You can benefit from having a system for each of the outcomes that happen when making an offer. Instead of getting the traditional one out of every 25 offers accepted, you could improve that statistic dramatically. Top investors get one out of 6 offers accepted, and some do even better. It is all about taking control. That control starts with understanding what can happen when you make an offer, and it improves dramatically when you develop a standard way of dealing with each possible outcome.
There are five things that can happen when you make an offer. Let’s look at them:
- Your offer is accepted.
- Your offer is countered.
- Your offer is rejected.
- Your offer is neglected.
- Your offer is not presented in writing or not presented at all by the agent.
You will increase your percentage of closing by having a system for each of these outcomes, as outlined below. Further, practice will also teach you how to increase margins.
Your offer is accepted: Once you have a written acceptance of your offer you should send an email with pictures and a deal analysis to everyone on your buyers list. Then you should follow up with a phone call. If you must leave a message, send a text also. It is amazing how many people will respond to a text that won’t respond to anything else. If this gets your deal sold, great! If your deal is not accepted here, you will want to go to some investment club meetings and drop by some buyers who have money. Never accept mystifying answers from anyone. When they say “no,” find out why. “Too much money for this property? How much is not too much?”
Your offer is countered: You gain control here by using the short time you have wisely. Regardless of what happens, you can resubmit your “same” offer every two weeks. As high as 75% of deals that are completed are on offers that were not originally accepted. If their counter offer is way off from yours, stay firm on your original offer by either countering with the same or something very similar. Resubmit again in two weeks. If they tell you the property is under contract, do everything in your power to be allowed to make a “back up offer.” About 60% of accepted offers by investors don’t close. Stay with it. You may still win.
Your offer is rejected: You already have some level of control here because your seller is communicating. Develop a system to resubmit your offer every two weeks. Set a timeline for trying to get an audience with the seller and/or his agent to go over the reality of the situation in a nice but firm way.
Your offer is neglected: You gain control here by having a system for what you do. Top investors automatically resubmit their offers every two weeks or so just the way they wrote them.
Your offer is not presented in writing or not presented at all by your agent: Ouch! Here you can gain a lot of control by creating an offer template with your agent that gives you what you want, such as the right to assign the offer and a 15-day due diligence inspection clause. Have everything pre-signed and initialed so that your agent only has 4 variables to fill in. Those variables are the date, the seller, the property address, and your offer amount. Since this makes it easier to submit your offers in writing, you will virtually eliminate “phantom offers.”
SUMMARY: Since there are only 5 things that can happen when you make an offer, it’s easy to create an automatic method or system for dealing with each possibility. By doing this, you can improve both the number of offers you get accepted and the profit you make on each one.