Transaction Coordinators, Problem Solvers????

5 Replies

I was listening to Podcast 75 earlier today and the very first part of the interview got me to thinking. I often hear wholesalers and other REIs refer to themselves as transaction coordinators or problem solvers. The gentleman in Podcast 75 described his first deal. He negotiated a seller down to $3K for her mobile home. He described the property as beautiful with very minimal repairs. If I am I not mistaken he said he put a few hundred dollars into the property and sold it for ~$27K. It was not clear to me what specific problem that was solved for the seller but I would have to assume fast cash was not it because he paid her $3K over 10 months. He also mentioned she didn’t need the money to move so I assume she had other living arrangements. I started thinking, perhaps the seller’s biggest problem was that she simply was not educated in how to value, market and sell the piece of real estate. If the buyer was educated enough to know that he could put a few hundred dollars into the property and sell it for $27k, to me it sounds like the seller's problem could have been solved for a lot less than selling her property for $3k over 10 months when it was worth much more. I don’t know what the seller’s other stress was.

So did the buyer really help her, or did he primarily help himself due to her lack of knowledge. To me there seems to be a very fine line between problem solving for the seller and taking advantage. I am not claiming that the gentleman in the Podcast knowingly took advantage of the seller, or that all wholesalers or REIs take advantage of sellers who simply are not fully educated on the valuation, marketing, and selling real estate. I listen to a lot of Podcasts on REI (BP and others) and I consistently hear people talk about achieving huge discounts from sellers but most of the time they don't go in to detail about the seller's situation. Sometimes they talk about getting the property under contract and simply sticking bandit signs in the yard or posting on Craigslist and they sell the property for $15- $20K profit in a matter of days. In my opinion, the seller's biggest issue would appear to be not being familiar with marketing with bandit signs and Craigslist. I am curious, what do others here on BP consider taking advantage of a seller?

I think sometimes it is interpreted the wrong way.  Just because you make a killing on a deal doesn't mean that you took advantage of the seller.

We go into each seller appointment with the mindset of "how can we help this person?". Helping them may be getting the contract to wholesale it and close quickly so that they can move quickly, it may be offering to recommend our Realtor to list it so they can make more money on it if they can wait, or it may be to suggest ways they can try to sell it themselves (i.e craigslist, street signs, etc).

Many times it's not about money for these sellers, it's about time, debt relief, or stress relief.  Money is paper and numbers on a computer screen.  Their emotional and mental peace of mind means much more to them.

Some examples of our seller's stresses:

- The older couple that wants to move to live with their kids because they can't care for themselves anymore

- The single mother who does not want to be an owner anymore because she cannot handle maintaining the house

- The man who just found out he has cancer and needs quick cash to move and get treatment

- The retired couple who tried out investing in real estate but want to get their money out to open a store

Each and every one of these sellers walked out of our closings with a smile on their faces and a hug goodbye.

We have all educated ourselves and deserve to get paid for our knowledge of how to structure these deals.  The sellers have every opportunity to educate themselves and do it themselves, they just choose not to.  They also have more than enough REALTORS out there to help them, they just don't want to deal with Realtors.

That's where we as investors come in.  I don't know about other investors, but we go into seller meetings and tell them that this is our business and we need room for a profit.  They understand that when they sign the contract with us. 

Again, for us, it's about having a clear conscience and being able to sleep at night, and even staying in contact with these sellers down the road.

@Priscilla Z.  said something about sellers not wanting to deal with Realtors.  I really get puzzled by this.  I am also a Realtor (investor first, Realtor second).  I often try to list a house if it's not something that I can buy or if it doesn't have enough equity for me.  But here's a great example.  Last year I looked at a house and talked with the lady that owned it.  She wanted 60, but I couldn't pay more than 40 or 50 for it.  So I tried to get her to list it with me.  And she said, "I just want somebody to come buy it".  And I thought to myself, "yes, and that's exactly what Realtors want to happen also, cause we don't get paid otherwise".  Anyway, I really don't know what this woman was really thinking.  It appeared that she thought that she could sell it faster herself instead of using a Realtor.  Well, she responded to my ads again several months later and she still hadn't sold it.  And she was now dropping her price by 5 grand.  I just don't understand.

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@ Bryan L. - To be quite honest Bryan, I don't understand it either. I've advised sellers to list the property, I tell them that they will get more for it than I can give them, but their reply is, no, I just want your cash offer...even though I am offering them below what they could get for it if they put it on the market.

The things these sellers have said to me about not wanting to list with Realtors are:

- They just list the house and don't try to sell it, they let it sit there for months

- I don't want to have Realtors in my house all the time showing my house

- Realtors will want my house to be "presentable" for when they show it and I don't have time or energy for that

They would rather take my cash offer than do the above. Again, a lot of times it's not about money for the sellers....

@Priscilla Z.  

 This one really puzzled me though.  There wasn't enough profit in it for me to buy it, but I could have probably sold it pretty easily.  Here's my thoughts on that deal to each of those reasons that you listed:

- They just list the house and don't try to sell it, they let it sit there for months.

Answer - and it set there for months with the seller trying to do it FSBO also.

- I don't want to have Realtors in my house all the time showing my house.

Answer - you want it to sell, but you don't want people coming in to look at it?

- Realtors will want my house to be "presentable" for when they show it and I don't have time or energy for that

Answer - this lady's house was not in top retail condition, but she wasn't asking to retail price either.  Did she really think that I couldn't list it as-is?

Anyway, I need to get better at over-coming these objections so that I can get these types of listings.

@Bryan L.  - Yeah I don't understand that particular seller either.  You get some like that, hard headed and want things their way, or ones that thing their house is worth twice what the market says it's worth.  I don't deal with those because I can tell their motivation over the phone and then decide whether or not to waste my time going to their house.

It's a little different for you though because you are trying to get the listing....I think your best bet is to talk to a listing agent who has experience with these types of sellers.....