30 Days to Real Estate Cash 81
The Offer Formula Of course, we can’t pay the market value for this home and flip or assign it to an investor for a profit. We must come up with an offer that will allow us to get our costs back from a pur- chase and sale with profit to boot. Here are the formula adjustments to the value to come to the price we need to offer: Real estate commission: This is on the selling side. We may sell it on the retail market, and this would require using a real estate agent, which means a 6% commission, in most cases.
OF VALUE
Buyers’ market adjustment: When sellers can dictate the price due to high demand we wouldn’t need to do this, but it’s far more common to have a buyers’ market with buyers requiring some concessions. Frequently, it’s to pay some of their closing costs, and we allow for 3% of the selling price.
Bargaining adjustment: While it would be nice, you usually don’t get your asking price in a home sale, so when we sell it we expect to have some discount to our asking price. We allow 3%, since this is a common average in the area.
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