Buyer making offers on Investment “FLIP” Properties
So many times, after showing an amazing investment “FLIP” property to my clients, the question gets asked… “Since the owners just bought the property a month ago for $90,000 (now for sale for $180k) cant we try and steal it by making a low offer??” My knee jerk reaction (because of my contracting background) is to automatically say “ABSOLUTELY NOT, what is wrong with seller making some money on the deal… Just because they bought at an amazing price does not mean they have to convey that savings on to you!! But that is NOT always the case and there are certain instances where you can get a good deal on a flip!!
One of the things to look for when deciding what to offer on a flip is the number of days on the market… If it is a brand new listing the chances that the seller is going to take any money at all off the price is slim to none!! But if the investor maybe paid to much money for the property & listed the home to high to begin with causing it to be on the market 30-90 days (sometimes much longer) then your chances of getting a good price just went up tremendously!! One thing to keep in mind on flip properties is many of them fall out of escrow because of low appraisals… One of the best times to get a deal on ANY property is when it first comes back on the market after a failed escrow… If your offer does not get accepted on the first try make sure your agent tells the listing agent to keep your offer as a “BACK UP OFFER” I have closed several homes where my clients offer was not the 1st choice… Its NEVER over until the home closes!!
Another way to get a decent deal on a flip property is to have an agent who knows contracting and home renovations who can spot faulty workmanship!! There are a a lot of beginner investors out there turning out some sub par product… Sometimes its hard to spot but if you can pick up on it you can call them out and possibly get them to come down on price… If you still want it of course!!!