As a real estate investor in Washington DC, you’re likely looking for the next budget-friendly rental property. The property you want might not always be listed at a great price, or even at its fair market value. If you have your heart set on a home that appears to be overpriced, this does not necessarily mean that it is out of reach. Even though making an offer on a property that is overpriced will probably be difficult, it is still possible to make a winning offer by using a few smart tactics.
Determine the Fair Market Value
A comparative market analysis is one of the best places to start if you believe that a property you are interested in is overpriced. Finding comparable properties that have recently sold in the neighborhood is the best way to ascertain a property’s fair market value. The length of time the property has been listed is another important consideration. It’s safe to say that a property is overpriced when it has been on the market for a while or is listed higher than comparable recent sales.
As you conduct research, gather all the data you have into a folder or file. If you submit an offer, having supporting documentation for your valuation of the property might be useful.
Talk to the Seller
Speaking with the seller if you can is another step in placing a bid on a property that is overpriced. There are a variety of reasons why a listed property might be overpriced, from the seller simply not knowing how to value their home to using an inexperienced or opportunistic seller’s agent. Additionally, the seller might not be solely motivated by financial gain. You might be able to determine the seller’s motivation to sell their house and why they listed it if you make a few specific inquiries. If the seller is in a rush or has other priorities besides obtaining a high sales price, you may have the opportunity to negotiate a lower price.
Make an Appealing Offer
You must give the seller a good reason to accept a lowball offer when you are bidding on an overpriced house. One tactic you can employ to make your request stand out is to provide rewards or alluring terms. Flexible closing date as well as your letter of mortgage pre-approval may be included. To sweeten the deal, you could also provide a sizable earnest money deposit or fewer contingencies.
If the seller is not financially motivated, consider writing a letter describing how you intend to maintain the property or your vision for its future. When a seller is hesitant to sell, they may have a strong connection to their home, so If they believe a Washington DC property manager will take good care of their beloved home, they may be more likely to do so. To help them let go a little easier, try to show them the home will be enjoyed by a nice family or young professional. If your deal is one of several, these factors may help distinguish yours from the competition.
Hire an Experienced Buyer’s Agent
You must work with a skilled real estate agent if you want to have a good chance of convincing a seller to reduce their asking price on a property. You’ll require assistance in negotiating with the seller and guidance on when to back out. Even if you do everything you can to make your offer appealing, sellers of overpriced homes are unlikely to accept your first offer. With a skilled agent on your side, you will be better equipped to participate in multiple rounds of negotiation without the process taking up all of your time.
Additionally, if you decide to back out of the deal, your real estate agent will be able to support your choice. Some sellers won’t change their price, even if it’s much too high. Even with the assistance of your real estate agent, if you’ve given it your all and are still having no luck, it’s probably time to move on.
You can approach any property you believe would make a wonderful rental home with more assurance if you use techniques like these. Even so, it can take a lot of time to manage all of your Washington DC rental properties at once, negotiate with sellers, and complete numerous comparative market analyses. Why not hire someone to handle those duties on your behalf? At Real Property Management Washington DC, 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 202-813-9993.
Originally published on May 5, 2021
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