How to Get Your Fixer Upper House Counter Offer Accepted

So you found a house with good potential, completed your repair estimate and calculated your maximum offer price.  You then made an offer somewhat below that price in order to allow room for negotiating.

As expected, the bank owner has returned a counter offer….that’s higher than your maximum offer price.  Now what? If you’re like most investors (or home buyers for that matter), you’ll pluck a number out of thin air give it a little bit of the smell test (smells decent to me) and shoot it back over to the seller.   In most cases, this results in another counter-offer from the seller and the game is on.  I often ended up with the seller sticking on a number that was higher than my maximum offer price…..which created a situation where either my profit margin was impacted or I had to do less cosmetic work than planned.

But then I stumbled across a method that has worked for me almost every time:

one Do not make any counter offer in round numbers.  Your counter offer is not $87,000.  Its $87,540.  Why?  Because this gives the seller the impression that you have really sharpened your pencil and have made the highest possible offer you could as an investor. And this is the message that you should send your realtor back with.

 

 

twoLets say you used the method I described above and you still received a counter offer….above your maximum offer price.  Respond again with a counter offer, your maximum offer price and document how you arrived at the offer.  That’s right, show the seller your repair cost estimates, holding cost estimate and even your desired profit.  Now the risk is the seller not agreeing that your work is not worth a 20% flip profit, but what I’ve found – particularly when a private seller is involved-is that the seller didn’t fully understand the amount of repairs that the house needed and was looking at your counter offer as just an investor trying to make a killing.  Now you’ve given them ammunition to go back to their friends with…..”yeah I only got $53,425 for the house but it needed over $20,000 worth of repairs!  I don’t know what that investor guy was thinking buying this house!  A Bank seller will appreciate the documentation as a means to prove to their investors that the price they accepted was reasonable.  I always include comparable sales too…..there are enough foreclosure sales happening today to show them what other similar REOs are selling for + to validate that you aren’t low balling the after repaired estimate to make the numbers work in your favor.

 

And in case it hasn’t occurred to you yet, you need a tool to quickly put this documentation together and present it in an organized way.  That’s where the Rehab Offer Calculator comes in. Not only does it allow to easily calculate your maximum offer price for any fixer upper house, it also automatically creates the documentation you need to validate any offer.

Click here to get an immediate download of the full version.   It costs less than a tank of gas and comes with a no questions asked 100% money back guarantee…..so its a zero risk purchase.