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Should You Make an Offer on a Property That’s Overpriced?
If you find a property that’s off market and located in an exclusive “A” neighborhood, but is grossly overpriced, should you make the seller an offer?
In this scenario you must use your negotiating power.
- Advise the seller that since the property is off market and he or she doesn’t have an agent to represent them, the seller will save money by not having to pay realtor fees.
- Provide the seller with accurate comps as proof that the current property is overpriced.
- Let the seller know that a price reduction is in order.
If the seller is not willing to be reasonable and accept a fair offer especially after you make them aware of the situation, be willing to walk away from the deal.
As an investor, you never overpay for a property and if the property doesn’t meet our metrics for Cashflow, Equity, or expected return, then you must have the seller compromise or seek another deal.
Why? Because you always want to buy a property with built-in equity. Worst case scenario, it will be difficult to rid yourself of it if you paid more than what it’s worth.
To learn more, watch this video: 2.3 Find the Deal Part 3
