The Maximum Allowable Offer Formula

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You’re negotiating with a seller. His price is too high. Your price is too low. You’re hungry for a deal. What do you do? Do you just give in and pay the seller what he’s asking? What happens to your bank account in situations like this? Does it suffer?

Knowing your limit on the offer is essential to creating and sustaining a profitable real estate business. Newbies make the mistake all the time of paying more than they should for a house in hopes that they can make a few bucks.

The better strategy is to KNOW YOUR NUMBERS before you ever enter into negotiations with the seller, and know when to stop. You should never pay more than MAO [Maximum Allowable Offer] and this course will teach you why.

If you’ve experienced this scenario before, then this Cheat Sheet IS MADE FOR YOU

is zillow accurate

A seller lead calls in. Based on the initial conversation she seems motivated. You’ve got a HOT ONE! Since you’re a newb, you get overly excited and wanted to lock this deal up before she calls the next investor on her list. So what do you do?

Do you head straight over to Zillow, find the “Zestimate” and use that to come up with an offer? Guess what? That will get you into trouble EVERY TIME. Zillow’s magic Zestimate doesn’t take everything into consideration. For example Lot size, year built, and proximity to the subject property.

Everyone has become reliant on the Zestimate these days because it’s a fast and easy number to reference. Ultimately, a certified appraiser or any investor with sense is not gong ot use Zillow to determine the market value of a property. There will be more in depth analysis deon on this property first.

What happens is that you shoot high, and overpay for the property. Then everything rolls downholl from there. You get resistance form your buyers, you look incompetent, you’re not building credibility in your marketplace, and you will lose the deal.

Paying the right price for a property and offering it at the right price is what will keep you in the game. Making offers based on Zestimates because you’re unwilling to do the research necessary will feel like running up an escalator after a while. Do your research and make sensible offer that your cash buyers will love you for. That will keep them coming back for more.

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