed property might be overpriced, from the seller simply not knowing how to value their home to using an inexperienced or opportunistic seller’s agent. The seller might not only be motivated by financial gain; that’s another possibility. You may be able to determine why the seller listed their home and how motivated they are to sell by asking a few detailed questions. You might have a chance to negotiate the price down if the seller is pressed for time or has goals other than obtaining a high sales price.
Make an Appealing Offer
When bidding on a highly-priced home, you must provide the seller with a compelling reason to consider your low offer. Offering rewards or enticing terms is one tactic you can use to make your request stand out. A flexible closing date as well as your letter of mortgage pre-approval may be included. To entice a buyer, you might also include a sizable earnest money deposit or fewer contingencies.
If the seller isn’t financially motivated, think about writing a letter outlining your plans for the property’s future or outlining how you will take care of it. When hesitant sellers believe a Richardson property manager will take good care of their beloved home, they may be more likely to sell; because they sometimes have an emotional attachment to their homes. It might be possible to make them more willing to let go if you try to make them envision a nice family or young professional enjoying the house. These factors might make your offer stand out from the competition if it is one of many.
Hire an Experienced Buyer’s Agent
To significantly improve your odds of negotiating a price reduction with an overpriced seller, you must employ an experienced real estate agent. You’ll require assistance in negotiating with the seller and guidance on when to back out. Even if you’ve done everything you can to make your offer appealing, sellers of overpriced homes are unlikely to accept the first one you submit. You will be better equipped to engage in repeated back-and-forth negotiations with an experienced agent by your side without the process taking up all of your time.
If the time comes to back out of the deal, your real estate agent will be able to support your choice. Some sellers won’t change their price, even if it’s much too high. Even with the assistance of your real estate agent, if you’ve given it your all and are still having no luck, it’s probably time to move on.
Using these methods, you can convincingly make offers on any property that you believe will make a great rental home in the future. Nevertheless, it can take a lot of time to manage your Richardson rental properties, negotiate with sellers, and complete multiple comparative market analyses at once. Why not employ someone to carry out those duties for you? At Real Property Management One Source, we offer our rental home investors professional market analyses on prospective properties and comprehensive rental home management. To learn more about what we have to offer, contact us today or give us a call at 214-721-0727.
Originally published on May 5, 2021
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.