You are probably always looking for your next affordable rental property as an investor in Cypress. However, occasionally the property you desire may not be listed at a great price, or even at fair market value, for that matter. It doesn’t necessarily follow that a property you have your eye on is out of reach just because it seems to be overpriced. Despite the likelihood that making an offer on an overpriced property will be difficult, it is still possible to make a successful offer by employing a few effective strategies.
Determine the Fair Market Value
One of the best places to start, if you believe that a property you are interested in is overpriced, is to conduct a comparative market analysis. It is best to locate comparable properties that have recently sold in the area in order to ascertain a property’s fair market value. The length of time the property has been listed is another important consideration. It is most likely overpriced if the property you are interested in is listed higher than comparable recent sales or has been available for a long time.
As you research, compile all the data you find into a folder or file. If you submit an offer, having evidence to back up your estimation of the value of the property may be useful.
Talk to the Seller
Another step is talking to the seller, if you can, before placing a bid on a property that is overpriced. 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 may have an opportunity to negotiate a lower price if the seller is pressed for time or has needs other than a high sales price.
Make an Appealing Offer
When bidding on a higher-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. Include your mortgage pre-approval letter as well as a flexible closing date. As an additional incentive, you might provide 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 Cypress 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. Attempting to help them envision a nice family or young professional appreciating the home may make it easier for them to let go. If your deal is one of several, these factors may help distinguish yours from the competition.
Hire an Experienced Buyer’s Agent
Employing an experienced real estate agent will significantly improve your chances of negotiating a price reduction with an overpriced seller. You will need assistance negotiating with the seller, as well as advice on when to walk away. Even if you do everything you can to make your offer appealing, sellers of overpriced homes are unlikely to accept your first offer. 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.
In the event that you decide to back out of the deal, your real estate agent will be able to assist you in that decision. Even if their asking price is way too high, some sellers won’t budge. Even with your real estate agent’s assistance, if you’ve given it your all and are still having no luck, it’s probably time to move on.
Using these strategies, you can boldly make offers on any property you believe would make an excellent rental home. However, it can take a lot of time to manage your Cypress rental properties, negotiate with sellers, and complete multiple comparative market analyses at once. Instead of handling those duties yourself, why not hire someone to do it? At Real Property Management Affiliates, 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 713-429-0411.
Originally published on May 5, 2021
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