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How To Make A Low-Ball Real Estate Offer And Get It Accepted



One of the reasons why I’m always on the lookout for real estate opportunities is because every once in a while, a property will come up that seems mispriced or poorly marketed.

In 2014, our current primary residence was being marketed by a retired, out-of-town agent who only got the listing because he was a childhood friend in the 1960s. He had no pictures on the Multiple Listing Service (MLS) and only had a simple one-page, black and white flier.

Because he was not from the area, he didn’t have a network of other agents to blast his listing to. All he did was hope and pray someone made him an offer in an unknown neighborhood.

So I made a low-ball offer that ultimately got accepted after one counter. In real estate, money is often made on the purchase, not on the sale.

It turns out, there was another buyer who was willing to pay $110,000 more than my offer, but I had already sealed the deal with an old fashioned handshake. I know this to be fact because the agent who helped sell one of my SF rental properties in 2017 turned out to be the competing buyer’s agent for my existing property in 2014!

The real estate market is so much less efficient than the stock market. If you are extremely diligent at looking on your own, you should be able to find some deals. And most recently, I found an off-market listing by luck that could be a great investment.

How To Make A Respectable Low-Ball Offer

With the invention of Docusign, it has become extremely easy to submit multiple offers quickly. If you work with an agent, you can submit an electronic offer in under five minutes after she fills out all the basic offer details for you. All you have to do is e-sign with your phone. There is little downside to submitting an offer nowadays.

In 2016, I missed out on buying a property that sold for $150,000 below what I was willing to pay. After that lost opportunity, I decided to pay more attention to my neighborhood real estate market.

Here are the keys to making a low-ball offer without insulting the seller. The goal of your low-ball offer is to not get it accepted at face value. The goal of the low-ball offer is to get the negotiation started.

1) Understand the neighborhood comps. It is vital for you (and your agent) to know all the recently sold comps in the neighborhood over the past 12-24 months. You must then choose the comp that sold for the least on an absolute price basis and a price/sqft basis. This comp will act as your reasonable anchor for submitting a low ball offer, even if the comp isn’t like-for-like.

2) Understand the seller’s background. All good negotiators will try and find as much background information about the seller as possible. You should find out the following:

  • Male or female seller
  • Individual or couple
  • Divorce sale or amicable sale
  • Is the seller currently living in the house
  • The size and type of mortgage
  • Trust sale or regular sale
  • Length of ownership
  • Has the seller already bought another property
  • Is the seller relocating

A savvy agent will keep this information close to her chest. However, you should be able to extract at least 3 – 5 points through normal dialogue. Don’t be so direct and ask each point one-by-one. Instead, come up with some introductory questions like, “Where is the seller moving to?” or “How long has the seller owned the property?” From there, you can expand your data gathering.

One of the key benefits of working directly with the listing agent is that you’ll be able to more readily ascertain all this information. After all, the listing agent is motivated to make you comfortable enough to put in an offer so she can earn a double commission.

3) Understand your city’s listing culture. In some markets, like San Francisco, real estate agents tend to list 5% – 10% below market price to drum up demand. The goal is to create a bidding war where one overzealous buyer overpays.

I remember putting in an offer for $1.48 million for a property in early 2014 when the asking price was $1.19 million. I felt kind of foolish submitting an offer 23% above asking price, but I knew they were underpricing the property. Further, I asked the selling agent to represent me. It turns out, the winning offer was for $1.8 million! I wasn’t even close.

Many cities seem to have a listing culture that tends to list at market price or slightly above market price because they know buyers will try to negotiate them down. The result is a final selling price that is usually lower than asking.

It is easier to submit a low-ball offer in a city with a listing culture that tends to list at market price or slightly above. But even in a market that tends to underprice its properties, you have every right to submit a full offer asking price, despite knowing the seller is hoping for much more.

4) Write a letter. Even if you use my Spray N’ Pray methodology where you’re submitting multiple low-ball offers at a time, you should still come up with a generic letter that discusses how amazing the property is, a little bit about yourself, and how you plan to cherish the property forever.

But if you really care about a specific property and want to ensure that the seller isn’t insulted by your low-ball offer, you must write as personal and heartfelt a letter as possible.

The goal of the letter is to not only make a connection, but to also make it clear that your lines of communication are open. Once you make a seller feel insulted, there’s little chance they’ll come back to the negotiating table.

Long-time owners of a property like to know that they are selling to someone who plans to own the property for a long time as well. Flippers like potential buyers to appreciate the work they’ve done on the property to make it better. Pointing out the details is a great way to make a flipper feel good.

Do not underestimate the importance of recognition. Think about all those times you got a laudatory e-mail from your boss or colleague at work for a job well done. I bet it felt great.

5) Hint that you’re willing to go higher. Your goal as a master negotiator is to anchor at the lowest price point possible without insulting the seller and then meet somewhere in the middle. The way you hint that you’re willing to go higher is through your letter and/or agent. Phrases such as, “We’re looking forward to hearing from you,” or “Please let us know your thoughts,” are effective.

Selling property is a super stressful process because you have so much to lose – your pride, your time, and your money. Therefore, even though a low-ball offer won’t be what your seller wants, if you submit a low-ball offer properly, you will make the seller feel better knowing that at least they have something to show for their efforts.

By meeting in the middle, you will make the seller feel good knowing they got more than the initial offer, even though that was your plan all along.

A Low-ball Offer Was Once A Great Offer Years Ago

One of the best situations for low-ball offers is if the seller has owned the property for a very long time. I’m talking 30 years or more. The reason why length of ownership matters in this case is because sellers are often anchored to much lower prices.

Recall how some parents continue to treat their grown adult children like grade school kids? It’s because, in these parents’ minds, their children will always be “daddy’s little girl” or “mommy’s precious boy.

You know how some old bosses still can’t give you respect, despite you going on to become a boss at a larger firm? It’s because, in the boss’s mind, you’ll always be the intern or the grunt. This is why it’s often beneficial for employees to job hop and reset their image.

Many sellers who’ve owned for decades can’t believe the market has risen so much. As a result, they might feel guilty for trying to sell to someone who has made a connection at such a high price. In other words, as a buyer, you have much more wiggle room to negotiate, especially if the seller didn’t even buy the property in the first place.

For example, the property I’m interested in buying was sold for around $100,000 circa 1950. The listing agent is thinking of asking $1.99 million. Even if I submit a low-ball offer for $1.5 million, that is still a large absolute price gain.

So that’s what I did.

Submitting My Low-Ball Offer With Confidence

Here’s what I found out about the sellers:

  • The sellers of the off-market property are two siblings in their early 70s.
  • The property is in their mother’s trust and they are the trustees.
  • The sellers inherited the trust.
  • The siblings grew up in the place and have fond memories.
  • The mother lived until 104 and peacefully passed away in hospice care.
  • The property also has a reverse mortgage of roughly $500,000. The reverse mortgage was used to pay for her living expenses.
  • The mother had a total of five children.
  • The sellers preferred to sell to a family and not a foreign investor or local flipper.
  • While I visited for a private showing, one of the daughters called to speak to the listing agent. Interestingly, the listing agent put the conversation on speakerphone a room away. I was able to hear the entire dialogue because the listing agent kept coming in to check on me. The daughter was anxious to sell the house and pay off the mortgage and her mother’s outstanding liabilities. She was thrilled to hear that I was interested and that I had a little one.

Even though I knew the listing agent wanted to list for $1.99 million or $765 a square foot, I submitted an all cash offer for $1.5 million or $576 a square foot. The current price per square foot of a home in this condition is roughly $800. Regarding pricing, I hopped into my Delorean and went back 10 years in time.

In my offer, I included a picture of my family and a real estate love letter. In my next post, I’ll share with you the details of my real estate love letter and how you can write an effective one too.

The official negotiation has begun!


Why Real Estate Will Always Be More Attractive Than Stocks

A Golden Opportunity To Buy Real Estate Has Emerged

The post How To Make A Low-Ball Real Estate Offer And Get It Accepted appeared first on Financial Samurai.

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How to Spend Your Coronavirus Relief Check: 4 Smart Options



If you make less than $99,000 (or $198,000 if you’re married), coronavirus relief money is coming your way. President Trump signed the CARES Act into law on March 27, which includes stimulus checks for millions of Americans.

The maximum amount you can receive is $1,200 per adult (or $2,400 for married couples) plus $500 per child under age 17. Individuals making over $75,000 or couples making over $150,000 will see their check phased out by 5 cents for every dollar they earn over those amounts.

It could be several weeks — possibly over a month — before you receive your stimulus money, but now’s a good time to start planning how you’ll use that cash so you make the best of it.

Here’s all of our coverage of the coronavirus outbreak, which we will be updating every day.

Of course, everyone’s financial situation is different, but here are four key things to consider when deciding how to spend your coronavirus relief check.

Cover Your Needs First

If there were ever a time to prioritize needs over wants, this is it. This is especially important if you’ve lost income due to layoffs, furloughs, reduced hours or slow business. Your stimulus money should go toward making sure you have a roof over your head and food on the table.

Create a bare-bones budget and total up the cost of your absolute essential expenses. Then look at how much money you have in your checking and savings accounts — in addition to your pending stimulus check — to get a good picture of how long your money will stretch.

However, don’t wait until you’re in dire financial straits to seek assistance with your basic needs.

“Reach out now if you can foresee problems [paying bills],” said Chris Preston, vice president of corporate relations at United Way Worldwide.

Increase Your Savings

Let’s say you’re still working and bringing in enough money to cover your essential needs. Look to using your stimulus check to bolster your emergency fund.

No one can predict how long this pandemic will last. Less than a month of shelter-at-home advisories has forced industries to change how they do business, and many have all but shut down. The job you have today may not be guaranteed if this crisis continues.

While the typical advice is to have at least three months worth of living expenses in an emergency fund, you might want to bump that to at least six months. Your emergency fund should help you feel financially secure.

Separate your emergency savings from your spending money. A high-yield savings account will earn interest while your money’s sitting in the bank.

Think About Your Future

If your needs are being covered and you have a robust emergency fund, consider spending the money you’ll get from the stimulus bill to set yourself up for a better financial future. 

Taking a certification course could position you for a promotion or new job. Alternatively, you could use the money as seed capital to pursue an entrepreneurial path.

Making a dent in your debt or paying a large bill upfront rather than over time could help you save money in the long run.

You also might want to think about using your stimulus money to cover upfront expenses that’ll help you save money over time. That could mean buying gardening supplies so you can grow your own produce and cut costs on groceries. Or maybe you want to buy reusable products like cloth diapers or a bidet attachment so you can stop buying throw-away goods. 

Help Others

If you’re in a financially stable situation with a healthy emergency fund, another good use of your stimulus money could be to help others.

Use the extra cash to help a family member or friend in need or donate to a reputable charity. Or you could spend your money at local businesses and restaurants — whether that’s through online orders or purchasing gift cards for future in-person visits.

You don’t have to have a financial surplus, however, to find ways to help others. Donating blood, going grocery shopping for an elderly neighbor or troubleshooting teleworking tech for a friend are all ways you can be of service without spending money.

Feeling overwhelmed? Create a budget that works for you with our budgeting bootcamp!

Nicole Dow is a senior writer at The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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Paycheck Protection Program (PPP): Forgivable SBA Loans For 2.5x Monthly Payroll



If you are a small business impacted by COVID-19, including self-employed and independent contractors, you have hopefully been following the developments of the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan Emergency Advance (EIDL) being rolled out by the Small Business Administration (SBA) and U.S. Treasury. Details are still being ironed out, but PPP could cover up to 2.5 months of your payroll costs. Here are some general highlights from the Treasury PPP overview PDF along with some details from the Bank of America PPP application:

Loan Amount = 2.5 times Average Monthly Payroll. “The Paycheck Protection Program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.” In the Bank of America PPP application, two possible options given were to use 2019 payroll or 2019 1099-MISC totals, and then multiple the average monthly payroll by 2.5. So if you averaged $6,000 per month, you can ask for a loan for $15,000. Income over $100,000 annually per employee isn’t covered. Here are some details:

For purposes of calculating “Average Monthly Payroll”, most Applicants will use the average monthly payroll for 2019, excluding costs over $100,000 on an annualized basis for each employee. For seasonal businesses, the Applicant may elect to instead use average monthly payroll for the time period between February 15, 2019 and June 30, 2019, excluding costs over $100,000 on an annualized basis for each employee. For new businesses, average monthly payroll may be calculated using the time period from January 1, 2020 to February 29, 2020, excluding costs over $100,000 on an annualized basis for each employee.

Fully Forgiven. “Funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.”

In my Bank of America, the details are given that it is a 2-year loan at fixed 1% interest. As noted, payments are deferred for the first 6 months. If you use the money in an eligible manner (see below), it is fully forgiven and not treated as taxable income.

Must Keep Employees on the Payroll—or Rehire Quickly. “Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.” In other words, this is supposed to encourage companies to keep employees and is separate from unemployment insurance.

All Small Businesses Eligible. “Small businesses with 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors— are eligible. Businesses with more than 500 employees are eligible in certain industries.”

Businesses are limited to one PPP loan. Each loan will be registered under a Taxpayer Identification Number at the Small Business Administration (SBA) to prevent multiple loans to the same entity. Owners with more than one business may apply for a separate loan for each entity.

Application Dates and Details. “Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10, 2020, independent contractors and self-employed individuals can apply. We encourage you to apply as quickly as you can because there is a funding cap. […] You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating.”

While technically you can apply at any SBA 7(a) lender, as of 4/5 many of them don’t even have any formal application process at all! Bank of America started accepting applications early, but first required both an existing BofA business checking relationship AND a BofA loan relationship as of 2/15/20. They later relaxed the rules to require at least an existing BofA business checking relationship as of 2/15/20. Most banks are limiting the applications to existing clients:

In addition, the US Treasury now has a paper application that you can submit to any eligible lender. I have no idea what will be the best. Small local bank? Mega bank? I would assume that if you have an existing relationship with a bank, they would be able to just deposit the money into your primary business account. But I’ve learned to stop making assumptions in 2020!

The funds are supposed to go out first come, first served, although they may expand the amount available. I’m sure that is not helping the chaos. No documentation was required upfront for BofA, but I would get your payroll documentation ready to submit as soon as they ask for it.

“The editorial content here is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone. This email may contain links through which we are compensated when you click on or are approved for offers.”

Paycheck Protection Program (PPP): Forgivable SBA Loans For 2.5x Monthly Payroll from My Money Blog.

Copyright © 2019 All Rights Reserved. Do not re-syndicate without permission.

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HDFC All Miles Credit Card Review



HDFC All Miles Credit Card Rating
Reward Points                      ★★★              
Travel Benefits                     ★★
Annual Fee                           ★★
Offers & Discounts              ★★
 Additional Benefits            ★★★
Paisabazaar’s Rating           ★★★

HDFC All Miles Credit Card lets you earn reward points on every purchase you make. The accumulated points can then be converted to air miles, which can then be used to book flight tickets in the future. This card accelerates reward earning rate thereby facilitating redemption of rewards for air miles. If you are a frequent traveller, this card can be the right choice for you. Hence to make the decision a lot easier for you, we have given a detailed review of the card that will help to decide if this card suits your needs or not.

Key Highlights of HDFC All Miles Credit Card

  • Get 3 reward points for every Rs.150 spend
  • Earn 2X reward points on hotel bookings, mobile recharge and shopping
  • 1% fuel surcharge waiver on all fuel transactions
  • Avail up to 50 days interest-free period
  • Get revolving credit at a nominal interest rate
  • Avail zero liability on lost card
  • Get you annual fee waived off by spending Rs.15,000 within the first 90 days
  • Accidental death insurance cover of up to Rs.50 lakh


Earn Reward Points on every transaction

Save as you travel, shop, dine and more with the HDFC All Miles Credit Card. Here’s what you get with this card-

●3 reward points for every Rs.150 you spend
●2X reward points on hotel bookings, mobile recharge, shopping etc
●Double reward points on transactions made via All Miles website

All the eligible retail transactions let you earn reward points on every purchase made. In this way, you can surely earn rewards at a faster pace. All the accumulated points can then be redeemed and further converted to air miles for future bookings. It can be said that the card is indeed offering decent reward points when compared to other similar cards.

Read more about HDFC Bank Credit Card Reward Points

Fuel Benefits

With this card you can get 1% fuel surcharge waived off on all fuel transactions. For this-

  • Minimum transaction of Rs.400 is required
  • You can get a maximum cashback of Rs.500 per statement cycle

A majority of cards nowadays offer benefits of fuel surcharge waiver. However if you are exclusively looking for fuel benefits, you should look for other cards that prioritise fuel discounts.

Get your Annual Fee waived off

Just by spending Rs.15,000 within the first 90 days of your card opening, you can get your 1st year’s annual fee waived off. You have the option to renew your membership for free just by spending Rs.1 lakh in a year. This is one of the great benefits that this card provides you with.

Enjoy 50 days of interest-free credit

 With this card you can enjoy 50 days of interest-free credit period. However interest rate of 3.49% will be charged on any outstanding amount carried beyond the bill due date.

Avail zero lost card liability facility

If your card is missing or has been stolen, you need to immediately contact your bank’s customer care for card blocking. Once you report the issue, you will not be held responsible for any unauthorized or fraudulent transactions made using your card.

Is Rs.1000 Annual Fee Justified? 

Well it is true to say that if you compare the benefits that the card offers to other similar cards having the same annual fee, this card surely lacks behind. The reward points offered are good but fails to justify the Rs.1000 annual fee. However, for your reference we have listed below the other fees and charges related to this card.

Primary Features Fees / Charges
Annual Fee Rs.1000
Interest Rate 3.49% per month (41.88% p.a.)
Rewards redemption fee Rs.99 per request
Cash advance fee Rs.2.5% of the amount withdrawn subject to a minimum of Rs.500
Late Payment Charges Less than Rs.100: Nil

Rs.100 to Rs.500: 100

Rs.501 to Rs.5,000: Rs.500

Rs.5,001 to Rs.10,000: Rs.600

Rs.10,001 to Rs.25,000: Rs.800

Greater than Rs.25,000: Rs.950

Minimum repayment amount 5% of the outstanding balance or Rs.200, whichever is higher
Reissue of Credit Card Rs.100

Should you go for this card?

The first question that will come to your mind will be whether you should or should not opt for this card. Hence for your convenience, we have laid down certain points that might help you decide whether this card is the best choice for you. The card is best for you if-

  • You frequently book air tickets online
  • You are more inclined towards earning reward points than availing cashback
  • You are not looking for any category specific discount
  • You are not interested in putting major expenses on your card
  • You are not looking for any welcome bonuses

If the above listed points match your requirements, undoubtedly this card is best for you. If the card fails to match your needs, you can look for other similar rewards credit cards with more benefits and comparatively lower annual fee like American Express Membership Rewards, Citi Rewards Domestic and Standard Chartered Landmark Rewards

Limitations of HDFC All Miles Credit Card 

Although the card provides certain benefits to you in the form of reward points and air miles, there are certain drawbacks attached to it. Some of the limitations of this card are-

  1. The reward points are not that great as compared to other HDFC Credit Cards.
  2. The annual fee is not justified in terms of what all benefits the card provides.
  3. There are no discounts on entertainment, shopping or movies.
  4. If you are a shopaholic, this card is definitely not the one for you.
  5. The card does not offer any milestone reward.
  6. No lounge access is provided by the card.
  7. It does not provide any exclusive discount on air ticket bookings.


Bottom Line

Overall, this card is surely not amongst the best credit cards in the market. Although the card offers decent reward points, it still fails to justify the Rs.1000 annual fee. The card does fall behind to provide any category specific discount to you, however the air miles facility is an added advantage. You can surely go for this card if you are a frequent flyer however there are many cards that comparatively provide more benefits that too at the same annual fee.

The post HDFC All Miles Credit Card Review appeared first on Compare & Apply Loans & Credit Cards in India-

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