Expert advice: How to get your offer accepted

August 31, 2021 | Buyers

Joe LaFleur’s top 12 tips to help you buy more properties from our recent multifamily owners event

100Units recently hosted an event for multifamily owners featuring our founder and multifamily investment advisor, Joe LaFleur, presenting tips and important details about how to get your offer accepted

During this virtual event, Joe discussed how it works when you’re presenting an offer to a seller and how to make your offer standout to achieve your goal of buying more properties. 

Join us as we explore Joe’s top tips on how to get your offer accepted by sellers by presenting yourself as the best and most capable buyer in your market. You can also find the link to watch the virtual event in full below.

Send proof of funds to the seller to help you get noticed as a buyer

Tip #1: Proof of funds.

If you don’t have a long-standing relationship with the listing broker or the seller, Joe’s number one tip is to send proof of funds to the seller to help you get noticed as a buyer and separate you from the crowd. 

The highest quality proof of funds is a screenshot of your bank account from your phone, second option is a bank statement and the final option is a letter. Joe discourages buyers from presenting letters because there are millions of letters floating on the internet of fake proof of funds.

“Unless you’re a credibly known quantity or have a long-lasting relationship, every offer, every time when you’re first initiating contact with the listing broker and getting to know them, proof of funds show you have the money,” Joe said.

If you’re not a known quantity, present a list of real estate owned

Tip #2: List of real estate owned.

If you’re not a known quantity where the seller knows what else you own, Joe recommends presenting a list of real estate owned to show a track record that you’ve executed on properties in the past, so the seller feels confident going into contract. 

“The preferred method for the list of real estate owned would be transactions with similar buildings in the same market, but at least show a track record of what you’ve executed,” Joe explained. “I would rather see somebody with a duplex or one building that’s proven legit than some long list of selling $2 billion dollars worth of assets with some supposed group. I would put more emphasis on somebody’s actual execution on a building on their own than what they did with a group,” concluded Joe.

Pick a qualified buyer’s agent who's well-versed in transactions

Tip #3: Work with qualified buyer agents.

Joe’s next tip is that when you’re engaging with a buyer’s agent and they’re representing you, how they come across is how you’re going to come across, so it’s incredibly important that you pick a qualified buyer’s agent who’s well-versed in transactions, similar to the kind of deal you’re trying to buy.

“To give you one past example I’ve seen, we had a residential buyer’s agent that sent the contract for an offer on an apartment building on a residential contract which is not even applicable or legal. The time frames given for financing and the expectation of loan-to-value was so outlandish that the seller and I couldn’t take it seriously as a buyer. Unfortunately for the buyer, they turned out later to be a very qualified individual, but because of the presentation, they were not taken seriously,” shared Joe.

If you’re going to use a buyer’s agent, make sure they’re well-versed and well-qualified in handling multifamily investment transactions.

Provide professional references of past sellers, brokers and lenders that you’ve closed transactions with

Tip #4: Provide professional references.

If you need to give the seller confidence in your ability to execute, Joe recommends providing professional references of past sellers, brokers and lenders that you’ve closed transactions with to show you can execute on a deal.

“This is one of the things I try to check on any buyer who is going into contract. I called their references and asked how it was to work with the buyer in question and if they closed at the contract price,” said Joe. “Make sure you have good, qualified references that are able to execute on the type of transaction you’re going after.” 

It's important respond fast and move quickly when you’re in a transaction

Tip #5: Respond fast.

Joe stresses the importance of responding fast and moving quickly when you’re in a transaction. 

If you take too much time to respond to the seller during the transaction, two poor outcomes can occur: 1) You miss the deal because the seller went back to another buyer who does respond quickly and they end up getting it or 2) The seller gets the impression that you take a long time to do everything, so they’re very hesitant to go into contract because they feel like if you take this long just to respond to an email, how long is it going to take you to engage a lender or execute on due diligence? 

“You must move quickly, there’s no time to be lollygagging around waiting for your attorney to come back while you think about something or go on vacation. Remember, you’re building a reputation and if you want a reputation to be able to execute, speed is very important,” Joe said.

For seller financing, be very careful and ask in a way that shows you don’t need it

BONUS TIP: Be careful how or even if you ask for seller financing.

When it comes to asking for seller financing, Joe says to be very careful and ask in a way that shows you don’t need it, it’s simply an option on the table.

“I’ve had this happen on a number of transactions where a buyer came in, and the first thing they did was ask for seller financing. The seller did in fact own the property free and clear, but it gave the impression to the seller that the buyer had some reason that they couldn’t get traditional bank financing. They had something hidden in their past—bankruptcy, bad credit—and that’s the reason they were asking. Then when we went to a more traditional offer, the seller was very hesitant to move forward with that particular buyer,” explained Joe.

Do not talk poorly about the property when walking it with the seller

Tip #6: Do not talk bad about the property.

Especially on smaller, self-managed properties, Joe suggests not talking poorly about the property when walking it with the seller or the seller’s staff. 

“Stick with the positive as you’re talking. Even if you notice things that you don’t like, you don’t need to bring it up. Make sure you’re there to leave a good impression with the seller and their staff,” Joe concluded. 

If you’re fully committed to a deal put down some non-refundable money

Tip #7: Non-refundable deposits.

If you’re fully committed to a deal, Joe highly recommends going ahead and sticking some non-refundable money down. Sellers are often concerned about wasting time and this shows full commitment on the side of the buyer. 

“If you’re willing to walk away from money, it has a massive impact on getting deals, especially if you’re in a competitive situation with five other buyers. Putting down non-refundable money on day one shows the seller you’re absolutely serious and committed to the deal and it makes a huge impact,” Joe said. 

Committing to a short due diligence period puts a much more favorable appearance on your transaction

Tip #8: Short due diligence period.

Joe says that committing to a short due diligence period puts a much more favorable appearance on your transaction to the seller. It allows the seller to see you’re confident and you want to execute quickly on your properties.

“It’s a matter of executing quickly and knowing your vendors, knowing when they can turn things around and actually doing it,” explained Joe.

No financing contingency gives the seller trust that you are confident in your ability to get financing

Tip #9: No financing contingency.

As we’ve seen a lot of buyers waving their financing contingency because the capital markets are so readily available, Joe explains that no financing contingency gives the seller a lot of trust that you are confident in your ability to get financing.

Sellers want to make sure that they’re only going under contact with a buyer who can fully execute and not only can, but that are willing to put their money where their mouth is and not have a contingency on that because they’re so confident in their ability.

“A couple of things that you should do in this scenario to defend yourself as a buyer is, first, put in an additional non-refundable deposit with the right to extend closing so in case you are getting a loan and you need a little extra time, you automatically have that in the contract,” Joe explained. “My other recommendation is to make sure you have additional equity raised for the deal because the worst thing that can happen is the lender may come back and reduce your loan to value and then you just need a little extra equity to push yourself over the top and close on the transaction,” concluded Joe.

When you go to closing, close quickly for the best chance of securing the deal

Tip #10: Close quickly.

When you go to closing, Joe recommends that you close quickly, especially when you’re dealing with sellers who have executed and close fast when they purchase property. Their anticipation is that you’re going to be closing as fast as possible and put it in the contract.

“If you’re concerned and you’re saying, “Well, if I do my due diligence quickly, I can execute within three weeks. Then I’m getting a loan, so I know it’s going to take me 50 days.” Don’t put 75 or 90 days to your closing, put 60. Put in the right to make an additional deposit that’s non-refundable and extend closing as a backup plan that you need,” Joe advised. “That’s just in case because the seller knows you’re fully committed, you’re willing to put money at risk to get this extension. Go in there and close as quickly as possible.”

Don't re-trade deals unless something completely unknown comes up that's highly significant to the deal

BONUS TIP: Don’t re-trade the price.

Joe stresses the importance of not re-trading deals unless something completely unknown comes up that’s highly significant to the deal.

“Once you get a reputation for re-trading, they’re going to anticipate that you’re going to be re-trading again and be much more hesitant to sign a contract because they know that as a buyer your reputation is not to execute that same price,” Joe said.

Put in your maximum, best and final offer from the beginning

Tip #11: Submit your maximum offer price.

If you’re looking at a deal, Joe suggests avoiding saving a few dollars by coming in a little low and just putting in your maximum, best and final offer from the beginning. 

“I had situations in the past where I had buyers come in at a lower, initial offer, and then be ticked when they didn’t get into the best and final or get a counter offer, only to find out it’s sold. If you’re coming in, come in strong, don’t leave any money sitting on the table. Figure out what your maximum number is and come in at that right from the beginning,” Joe said.

Backup offers don’t cost you anything, don’t hurt you and put you second in line

Tip #12: Submit a backup offer.

For Joe’s final tip, he highly recommends submitting a backup offer. Backup offers don’t cost you anything, don’t hurt you and put you second in line in case you get a chance to pick up that deal.

“If the seller’s working with a buyer asking for a retrade or extensions and they have another more qualified offer from you, it puts them in a position of choice to dismiss the first person and go with your offer. The only way to do this is to have submitted the backup offer in writing with proof of funds beforehand, showing that you’re ready to go” Joe concluded.

At the end of his presentation, Joe opened the floor to answering questions from the attendees at the event


At the end of his presentation, Joe opened the floor to answering questions from the attendees at the event. We compiled the highlights of Joe’s answers from the Q&A below that we thought would be most beneficial for buyers: 

Q: How many days should we give for due diligence? 30 days, 40 days?

A: Whatever the minimum is that you can execute on because it’s going to depend, do you need a phase one? Do you need phase two? Are you just doing an inspection? I mean if all you’re doing is literally a property condition report and you just need to walk all the units, you can do it in four days, so it depends on what is the minimum amount of time you can execute on. If you need a phase one, you’re probably talking three weeks and it’s up to you as the buyer to move quickly. If you wait two weeks and then order phase one, it’s gonna take longer, but you didn’t order it the first day.

Q: Usually these deals say 75% LTV, with a financing contingency. In this market, how often are you seeing no financing contingency on a $1.5 to $2 million building? Is that the norm or is that a one-off?

A: I would say in today’s universe as far as what I’m seeing on a regular basis, the financing contingency is probably about 70% of the deals that buyers are asking for and 30% of the buyers are saying no, I don’t need it. The extension to closing with a non-refundable deposit if there is no financing contingency, a lot of buyers put that in because it gives them a little extra time in case something happens with the lender where they automatically have the right to extend. Typically, the lender is only going to need a couple weeks if you did what you were supposed to do as a buyer, the max they’re going to need is a couple more weeks to execute. It’s also important to understand that just because the contract is not contingent on financing, that doesn’t mean you can’t get financing. The contingency has to do with the contract and your deposit. You can go get 100% financing, that’s on you as the buyer to go do whatever you feel is the best way to fund the deal.

You can watch the virtual event in full here

Many thanks to all of our attendees for joining us for this awesome multifamily owners event. We appreciate everyone’s participation and enthusiasm and we hope you found these tips helpful in making you well-armed to take on anyone as a buyer. Now go out and execute on some successful multifamily deals! 

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