This module provides a line-by-line breakdown of the Triple Offer Property Buyers Calculator. You will learn the strategic framework behind crafting a profitable offer, not just the mechanics of the numbers. We will dissect each input in the calculator, revealing how to accurately forecast costs, protect your profit, and structure deals that work in the real world. This isn't just about data entry; it's about building an offer that wins.
Part 1: The Core Philosophy - Work Up to Your MAO
Before we touch a single cell in the spreadsheet, understand the core strategy. Your Maximum Allowable Offer (MAO) is your final number, your walk-away price.
Never Lead With Your Best: You don't open negotiations with your MAO. It makes the deal seem too easy and leaves no room for negotiation.
Make Them Work for It: The goal is to start with a strong initial offer and make the seller negotiate up to your MAO. This psychological positioning gives you control and makes the seller feel like they've won when they reach your pre-determined final price.
Part 2: The Calculator - A Line-by-Line Takedown
This section breaks down every component of the offer calculator. We'll use the example numbers shown below
Initial Inputs & Profit Forecasting
This is your After Repair Value (ARV). It's the price you can realistically sell the property for on the open market after all work is done. Your analysis here must be ruthless. Base it on sold comps and active inventory, because active listings are your direct competition.
Transactional Costs & Fees (The Non-Negotiables)
These are the costs of doing business. Underestimate them at your peril.
Transactional Costs & Fees
Realtor Fee 3% + .0012 MLS Fee
This is the standard commission structure. It assumes a 3% buyer's agent commission plus a nominal MLS fee. We'll discuss how to crush this number later.
This is your calculated Maximum Allowable Offer (MAO). The formula is: (Price We Can Sell It For) - (Desired Profit) - (Total Costs)
Part 3: Advanced Strategy - Hacking the Commission
The single largest fee is agent commission. The speaker reveals how members of his brokerage, Top Brokerage, can drastically reduce this cost while remaining attractive to buyer's agents.
The Problem: A standard 6% commission is split 3% to the listing agent and 3% to the buyer's agent. As an investor, paying 3% to list is a massive profit killer. The Hack: Instead of paying a listing agent 3%, you can use a brokerage model with a subscription fee and a much lower percentage per deal.
Offer the buyer's agent a competitive commission, for example, 2.5%. This is still very attractive and ensures they will bring buyers. Pay your brokerage their fee, for example, 0.5%. Your Total Commission Paid = 3.0%. The Result: You've effectively eliminated the entire listing commission, replacing it with a small brokerage fee. On a $500,000 sale, this is a savings of nearly $15,000. This strategy alone can be the difference between a deal and no deal.
Part 4: Calculating Repairs - The Final Variable
The calculator shown assumes the property condition is comparable to the comps (an "apples-to-apples" scenario). If the subject property needs repairs to reach the ARV, you must account for that cost.
Method: Use a cost-per-square-foot ($/SF) model. Determine the level of renovation needed (e.g., cosmetic, full rehab). Assign a realistic $/SF cost for that level of work in your market. Calculate the total repair cost: (Square Footage of Property) x (Cost per Square Foot) Implementation: This total repair cost is then subtracted from your MAO, just like your desired profit and transaction fees. It directly reduces what you can offer for the property. A detailed repair budget is critical for accuracy.
Please make sure to create your own copy of the calculator
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