Making the lowest offer on a property is part strategy and a bit of guesswork. Sometimes a real estate investor will offer say, $200,000 for a unit and it’s accepted the moment the offer was presented. Was the offer too low? Would the seller have making the best offeraccepted $190,000? Maybe even $180,000 and take a few days to think about it? That is in fact a $20,000 spread and the investor thinks he just “lost” $20,000.

And that’s true to a point, would the seller take less and if so did the investor leave money on the table that could have padded the profit margin?

When making an offer, at some point after buying and selling a few properties, the investor has a pretty good feel for what the seller will likely accept. Yet there’s always the “X” factor: the individual motivations of the seller. As a property owner lists a piece of real estate, there’s quite a bit of research done beforehand, at least there should be. Pricing the property at the right price means getting the most from the sale without letting the property sit because the price is too high. Yes, if a listing doesn’t get very many views the owner can always lower the price and that’s what happens. Regardless, forethought is required and guessing isn’t part of the game.

An investor might know that similar properties in the neighborhood go for such and such a price per square foot and that’s the starting point for negotiations but the seller’s emotions are the unknown tidbit. Does the owner desperately need to sell? Does the title report show a Notice of Default? Loss of job? You can do all the research you want but until you figure out the true reasons why the seller is selling, all you can do is continue to do what has made you successful: keep doing what you always do.

When evaluating a project and the numbers work at $200,000 there’s no reason to fret. You did your research and the math worked out and you carry on. You’ll never know if the seller would have accepted less or not. Make the deal and put your profits in the bank.