Real Estate Offers: Quality Over Quantity
By JD Esajian on June 23, 2014
The nature of the real estate business is such that only 10% of the offers you make are accepted. That being said, there is the belief by many newbie investors that to increase their chances they should increase the number of offers they make. This is the worst thing you can do. Instead of concentrating on properties that you like, are in your price range and you have actually seen you start making blind offers in the hope it is actually accepted. Eventually, one of these offers will get accepted and you will be forced to either follow through with the deal or find a way to back out. Neither scenario is ideal and this could all have been avoided if you just stuck with quality over quantity.
It is always better to pursue the right deals than to try to force deals that aren’t really there. All it takes is one or two bad deals to have a major impact on your business. If you are blindly making offers on every new property that hits the market eventually you will get one accepted. If you decide to back out your realtor will lose faith in you as a buyer and will stop working with you. If you find that the property is moderately acceptable and you move forward anyway you are starting the process on the wrong foot and instead of working from a position of strength you are scrambling to scratch a profit.
There will be rough patches with most investors along the way. It is during these times when deals seem difficult to come by and even poor deals start to look pretty good. Inevitably things will turn around and instead of biding your time and holding off you get involved with a bad deal that is time consuming and wallet draining. If you stick to your game plan and strategy deals will eventually come your way that you can make money on. There is nothing wrong with changing your target market or switching up the way you view the business but when you start to chase deals that aren’t really there is when trouble happens.
Another downfall with making offers on properties you don’t want or know anything about it that when really deals come around you may not be in a position to act on them. If you have your capital allocated to other properties there may not be any left when you are presented with a deal you really want. You will be forced to work twice as hard for half the profits on deals you never really wanted and be miserable the entire time, more miserable than you were when you didn’t have any deals. The real estate business takes time and patience. Once you go out of your comfort zone the business stops being fun and risk starts to exceed the reward. Stick with what you know, what you like and what you are good at. Deals will come around if you continue to work hard and network yourself.
The number of offers you make is not nearly as important as the number you get accepted. Working on the right deal is always better than working on any deal.