You’ve found an incredible real estate deal that you’re very excited about. You fully intend to make an offer, but the broker casually mentions that there is another investor interested in the property. They tell you that this investor has every intention of buying the property you love when all is said and done.
What do you do? How do you convince the seller to accept your offer over another real estate investor?
Well, nothing is 100% guaranteed in this lifetime, but if you use the tips we’re about to share below you’ll find it much easier to convince a seller to choose you over another potential buyer.
With that said, let’s look at some crucial tips to help you land the real estate deal of your dreams.
Key #1: Pay for the Investment Property and Cash If Possible
As we all know, money talks and B.S. walks. A property owner will know that you are more serious than your competitor if you are willing to make a cash offer. This will signal to the homeowner that you not only want to buy their property, but you love it so much that you want to buy it as quickly as possible by forgoing the process of getting other investors or obtaining a mortgage.
Guess what? When a property owner sees how serious you are by making a cash offer, they’ll know that you aren’t going to run into any bumps in the road during the buying process. They’ll know that you do not have to obtain a mortgage that you may or may not qualify for, so they’ll feel comfortable knowing that the deal is definitely going to go through.
In fact, it’s often possible to make a cash offer for a lesser amount than your competition. Again, if the competition is willing to pay more but they need to obtain a mortgage, the seller might not be willing to take a chance with them because it’s very easy for lenders to reject candidates while they are trying to obtain a mortgage.
So, if it’s at all possible, a cash offer is definitely a great way to get an investor to choose you over the competition. They will absolutely know the deal is going to go through and they’ll feel confident that they are going to close relatively quickly too since you aren’t forced to wait for a mortgage lender to approve or disapprove the deal.
Key #2: Avoid Trying to Negotiate with the Seller and Make a Stellar Offer Upfront
We all love getting the best deal possible. Many of us even love to haggle and enjoy the back-and-forth of the negotiation process. But when it’s time to buy your perfect investment property and there’s another investor making an offer along with you, you cannot mess around at this stage of the game. You need to make a stellar offer upfront to let the buyer know you are serious and that you really want their property.
By making a lowball offer, you’ll put yourself at a serious disadvantage. Even if the offer is only a few thousand dollars lower than that of the other investor, the buyer obviously wants to make the most money selling their property so they’re going to accept a higher offer every time – unless it’s a cash offer like we mentioned above.
As you can see, it’s very important to take this stage of the game seriously. Do not attempt to negotiate the best possible deal because you might end up negotiating yourself right out of the purchase. Make a valid and worthwhile offer and you’ll have a much better chance of getting your dream investment property as opposed to walking away with your tail between your legs.
Key #3: Take It a Step Further Than a Preapproval Letter
While a pre approval letter is definitely a great thing to have, you can take things a step further by proving that you unquestionably will qualify for a mortgage. You accomplish this by getting an underwriter’s review of your loan application before you even make the offer.
By having your loan application submitted to an underwriter, they will review all of your credit documents, your assets, and your income. If you meet their standards, you can then present a loan commitment letter to the property seller along with your offer. As long as the offer is attractive enough, the seller will see that you will qualify for the mortgage and basically know that selling their property is a done deal as long as they accept your offer.
It can be tough convincing a property owner to accept your offer over another investor. But if you use the guidelines we’ve shared today, you should have no trouble walking away with your dream property investment every single time.