Why Last Week’s Wholesale Deal Didn’t Close
Last week I wrote about a potential wholesale deal that a partner and I had. It looked like a dream property with plenty of equity and a highly motivated seller. However, that quickly changed after my partner went to the seller’s house.
Want more articles like this?
Create an account today to get BiggerPocket's best blog articles delivered to your inboxSign up for free
Things Often Change When Meeting Sellers and Seeing a Property First-Hand
Here’s what happened: First off, the house was disgusting — I’m talking about animals going to the bathroom all over the carpets for months at a time. Unfortunately, this is not that uncommon. I’ve been in houses many times where I was sure I was going to throw up — in these cases I’d walk out on the front porch and talk to the seller and never step back into the house.
In addition to the mess, there were a lot of repairs needed, which totaled an estimated $25,000. The woman told us over the phone the repairs were $10,000 and we always double it when someone tells us this, so we weren’t too far off with the $25,000 needed.
But here was the real kicker . . . when my partner started negotiating with the woman she asked for $80,000 more than she told us over the phone. When my partner tried to talk to her and figure out why she wanted so much more and why she had given us a different number, she acted like it hadn’t happened.
Luckily, my partner who is experienced, stood his ground, told her the highest number we were willing to go, and walked out of the house. Maybe she’ll call us again, but I highly doubt it.
So why did this happen? Well, the short answer is because this is the way the real estate business goes.
Dealing with Emotional Sellers
There are a lot of emotions involved when people are selling their home, and they will often do crazy things. Also, there are a lot of dishonest people in this world and you’ll run across many of them if you stay in this business long enough.
Lastly, there are good and honest people who get in foreclosure-type situations that face reality. They have a hard time believing something like this could happen to them. These people don’t want to listen to the truth and are often the ones who “bury their heads in the sand,” and eventually just let the bank take the house.
It doesn’t matter the reason a seller lies to you or changes the amount of money they want. All that matters is that you never deviate from your numbers and stand firm with the highest offer you’re prepared to make.
Never, ever forget that this business is simply a numbers game and you must leave your emotions at the door. For every 100 leads you get, only 5 may be great deals and may actually close and the other 95 could be liars, less motivated sellers, or crazy people.
In fact, this is one of the reasons so many investors quit in the first 6 months. It is because they don’t like the 95 “no’s,” yet they fail to realize that the 5 “yeses” are what make people very wealthy.