Making offers that get accepted is the first and most important step of real estate investing. Unless you can negotiate a price that makes you profit, you cannot succeed as a real estate investor.

These tips will help you make offers that get accepted when buying houses.

If you are a home owner looking for your dream home, these tips will also help you.

Obviously, the way you negotiate depends on who the seller is. If you are buying directly from a motivated seller, you negotiate differently than when buying from a bank, or through a Realtor.

Let’s look at each scenario.

1)      Buying from motivated sellers

This is the one I find easiest. As a real estate investor, before making any offer, you must know the fair market price after repairs, repair costs, mortgage balance and the asking price.

Your offer is determined by these four factors.

Assuming the mortgage balance allows it, your offer may not necessarily be what the seller is looking to get. Of course before I can talk to motivated seller, I already have all the numbers and have determined the deal can work.

I prefer to do it on the phone whenever possible. Say they want $65,000 on a $100,000 house that needs repairs. Even though I have the asking price already, I will ask:

 “What is the lowest price you can accept for this house?”

“$65,000 dollars?? Hmm”

I can pause for at least 1 minute. This works like magic.

Then I’ll ask “is that the best you can do?”

I will then listen as the motivated seller talks his way down. Never sound excited even when it sounds too good. By the end of the conversation, I will still tell them I need to look at my numbers and will get back to them later.

Then I will call them back and make my offer. Or I can make my offer in writing. If their asking price is still too high for me, I will still make a lower offer, while still looking at the needs of the seller.

Most of these offers will get accepted.

2)      If motivated seller has a Realtor

Sometimes motivated sellers may have properties listed with a real estate agent.  As a real estate investor, I never make offers through a Realtor. I tell the motivated seller I can buy the house, but due to real estate commissions, my offer may not work for them. I ask them to give me a call when the listing expires.

Usually they will call their Realtor and ask them to cancel the listing. Then my offer would work like a motivated seller.

If you are a home owner buying a listed property, then you must make your offers through your Realtor. Unfortunately you don’t have clear information such as mortgage balance, etc.

3)      Buying REOs

When buying REOs, it is important to make sure your contract says you are buying “as is, where is” and you have a clause that covers inspection.

Once you make an offer, the bank is likely to make a counter offer. You can justify a lower price after inspection. Remember that all offers have to be written and go through your Realtor to the listing agent, who then submits it to the bank.

Successful real estate investing not only demands buying houses efficiently, but also selling them quickly. Learn how you can quickly sell your houses even in a poor market using a real estate investor website for selling houses.