You’re probably looking for your next great affordable rental property as an investor in McKinney. 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 automatically follow that a property you have your eye on—even one that seems to be overpriced—is unaffordable. Even though it will probably be difficult to make an offer on a property that is overpriced, it is still possible to do so by employing a few smart strategies.
Determine the Fair Market Value
If you believe that a property you’re interested in is overpriced, conducting a comparative market analysis is one of the best places to start. To determine a property’s fair market value, it is advisable to find recently sold comparable properties in the area. Additionally, it is prudent to determine how long the property has been on the market. 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 conduct research, organize the information you collect 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. A listed property may be overpriced for a variety of reasons, from the seller simply not knowing how to value their home to use an unqualified or opportunistic seller’s agent. The seller might not only be motivated by financial gain; that’s another possibility. If you ask the seller a few specific questions, you may be able to figure out why they are selling and how motivated they are. 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 making a lowball offer on a home that is overpriced, you must provide the seller with a compelling argument. One strategy you can employ to make your request stand out is to offer incentives or favorable terms. You could include a flexible closing date together with your mortgage pre-approval letter. To sweeten the deal, you could provide a substantial earnest money deposit or fewer contingencies.
Consider writing a letter outlining how you will take care of the property or perhaps the future you see for the property if the seller isn’t financially motivated. When hesitant sellers believe a McKinney 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. It might be possible to make them more willing to let go if you try to make them envision a nice family or young professional enjoying the house. These features could make your offer stand out from others if it is one of many.
Hire an Experienced Buyer’s Agent
Employing a knowledgeable real estate agent will greatly improve your chances of convincing a seller to reduce their asking price on a property. You’ll need someone to assist you in negotiating with the seller and advise you when to back out. Even if you’ve done everything possible to make your initial offer appealing, sellers of overpriced homes are unlikely to accept it. Your ability to engage in repeated back-and-forth bargaining without the process taking up all of your time will improve if you have an experienced agent on your side.
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. Some sellers will not negotiate their desired price, even if it is excessively high. It is best to move on if, despite your real estate agent’s assistance, you have exhausted all possible avenues without success.
Using these strategies, you can boldly make offers on any property you believe would make an excellent rental home. Nonetheless, simultaneously conducting numerous comparative market analyses, bargaining with sellers, and managing your McKinney rental properties can be time-consuming. Why not employ someone to assume these responsibilities on your behalf? At Real Property Management Legend, 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 214-227-2404.
Originally published on May 5, 2021
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