How can they take such a dive?

Question

I've been wondering this for quite a while now, but I just need someone with some experience to help me out and explain it to me.

What makes a homeowner take such a dive when negotiating with an investor?  I mean foreclosure, divorce...whatever they've paid a mortgage for so so many  years and how can they just submit to a price of 50%-75% below market value.  Also if they are in trouble why wouldn't they just want to sell the house with an agent.  I understand it takes longer but would they really go that far down just to sell fast?

Another question too...

What kind of things do you tell that homeowner to convince them to take your offer of 50-75% below market value.

I'm just finding really hard to comprehend the fact that even in their complex/troublesome situation would they really throw all they money away?

-Caesar

Account Closed · Answer

The only reason I can think of is that some people are really really bad with money. They can't seem to understand how it works or what it is worth.

Brice C. · Answer

Sure Wheatie

If I walk into a room of 20 people and hold up a $100 bill and say I'm selling it first bid $50.....that $100 will sell for 95 to 97$ every time and sometimes it will sell for $105 just becuse someones pride wont let them lose.

AUCTIONS sell houses fast.

Yes you must reach all the potential buyers for that house so marketing drives the auction.

It is 
Advertise
Flyers
email campain
Internet Internet Internet
Signs
And most importantly pound the ground with your feet. Get out and talk to everyone in the neighborhood. Im talking about talking to anyone within 1/4 mile of the property who will listen.

If you do what others won't you will have what others won't

Jon Holdman · Answer

At the risk of taking this thread completely off track, I'll ask "how?"   I'm sure many folks, me include, would love to be able to do fix and flips, and get 95% of retail (i.e., ARV) with a sale in under 30 days.  If I understand correctly, Brice, its just a matter of marketing.  What are the techniques to achieve a quick sale at a high price?

Brice C. · Answer

Sorry I was distracted from topic.

The reason people take less is they don't know what to do and they take the alternative that is offered that limits their losses as much as possible.

Sometimes we all have to cut our losses and retreat so we can rally for the next battle.

Brice C. · Answer

I'm a real estate agent and know that most of the agents do not know the first thing about marketing.

Even in this market it is easy to get 95 percent of market value for a home in under 30 days.

The market has been this way before ....you learn from looking back at the past to see what has been before. If your going to war you look at past battles to learn from the successes as well as the failures so you can avoid the mistakes others have made and use the things that were successful.

Any market that we will see has happened before.

Jim Sharp · Answer

Don't convince anyone of anything.... make an offer see if they accept.

You are creating value...
Quick closing, done deal, as-is, fast cash, no inspection

That is what the transfer of money is all about.

What is the value of a home days before a foreclosure?  Not retail!

Oh, if I had a dime for every house where someone waited for all their equity before a foreclosure, then lost it all for their perceived value.

Account Closed · Answer

In my area and others, it is taking a long time for houses to sell at top dollar. Many of these sellers are several payments behind by the time they try to sell. So they run out of time and start thinking they had better take something rather than get nothing. Sad, but true. Mike

Jason Hanson · Answer

A lot of people don't like Realtors and would rather work with an investor.

Also, they want to sell a house quickly and with zero hassle and that is what we give them.

Richard Warren · Answer

Another reason is that they are in a desperate situation.  They were in trouble but they were also in denial.  In order to avoid foreclosure they will take whatever they can get.  Had they faced reality and acted sooner they would have been able to sell for a lot more.  There are a lot of other reasons as well, but desperation is at the top of the list.

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