If you’re making an offer on a house and offering MAO (maximum allowable offer) to your sellers, you’re definitely offering TOO MUCH!
Here’s why I say that. You’re going to get caught up in the excitment of talking to motivated seller, and you may even think that they’re going to get away from you without signing your contract. Some investors are even embarrassed to offer their Maximum Allowable offer, much less anything LOWER than that!
So they just go ahead and blurt out their maximum offer with the first round of negotiations. BAD IDEA!
You see, seller always ask more for the house than what they’ll accept, and buyers always offer less than what they’ll pay. Learn the psychology behind negotiating prices with people, and you’ll understand that you don’t have to come busting out of the gate with your highest offer.
When you’re making an offer on a house, the last thing that you want to happen is the seller says “yes” to your first offer. That’s enough to piss you off!! Keep it a secret until you absolutely have to reveal that number.
Check out this short SoundCloud and learn why you should never offer the seller MAO.