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I am a beginning real estate investor and do not want to come off as inexperienced when I interact with the seller. The property in question is a lot with a burned house that needs to be cleared. I will be assigning the sales contract to a rehabber/developer and taking a middleman’s fee. The 2007 tax assessor’s value of it was $ 108,000. Average home sales in the town for 2008 are at $ 241,000. A house on the same block in the same neighborhood recently sold for $ 203,000. How much should I ask, considering the demolition costs (of perhaps $ 5K)? How should I be prepared to interact with the owner/seller?

2 Thoughts on How do I go about making an offer on a property that is for sale by owner?
  1. Reply
    Irv S
    August 10, 2011 at 11:21 pm

    You’re ‘in the middle’ here.
    What will your client offer?
    Don’t, as an amateur, try to figure the values & costs.
    (Construction costs are higher today. If a house in the
    area is worth 200-250K, the land might not be worth much.)
    Once you’ve got a price make the owner an offer.

  2. Reply
    August 11, 2011 at 12:03 am

    Since it is illegal to take a “middleman fee” without a real estate license you should be able to have your broker help you with a BPO.

    As a real estate professional I am sure that you know that the tax assessment doesn’t mean anything and has nothing to do with the actual value.

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