No Comments

Important things to remember when making an offer for a real estate investment property (2019 Update)

People who are already decided to buy a house try to secure a pre-approved loan to finance their chosen property. Once they get this, they proceed with the task of house hunting. Looking for the best real estate investment property can be very challenging for most people; however, this process can be extremely fun and exciting as well. After all the searching, an offer should be made for your chosen property.The offer made by the prospective buyer marks the first step in a real estate transaction. This negotiation stage usually comprise of the buyer’s offer as to how much he is willing to purchase the property, his financing terms, and property inspection contingency.

Purchase Price

There is no standard pricing to follow when it comes to investment properties. Value of houses and real estate properties vary depending on location and other relevant factors. Offer for purchase price of the best real estate investment you’ve found should be carefully weighed and thought of. To make a good price offer, keep in mind that it has to be realistic. This means you have considered the value of other houses in the vicinity and make an offer based on the current value of nearby properties. At the same time, you need to be aware of the current market trends and local conditions affecting real estate transactions.

If there is a high demand for investment properties in the area that you’ve chosen, you need to make an offer that’s competitive; this is because a lot of other buyers are possibly bidding for the same property. If you want the property badly enough, then you need to bid wisely so you can be in the forefront of the bidding war. If, however, there is very low demand for properties in the said area, bid accordingly, leaving a lot of room for future negotiations.

Financing Terms

When you’ve found the best real estate investment property, you have to specifically indicate your serious intention to acquire the property. By mentioning to the seller that you have a pre-approved loan, you are giving yourself due advantage over other interested buyers who don’t have a pre-approved loan. If your payment for the house you want to buy is dependent on the sale of your own property, you want to clearly indicate this as well. This is just fair for the property owner especially if you will keep them waiting for a certain time until you’re able to sell your own house. If this is the case, you might want to enter into an agreement that you are willing to have a particular time frame to pursue your offer. Setting a deadline will be most fair to the owner of the property that you are eyeing.


Lastly, the third element of a good offer is to include a contingency clause that will allow you to finalize your offer only after you’ve gained reasonable satisfaction in inspecting the property. Third party inspection reports are basically for your protection as buyer of the property. This will avoid having to spend a fortune in repairing certain faulty parts of the house which may be discovered only after the final negotiation or, worst, after you’ve paid for the property. Inspection reports will serve as your basis to demand performance of certain conditions during the negotiation process.

While these three are the basic elements of a good real estate offer, there are still other things that you can include to acquire your best real estate investment property. Closing costs, for example can be shouldered by the seller if you wish to include this as part of your concessions. If you are among those people who don’t have a pre-approved loan, disclose to the seller that you want a financing contingency. This contingency is when your purchase is dependent upon the approval of a mortgage. You should also indicate the realistic term and rate of the mortgage.

When making your purchase offer, don’t forget to indicate a deadline when you expect to receive a response from the seller. A three-day allowance would be reasonable enough. And lastly, make sure that everything is in black and white. Put everything in writing so that both parties will honor their commitments and agreements.