House 11 Offer Accepted!!

After getting the fastest rejection of an offer a few days ago, I just got the fastest acceptance - about 2 hours. I think that means I offered too much :-) Actually, I think the timing just worked out on this one. The owners are actually in the process of moving out now and the agent said he kinda pushed them to accept the offer. Once escrow has closed, I'm going to see if I can talk to the agent and get some background info, like how many previous offers there were, etc. I can't ask now because the sale is not yet final and he still has a fiduciary responsibility to the sellers. However, once escrow closes, he will be free to talk. I was originally planning on offering $118,000 but raised my offer $2,000 because there was so much equity, I figured there was less of a need for the owners to sell (the foreclosure auction will still over a month away) and / or there would be other offers higher than mine. I guess I was wrong.

One thing I did do which probably helped me, was to include my standard fax cover sheet for offers. On this, I explicitly point out to the agent that my offer is a cash offer, I am offering a fast close, will take the property "as-is" (if that's the case), and that I am not using an agent. For this last point, I also mention their seller will save X dollars because they don't have to pay a commission to the buyer's agent. I replace X with 3% of my offer price. I think it has a bigger psychological impact to show how many thousands the seller will be saving by accepting my offer (nevermind the fact that my offer is already thousands below their list price).

Anyway, there was a counter offer, but the price stayed the same. The only changes were that escrow is to close "on or before 3/11" (instead of "on 3/11") and I take possession 2 days after the close of escrow. This is to give the owners time to move into a rental. The agent explained they are a bit short on cash and so they need to get the money from the sale to move into a rental. That's ok with me. They are an older couple and I don't think they will do much damage.

Some other facts about the property: it's a corner lot (which explains the bigger lot size), has a screened in patio, a storage shed, and a 2 car carport. It was built in 1971. I'm figuring this property will be closer to the high end of the comp range based on the listing price, the condition, and the lot size.

House 11

Found a preforeclosure this afternoon and submitted an offer. It's a 3/2 house built in 1971 that looks to be in good condition. There appears to be about $55,000 equity in the property: I can only find the first mortgage recorded against it and no other liens. There are no delinquent taxes owed. The property goes to auction in April and comps are in the $120,000 to $145,000 range. Listing price is $145,000 and I offered $120,000, all cash with a 15 day escrow. I gave them until 4 PM Friday to respond.

I think I might have been giving sellers too much time to respond to my offers. On one of my recent offers, I gave the owners over the weekend to respond. In retrospect, that probably wasn't wise, since that gives them the weekend to show the house and get other offers. Since my offers are generally low, I think I need to put some pressure on the sellers to accept or reject the offer quickly.

While writing this, I got a call from the agent. He's requesting I provide proof of funds, which isn't a problem. He said the owner is moving and is ready to sell. The agent sounds like he's going to try to get this thing sold.

All offers rejected

All my remaining outstanding offers have been rejected.

I was pretty busy yesterday and was unable to do much research. Hopefully, I'll get some more offers out today or tomorrow.

Houses 7, 8, 9, And 10

House 7 is an REO condo - a two story with 2 bedrooms and 1.5 baths. The bank took it back on a $25,000 bad debt. Comps are in the $55,000 - $57,000 range. Not much work is needed, maybe some carpet and paint. It was listed for $54,900 and I offered $39,700. I actually thought this might have a shot at being accepted since there was still plenty of room for the bank to make money. Unfortunately, this offer has gained the dubious distinction of being the fastest to be rejected - total time elapsed from offer to rejection: 1.25 hours. I didn't even get a counter-offer. The agent said a couple other people were interested, so the bank was going to wait a bit and see what other offers they get. I'm reminded of a story from another investor about how he or she sometimes runs into someone at the bank who thinks they are doing the bank a favor by holding out for top dollar, only to have to accept a lower offer later on. The bank is paying the $120 a month HOA fees, plus property taxes as this thing sits empty. Oh well. I'll check back in a couple of weeks to see if it's still available.

House 8 is a 2/1 house that is at the preforeclosure stage. The original loan was $100,000 and it is only 1 year old, so the payoff amount, with fees, is probably a bit more than that. Comps are around $115,000 - $120,000 and i's listed for $117,500. I offered $102,000 and a quick escrow (it goes to auction on March 18). I also pointed out I am not using an agent, so the sellers will save $3,060 by not having to pay a buyer's agent commission. The sellers also offered to pay for a home warranty, which I declined. Haven't heard back on this one, but I think the only way it will fly is if the bank will take a short sale. What I find interesting about this is that the sellers are including all appliances and offering a home warranty. This tells me they aren't completely broke. I think it may be possible that they might chip in some money of their own to avoid the foreclosure.

Houses 9 and 10 are for sale by a property wholesaling firm. One is a 3/2 house at $20,000 under FMV and the other is a 2/1.5 condo about $15,000 under FMV. Both just need minor cosmetic work. These are sold on a first-come, first-served basis, so I don't know if I'll get either one.

No Go On House 2

My offer was not accepted on House 2. It was sold to someone else. So now I have no more outstanding bids. Time to get some more out there!