Figuring The Amount Of The Offer

Even experienced real estate investors need to do their due diligence and online research in order to make informed and educated offer amounts to property owners. If an offer is too low it will be discounted immediately as an attempt to "lowball" the property owner during negotiations. On the other hand, if an offer is too high the real estate investor might not see any profit from the deal. There is a fine balance that needs to be reached in order to both have the offer accepted and accrue top dollar for the deal. Years of experience will allow you to get closer to the right ballpark number, but in the meantime here are some key tips you can use to help you.

1.Do not offer more than 5 to 25% of a somewhat conservative current market value.

Browse search engine results for the subdivision name, the county and the state. In most cases you will find information about the other properties that are available in those areas. You can also see what other people are selling the properties for. Sometimes you will even find actual sales information. You can also check with the county to get sales information. According to real estate appraisers, you should discount anything that is older than six months. This will not give you an accurate portrayal of the market. Then, for properties that are sold recently, take those figures as the basis for your property value. Your offer should be 5 to 25% of those figures. In the current economy, staying on the lower end of that will yield higher results.

2. Offer on the lower end in declining markets

If property values are going down, from the time you buy the property to the point in time where you sell the property, there will be a few days or weeks that pass by wherein you might be losing your profit. You do not want to buy property at around 50% of market value, and then sit around and wait until that market value goes down so you do not see the same amount of profit.

3. Offer 15% to 35% of sales prices.

You know that online sales sites are around the lowest price you will see property being bought for. Therefore, you can offer a larger percentage of that sales price because chances are you will get at least the same amount of money for your property as it would go for on Ebay or another online land auction site.

Copyright (c) 2010 Jack Bosch

About the Author:
Jack Bosch began investing in land in 99. Along the way he discovered a secret way to buy land for pennies on the dollar and sell it for thousands. Jack continues to invest in property but now teaches his system! To claim a FREE Special Report about how you can buy Land for Pennies on the dollar go to www.Landprofitgenerator.com/jack-bosch

Article Originally Published On: http://www.articlesnatch.com

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