You’ve found a property you’d like to investment in, but there’s a good chance that the seller will receive multiple offers. What can you do to increase your chances of winning the bid?
An obvious thing to consider is price. It’s a good idea to put in your best offer because you may not get a second chance. In some cases you may have to go above the asking price. Is this something you’re prepared to do? Calculate the highest price you can afford that will generate positive cashflow on the property. Let the numbers make the decision for you, not your emotions.
Every seller’s desire is to receive a subject-free cash offer. Obvious, not all buyers can offer 100% cash, but one thing you can do is include as few terms and conditions as possible to make it more attractive to the seller. You can also offer to get an inspection done BEFORE the offer deadline date (i.e., bring the inspector with you when viewing the property).
For buyers who need a mortgage, it’s important to get your financing pre-approved BEFORE even viewing properties. I recommend putting in the financing approval clause because in some scenarios, you may be approved for financing, but the property may not get approved due to a variety of scenarios such as upcoming special assessments for condo’s or the banks appraised the property for a much lower amount than your offer price.
Timing of the Offer
Try to put your offer in early, but keep in mind that sellers are not obligated to consider, respond or counter your offer, even if yours was presented to them first.
Stay in close contact with your REALTOR® when they present your offer in case you need to make a quick change if the seller counters your offer.
Cashflow Analysis – Stay Positive!
And always, always, have your cashflow analysis in mind when considering what you would do if met with a higher price counter offer from the seller.
Remember that this is your investment, and sometimes winning a bidding war isn’t worth it if you don’t remain cashflow positive with the property.
Are you ready to put your offer in on a property? Contact us and we’ll get you on the right track to purchasing a cash flow positive investment.