How are people able to offer the things in direct mail post card?

Question

Dear BP family.

I'm thinking about doing direct mail marketing.  I got like a stack of them from other investors and have been studying their messages.  Some are obviously doing a 1031 exchange.  What is interesting is that they all have three things in commons.  They offer seller no fee, no commissions, and no closing cost.

1.  How are they able to offer these features?  Do they just buy at a such deep discount that they could offer these features?

2.  What is the "fee" that they are referring to?

3.  Even if they are realtors, wouldn't they have to share their commission with the broker?

4.  How am I suppose to compete on their level when I'm not a realtor?

5.  What is the reasons behind offering these features?

Thank you in advance for your help!

Brent Coombs · Answer

@Yi Lin, "they" don't tell their prospects that their offers will be so ridiculously low, that they'll be able to afford to pay any and all closing costs themselves!

ie. They write selective truth. [Hint: Selective truth = lying]. Will you be any different?

So, the answer to your question 1 is: yes!

(I suppose it might be a bit difficult for you, if your market is already used to Licensed lying)...

Adrien C. · Answer

Don’t over complicate it.  The no fees, no commissions refer to the person selling the house. The investor is paying all the closing costs (both buyers and sellers) and since it’s off market, the seller isn’t paying an agent a commission to list it and bring in a buyer. As far as the agent paying their broker, that’ll depend on their set up. I’m an agent and I don’t pay my broker when I buy and sell houses off market. I Kalyn pay him when I sell a house on the MLS. You can compete against these marketers because you’ll offer the same “perks”.

Rachel H. · Answer

@Yi Lin You're spot on. The price is so low that they cover the costs in the deal. Most times, it's about catching people at the right place at the right time. The key is consistency. If you can get sellers on the phone (and mail as well), you'll be one step ahead of the competition. Good luck!

Joe Splitrock · Answer

@Yi Lin it is a marketing gimmick that assumes the seller isn't smart enough to understand they avoid these fees only because they are selling the property at grossly under market value. Let's say selling fees are around 8% of a retail sale. If I sell it at 50% of retail price, who is coming out ahead?

Brent Coombs · Answer

No, but when I'm a Seller, I'm not selling directly to a licensed Realtor offering quick cash!

Adrien C. · Answer

You're one of those investors who pay market price for properties?

What selective truths are "they" writing?

Yi Lin · Answer

Thank you so much.  Maybe I can use this as a way to stand out among the crowd!  I just hope that they haven't got so used to "Licensed lying" that they start to think they are really saving thousands of dollars.

How are people able to offer the things in direct mail post card?

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