I would feel a lot more comfortable with sending blind offers if:
1. I knew that it was common for other retipsters to reject buying a property once we actually took a look at it in detail.
2. I had an idea of what I would say in that situation. "Sorry, but after looking your property over I actually dont want to buy it, sorry for sending you a signed contract."
Any thoughts?
"After doing our final due diligence on this property, we've found it doesn't fit our investment criteria because of XYZ (note: you're not obligated to give them a reason, but you can if it makes both of you feel better). As such, we won't be able to move towards closing and are terminating our offer to buy this property."
You could also just say that your cash position has changed and you no longer have the liquidity to proceed with closing.
I'm sure there are other clever ways to phrase this, but this kind of explanation has worked for me.
As long as your blind offer clearly spells out that you have the right to do this, there's not really any need for further conversation about it. They can get mad if they want, but most people will just accept it and move on. It also helps if you deliver your decision with authority and confidence. You're not asking their permission to cancel it, you're telling them that it's cancelled.
Thanks Seth! Great Info!
on first contact after they received the blind offer, I make sure to let them know, that I still need to make sure the property is "buildable". I target residential lots, so this is reasonable. You could say something similar. "I need to make sure the property meets my investment criteria, the offers I make are based on general property information, but further review is needed before I can move forward"
In one example, I had forwarded the contract to the title company, and told the seller, I needed to visibly inspect the property before I approved to move to closing. On that property, it was in a great neighborhood, but the property had a steep slope, and it would be cost prohibitive to build. I mentioned to the seller that I could not buy due to this reason, he tried to convince me the property was buildable, but ultimately it was my decision not to move forward.
@Christopher-White ask if they would be interested in you wholesaling the property. No sense in letting it slip thru your fingers.
You can offer a much higher price for the owner to grab their attention and possibly make 5-20k off the wholesale with little no risk involved since you are not purchasing the property.
Worst case they say no best case you make a profit when it sells and you still all your capital for that perfect parcel
I try to put in our blind offer letter three things like this:
1) ".... we are looking to buy a few properties in your area"
2)"... subject to the property meeting our investment criteria"
3)" ... Buyer my cancel at anytime prior to closing by providing notice to owners"
Those give me an easy transition into ether one of the reasons Seth mentions above.
If the property is awesome (great access, etc.) and I realized later I just miss-priced it or I just don't have the capital, etc. then it goes something like: Thank you for your response. We actually sent about 1,000 letters to owners in your area / county for similar sized properties. We typical get back only or a few responses to letters we've sent. In your area, this time. the response were unexpected stronger and we've already committed to buying the number of properties we had hoped to be able to buy. If one of the acquisitions falls through for some reason, or we decide we can invest in an additional property in the area, we'll keep your contact information and can reach out to you.
If the property has attribute issues (lack of access, surprise number of owners or an undivided interest (UDI) ownership), then I can explain that we only buy property that has legal road access or is wholely owned by the person with whom we are dealing.
In fact, when I send a mailer, I import the CSV file into my Podio app and if I get an accepted letter or a voice mail back for a property I do not want to buy, I just find their record in my Podio Sent Mail app and pick one of several pre-canned responses (which in include the two above) and Podio generates cancellation letter or e-mail (if I have an email address from the seller response) with that as the reason for the cancellation.