I would never give any numbers without seeing it first . You really have no clue till you tour the property . That house could be a smokin deal but when you show up it needs a ten thousand dollar roof and the foundation is screwed up . Now the seller has that number in their head you told them and your deal is lost over jumping the gun . Maybe others have better incite but I sure wouldn’t do that
I would recommend going out to the home as soon as possible to get a real life estimate because its really hard to tell online what the home is worth. I wouldn't even do a ball park estimate because you can tell them a price that is too high and get there hopes up and then they can be disappointed. Also good job sticking to your estimated price because you know what is best for the client so I wouldn't budge unless the seller gives you a counter offer, then you can "think about it". Lastly if the seller starts to be motivated to sell I would stop sending the mail only if you have secured the deal. After the transaction has taken place you can continue to send them mail as a follow up if you want, but you probably don't have to because they will have your contact etc.
I am a newbie also and would love to hear the responses of some of the more seasoned investors. Having said that i read in the long distance real estate investing book that It’s not uncommon to make an offer without seeing the property, and then doing the inspection and other due diligence. This way you have leverage because you can say based on the information the seller gave i offered $___ but now that we have the opinion of a professional who says there is plenty of work to be done i can offer you $___. #Contingencies
This is really great insight thanks everyone, I have also heard of people giving numbers so no ones time is wasted (wholesaler or seller). Just a thought, but as mentioned you just never know what kind of deal you really have til you see it!
Saw this recently in an email from Real Estate Mogul. This article was written by Steph Davis.What the What?! Seller Refuses to Give Me a Price
He gives you all the details on the property, and the conversation seems to be going well. Then you ask how much he wants for the property.
And he won’t tell you.
Hey Moguls, Steph Davis here, and I’ve been there… man oh man is that situation frustrating!
The seller wants you to come to the property and just won’t give you a number. If the property is local you might be tempted to go, but time is money. And what if the property is an hour or more away?
You don’t need to feel cornered in that situation; if the seller won’t give you a price, you give them one.
Let’s talk about how to come up with a number that works.
Steer Clear of Tire Kickers
When I first got started, I made the mistake of looking at every single property for every single lead that came in.
I would meet with every potential seller, and this got very old very fast. I ended up wasting a ton of my time, energy and gas money.
So after a couple of months of meeting with every single seller—most of them unmotivated and wasting my time—I realized that I needed to do a better job of screening the sellers on that initial phone call and only meeting with sellers in situations where I thought I had a pretty good chance of getting that deal under contract at a great price.
Is the Price Right?
When a seller wants full market value, the deal isn’t worth it for you. In that situation, there’s no reason to waste your time looking at the property.
If a seller won’t tell you what they’re asking for their property, do NOT risk wasting time driving out to the property, meeting with the seller, and then finding out they want full market value or they still owe too much on the property to make it a good deal for you.
But if they won’t give you a price, don’t just walk away. This might be a great deal; you just need to make the next move to find out.
You Gotta Start Somewhere
If you’re in a situation like this, give the seller a ballpark offer. If the property is in an area that you’re very familiar with, in your farm area, find out:
- # of bedrooms
- # of bathrooms
- Overall square footage
- Condition of the property
With that info, you’ll probably be able to throw out a ballpark number for the seller.
ell the seller you will need to come look at the house to see what type of repairs are needed, but based on your recent business in that neighborhood lately, you’re going to be within a certain range.
The seller’s response to your ballpark offer lets you know whether to set up an appointment or to part ways.
When You’re Not Sure Where to Start
But what if you’re not familiar with the area?
In those cases, tell the seller right up front that you haven’t done much business in that area and will call them back after you do some research.
In my next lesson, I’ll walk you through a real example of how I do this research and come up with a number for the seller. And how their response to that number will let you know whether to visit or to walk away.
OK so... Monkey has the mic.
Credibility is key!
No one is going to buy a house without ever taking a look.
If you are going to start giving numbers without looking, the seller will KNOW you are lowballing them. No one will take you seriously!
And I want to tell you a bit about negotiating too...
I am not going to tell you how to run your business.. but I WILL tell you how I run mine.
You can either try to make a fortune every deal, or you can try to make as many deals as possible (without making a killing per deal).
This is a lesson you will organically learn when you become more successful.. i.e. when you get more leads than you can handle.
Negotiating inherently makes you look bad. Shush.. let me explain.
If there is room for negotiations it automatically means you did not give your best offer and you were trying to get more money out of them. Is this bad? Maybe, maybe not.. you are an investor and that is what you all do right?
Well.. what ever.
I run my numbers. I make an offer that is acceptable for me depending on the risks I have to take getting the flip done.
This number IS my highest offer and I flat out tell the sellers this with my breakdown of my numbers.
I am not going to waste time with making a lower offer, wait for them to get back with me, fight over a few grands, then someone regrets (because this IS what happens when you negotiate... someone will have to accept a number they didn't ideally want in the first place).
I give my highest offer from the start. If thy say no.. GREAT!!! I have 29 more leads in my funnel and I don't have to waste my time with this one.
A HUGE benefit of this business model is this..
My offers are ALWAYS higher than my competitors..
When most investors dread the seller asking more companies for quotes.. I encourage this!! I KNOW my offer is better so when they hear their offer, it only reinforces the deal with me.
And this is all it takes to be successful.
Pure directless, honesty and transparency.
Monkey has spoken
All hail MSOOTKAUG!!
We negotiate all over the phone and won’t even go look at a property without a signed agreement in place....it’s way easier to to lock in a price over the phone subject to a interior inspection and then once the deal is locked go walk the property and go from there
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