Making Offers

Processes and cadence for making offers vary wildly by seller. Some want an offer right away, others want to give you all the information first, some are ok over the phone, some want it in person.

General rules:

1. Never give max offer right away. Always start 10-20k below and take no less than 3 calls/renegotiations to reach MAO.
2. Generally, refrain from making offers too quickly or onsite unless there is competition, flight risk for the seller, the seller is particularly hard to reach.
3. If sellers asking price is an acceptable purchase price for you, always offer a small amount lower first so they don’t get suspicious that they can probably get more.
4. If there is competition, ask that you get equal opportunity to make an offer as everyone else. Be intentional about asking this to ensure they don't just sign with someone else.
5. If a contract gets signed with a competitor, ask for the closing date and follow up through the closing date to catch the deal if it fails to close.
6. Don’t let a seller’s asking price or situation influence your offer. Even if they want $400k and you are at $200k, make the offer, its amazing how much sellers can shift
7. If a seller is firm at a too high of price, you will not “educate them” about comps, rehab costs, finance costs to get them lower. They need to come to those terms and realizations on their own.
8. Avoid “internal buzz words” such as Contract (instead say Purchase and Sale Agreement or just Agreement) or phrases like “Lock up this deal.”

Process

When it comes to the offer, many times how you say things is more important than what you say. Speaking in a way that the seller can understand and allows them to trust you will close deals more so than “educating” or “justifying” your offer.

1. Open call with a happy tone, letting them know the good news that your boss was able to put an offer together.
2. Confirm if it’s a good time, make sure that the seller is not distracted, in the car, or in an environment that makes it difficult to hear you.
3. Do not prejustify the offer.
   1. Avoid statements like “man so you know there’s a lot of work there” or “man the market has really slowed down.”
   2. This is preparing to feed them a shit sandwich. They’re not going to like it before they hear it and are prepared to be disappointed.
4. Present offer with confidence. Simple line such as “So we looked over everything and we are prepared to offer you $XXX for the property”
   1. The offer should be given within the first 30 seconds of the call.
5. After giving the offer, pause and allow them to speak first
   1. It is not uncommon for this pause to be long, up to a minute or longer.
6. If they accept, move to explain to them next steps and get the PSA to them as soon as possible.
7. If not accepted, ask what they have in mind a an asking price if you don’t already have this information.