Hi, Peter Jones, author, property investor, ex charted surveyor. And I was with a mentoring client on Saturday and one of the questions which she specifically asked me was “How do you pitch an offer? Is it just a matter of making an offer 10% below asking price? Is there a point at which it becomes cheeky?”
Actually, that is not the way that I think about making an offer on a property at all. The best way to make an offer on a property is to work out what the figures mean to you, and to work out what you can afford to pay. Now, it’s an obvious thing to say, but you’d be surprised how many people are caught up in the idea that perhaps I’ll come up with a figure which is going to upset the estate agent, or maybe they’ll think it’s gunna be better just to take a percentage off the asking price.
So, what I would always do is, depending upon which strategy I’m following, I would work out what the property is going to be worth, for example after I’ve done a refurb. Because if I know what the property is going to be worth once I’ve done the refurb, I can then work out the refurb costs, I can work out how much profit I need in the property, and I can start working back from that figure. And whether it related to the asking price or not is really of no concern, because if you think about it, we don’t even know how the asking price has been arrived at. Is it a figure which an estate agent has come up with through using comparable evidence and doing careful research in the area? Or is it just a figure which a vender has told the estate agent to ask for based upon the vender’s own bias? Or their own lack of knowledge? Or their own ignorance, we could call it? There can be many, many reasons why an asking price is an asking price. It doesn’t necessarily relate to value.
So, the key thing is, know why you want the property, know what the property is worth to you, and then make your offer.
Until next time, here’s to successful property investing.
Peter
Peter Jones
(ex) Chartered Surveyor, author and property investor
https://thepropertyteacher.co.uk
PS. By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same.
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