Making an Offer on a Property...

Welcome to the latest edition of my weekly newsletter - The Business Owners' Property News - my weekly newsletter for business owners and busy professionals that want to get started in property investing.

In this edition, we look at how to make an estate agent a compelling offer for a property that you've viewed......

The Offer

I have never offered (or purchased) at the asking price on a property. I've always managed to secure a property for lower than asking. That's not to say that I have had every offer accepted.

That would be impossible.

Some have sold for higher than asking price in a hot market, where there are many interested buyers for a really great property.

That's fine - we can't buy them ALL - but we can make sure that ALL that we buy are at the best possible price, aligned to our goals and strategy.

Our offer is always in writing via email - and we make it soon after the viewing. We will have done a lot of homework prior to our viewing and the property will have ticked all our criteria boxes. The viewing is to confirm this and make sure there are no obvious surprises.

Here is an example of a very recent offer email:

Hi Nancy

Thank you for showing me around 123 Anystreet today, I like the property. As you know, it requires work, including new windows and without having done a survey, the roof probably needs some attention too.

My other issue with the property is that it is quite smaller than properties on the road. Recent sales have been around the ￡170k to ￡180k mark for an average of 72sq m properties, whilst this one is 61sq m.

I would like to make an offer of ￡168,500 subject to the usual searches and surveys. As local investor, I can complete quickly.

I attach various documents in support of my offer. I look forward to hearing from you.

Regards

Raj Sharma

Brahma Property

Back up your Offer

Don't insult the estate agent - you will ruin the relationship if you make a derisory offer.

The asking price of this property is ￡185,000. You will notice in my offer there are several reasons why my offer is at ￡169,850.

I mention the condition of the property and the work that's required. This demonstrates your knowledge and experience.

It also mentions the size of the property and sold comparables in the area.

I always use software called Property Data for this which shows you sizes of properties, sold prices and price per sq m achieved. This is invaluable when making properties and again demonstrates that you've based your offer on your research and will give the estate agent and vendor some food for thought.

Back up Documents

Here is a list of the documents that I attach to the offer. This offer is to an agent I've not worked with before, so I have supplied everything. As you get more experienced, there are agents that you've worked with will require very little in support of the offer as they trust you to complete.

• Certificate of incorporation of the company
• ID for all directors (passport or driving licence)
• Proof of funds (either all the funds or 25% deposit)
• Mortgage or bridging decision in principle (if funds are 25% deposit). Essential here to have a great relationship with a broker that can quickly generate you a DIP. Make sure you have onboarded with a broker.

The back up documents will give the agent comfort that you are in a position to buy and complete the transaction. They can tell the vendor that you are pre qualified and a serious buyer.

Follow up

A well structured, polite email will get a response. The agent will either say no as they already have higher offers or they may say that your offer has been put to the vendor.

Always follow up if you have not heard from them. Estate agents are busy and a call or an email may be the nudge they require to take an action.

Pipeline

Has your offer been accepted? If it's a YES, that's great, job done!

If you get a NO from the agent, don't worry. Remember, we can't get every offer accepted - we are building a pipeline. A ridiculous amount of property transactions collapse. Keep following up - you may secure a property even lower than your original offer. We have done this!

During this time, keep VIEWING, keep making OFFERS and keep building your PIPELINE. Don't keep thinking of the offer, don't get emotionally attached to it and keep on taking daily action!

So there we have it - our quick guide to putting together an offer for a property that has ticked your boxes and you want to secure for a good price!

And, there's an example offer email for you to use and test out!

Remember, on Brahma Property's 12 month training - The Business Owners' Property Programme - we focus on making offers, creating a pipeline and holding you accountable for your weekly actions.

Call me today on 0121 647 7090 or email [email protected] to find out about our MONEY BACK GUARANTEE on the programme!