You are probably always looking for your next affordable rental property as an investor in Charleston. However, there are times when the property you want may not be listed at a great price, or even at fair market value. If you have your heart set on a home that seems to be out of your price range, it doesn’t necessarily follow that you won’t be able to afford it. 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
One of the best places to start, if you believe that a property you are interested in is overpriced, is to conduct a comparative market analysis. To determine a property’s fair market value, it is advisable to find recently sold comparable properties in the area. A good idea is to find out how long the property has been on the market. The property you’re interested in is probably overpriced if its listing price is higher than that of comparable recent sales or if it has been on the market for a long time.
Create a folder or file for all the research-related information you collect. In the event that you make an offer, supporting documentation for your valuation of a property could be useful.
Talk to the Seller
If possible, you should also speak with the seller before submitting a bid on an overpriced home. 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. The seller might not only be motivated by monetary gain, as well. You may be able to determine why the seller listed their home and how motivated they are to sell by asking a few detailed questions. You might have a chance to negotiate the price down if the seller is pressed for time or has goals other than obtaining a high sales price.
Make an Appealing Offer
You must provide the seller with a compelling argument for accepting a lowball offer when bidding on an overpriced house. One strategy you can employ to make your request stand out is to offer incentives or favorable terms. You may also include a flexible closing date along with your letter of mortgage preapproval. To sweeten the deal, you could also provide a sizable earnest money deposit or fewer contingencies.
If the seller isn’t financially motivated, think about writing a letter outlining your plans for the property’s future or outlining how you will take care of it. Sometimes hesitant sellers have an emotional attachment to their homes, and they may be more likely to sell if they believe a Charleston property manager will take good care of it. To help them let go a little easier, try to show them the home will be enjoyed by a nice family or young professional. These features could make your offer stand out from others if it is one of many.
Hire an Experienced Buyer’s Agent
Employing an experienced real estate agent will vastly improve your chances of convincing a seller to reduce the price of an overpriced property. You’ll need someone to assist you in negotiating with the seller and advise you when to back out. Even if you’ve done everything possible to make your initial offer appealing, sellers of overpriced homes are unlikely to accept it. You will be better equipped to engage in repeated back-and-forth negotiations with an experienced agent by your side without the process taking up all of your time.
If the time comes to back out of the deal, your real estate agent will be able to support your choice. Some sellers are unwilling to lower their desired price, even if it is excessively 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.
Using these strategies, you can boldly make offers on any property you believe would make an excellent rental home. However, it can take a lot of time to manage your Charleston rental properties, negotiate with sellers, and complete multiple comparative market analyses at once. Why not employ someone to assume these responsibilities on your behalf? At Real Property Management Charleston, 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 843-900-4061.
Originally published on May 5, 2021
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