You’re probably looking for your next great affordable rental property as an investor in Honolulu. However, the property you desire may not be listed at a reasonable price, or even at its fair market value. If you have your sights set on a home that appears to be overpriced, it does not necessarily mean that you will be unable to acquire it. Making an offer on a property that is overpriced will probably be difficult but it is still possible to do so by employing a few smart strategies.
Determine the Fair Market Value
A comparative market analysis is one of the best places to begin if you believe that a property you’re interested in is overpriced. To determine the fair market value of a property, it is best to locate recently sold comparable properties in the area. Additionally, it is prudent to determine how long the property has been on the market. If the property you’re considering is priced higher than comparable recent sales or has been on the market for an extended period of time, it is likely overpriced.
As you conduct research, organize the information you collect 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
In addition to submitting a bid for an overpriced property, if possible you should also speak with the seller. There are numerous reasons why a property may be overpriced, ranging from the seller not understanding how to price their home to hiring an incompetent or greedy agent. Additionally, the seller might not be solely motivated by financial gain. You might be able to learn the seller’s motivation for listing their home by asking a few specific 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
When making a lowball offer on a home that is overpriced, you must provide the seller with a compelling argument. One strategy you can employ to make your request stand out is to offer incentives or favorable terms. A flexible closing date and your letter of pre-approval for a mortgage could be included. To sweeten the deal, you could provide a substantial earnest money deposit or fewer contingencies.
If the seller is not money motivated, try writing a letter describing how you plan 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 Honolulu property manager will take good care of their beloved home, they may be more likely to do so. They might be able to let go a little easier if you try to make them imagine a nice family or young professional enjoying the house. These features could make your offer stand out from others if it is one of many.
Hire an Experienced Buyer’s Agent
Employing a knowledgeable real estate agent will greatly improve your chances 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’ve done everything you can to make your offer appealing, sellers of overpriced homes are unlikely to accept the first one you submit. Your ability to engage in repeated back-and-forth bargaining without the process taking up all of your time will improve if you have an experienced agent on your side.
If the time comes to back out of the deal, your real estate agent will also be capable of backing your decision. Even when the price is way too high, some sellers are unwilling to lower it. It may be time to move on if you’ve tried your hardest and are still having no luck, even with the assistance of your real estate agent.
Using these methods, you can convincingly make offers on any property that you believe will make a great rental home in the future. Accomplishing several comparative market analyses, making deals with sellers, and monitoring your Honolulu rental properties at the same time can be time-consuming. Why not hire somebody to assume these responsibilities? At Real Property Management Alliance, 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 808-445-9500.
Originally published on May 5, 2021
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