So, it's really tough to answer your question. Although, I would agree with others who have said the longer it's on the market, the more willing to negotiate the bank will be. Sometimes submitting a list of needed repairs along with pictures can help, because most of the time the person at the bank has never even seen the property.
General rules of investing in real estate! (Flipping homes)
Many may ask the first question based on TV shows â€œhow much can I make?â€ In our market itâ€™s generally 10-20%. The response from the rookie investor is â€œbut on TV they doubled their money and bought the home for pennies on the dollar!â€
The general investment rules for my market (Kansas City)
1) On most REO properties investors are held back from bidding on properties for the first 15 days owner occupants get the first look and the first opportunity to purchase a foreclosed home.
2) When flipping homes it is generally better to flip in existing neighborhoods with 50 or more like and type similar homes. This helps with area stability and appraisals which are needed to sale the property at later point in time. Homes off the beaten path with huge swings in area value may cause an investor problem when the appraisal is done and FHA case # assigned.
3) Location, location, location this sells real estate and helps a homeâ€™s value and appraisal.
4) Schools go hand in hand with location; in our area the Kansas City Missouri school district has lost their accreditation from the State of Missouri. Flipping homes in this area may not be in the best interest of the investor since good schools are high on the list for most home owners.
5) Once the first look has passed for owner occupants and the process is opened up to investors, a new investor should tour 15-20 properties to try and get the feel of whatâ€™s available in the marketplace.
6) When making offers you will probably only have 1 out of 5 accepted. One of the reasons this happens is there are generally many people looking at the same property and multiple bids being offered by many investors, even when they ask for your final and best offer you may not be the winner even if you have the highest bid. The banks look at your ability to perform the contract and cash offers get an edge, followed by seasoned investors with a track record of solid performance.
7) When making an offer, time on the market pays a big role in what might be accepted. Many times the properties that we purchase are at 180+ days on market. The banks will negotiate a little harder on these properties. In the first 90 days they generally have a set system of price reductions over a period of time until they find a buyer, if you make an offer on a property during this time frame a general rule of thumb is no more than 10% off the current price, much more than that you are wasting everyoneâ€™s time. If you agent is smart and you are interested in the home the agent should (fishing expedition) leave feedback or make a call to the other agent with comments such as my client has no interest at x price but would have some interest at y price is there any way we can get together on this?
8) Other types of opportunities: houses in estates & trustâ€™s, many times these are motivated sellers who just want to conclude business in a quick manner. Large discounts maybe available on these types of purchases.
These general guidelines were written for persons considering becoming an investor in real estate. If I can be of service or help you find a property please contact me at 816-809-1903 Thanks, Scott
You have to be able to wait them out and be willing to walk away from the property at any time they try to pull a fast one on you.
Hope it all works out for you,