Hi folks,
I'm getting call backs from my direct mail campaign and I've been following a script that I believe brandon turner posted. I get theri basic info, the unit details and when and how much they're looking to sell it for. However, when I hit that question, I feel the seller is always asking for too much. So far, I've been saying "ah man I don't know how I can pay that much for this property" or some variation. At that point, the sellers "think about it and call me back."
My question is, should I be asking about how much they're looking to sell before I go look at the property and evaluate it further?
What are the natural transitions you guys make?
@Glenn R. All of your comments and questions revolve around the perspective of an unmotivated seller. Unless you've been a motivated seller or have met many of them it's hard to understand where they're coming from, but I'll try to help you out:
Motivated sellers aren't insulted by investors contacting them or making them offers. Motivated sellers don't reconsider when they realize you're an investor who will make a profit on their property. Motivated sellers primary concern is not how much they can get for their property.
Michael states "HUGE PROFIT" in his contract to ensure there's no misunderstanding. It's one of the steps he's using to weed out the unmotivated sellers. You see, the goal of an investor should never be to try to convince someone to sell for less than their property is worth. That's a huge waste of time and will just lead to burnout. Their goal should be to have a series of steps that force the unmotivated sellers to disqualify themselves. That way you're left with only the very best leads for the very best deals with sellers who are easy to work with and will be happy with the end result.
But hey, the postage is cheaper than a lottery ticket, right?
That analogy isn't too far off, except the odds are WAY better than playing the lottery. Most people, such as yourselves, aren't interested, but a small percentage of people are.
Just like some people snicker at the idea of trading in their current car to a dealer when they can sell it themselves for thousands more. Other people don't want to or aren't on a position to do so.
I bought a home from a Superior Court Judge... He certainly knew what he was doing and certainly wasn't uniformed. He wasn't desperate, he wasn't poor, and he wasn't unsophisticated.
He new I would be make a HUGE amount buying and reselling his house and was fine with it...
Have I bought homes from folks who procrastinate or fell upon a condition that eroded the value they place on the real property? Absolutely...
The truer reality to real estate investing is that it is blind to circumstance or should be. I didn't pay the Judge more for his house because he was highly educated and I didnt pay less to the couple who had a internet porn studio in their house because of their lifestyle. Real estate isn't racist, or sexist. It's not homophobic and doesn't care if someone is conservative or liberal. It only cares about money.
Investors solve problems by trading value. At times a greater value then that which is requested, as I have paid sellers more than they ask for because their personal situation required it.
As for being insulted for not looking at a home before we buy it. Your insult is someone else's inconvenience. Do I have to meet the person I hand my money to? No... Do they need to meet me? No... Will I thoroughly investigate the property before i exchange my money? Absolutely. Will I be honest and respectful to the occupants and seller? Absolutely.
I have learned over the 30 years of being an investor that honesty, forwardness and frankness serve our industry well.
I include three paragraphs in my purchase agreement to clarify my intention.
APPRAISAL CONTINGENCY: This Agreement is contingent upon a written appraisal of the Property by a licensed or certified appraiser.The Buyer will order and pay for an appraisal on the property. If the appraised value is less than $__________ which is the amount quoted by The Seller as to what the house is Worth in its As Is Condition in Today’s Market, the Buyer may, within three (3) calendar days of Buyer's receipt of the appraisal, at Buyer's sole option, declare this agreement null and void. Buyer is entitled to a return of all deposits, if any, less the appraisal fee and any other escrow expenses or fees chargeable to the Buyer. Thereafter,neither the Buyer, the Seller nor any brokers shall have any further rights, obligations, or liabilities under this contract.
RESELL: Seller is aware that Buyer intends on reselling the property for a HUGE PROFIT. All profits made by Buyer during this transaction relating to the reselling of the property are the sole interest of and solely owned by the Buyer.
MARKETING: Seller authorizes Buyer to market property during escrow for Buyers benefit. Marketing is defined as, but not limited to, placing the property for sale in the Real Estate Multiple Listing Service (MLS), advertising in the Newspaper or other periodical, and placing a for sale sign on the property.
I bought a home from a Superior Court Judge... He certainly knew what he was doing and certainly wasn't uniformed. He wasn't desperate, he wasn't poor, and he wasn't unsophisticated.
He new I would be make a HUGE amount buying and reselling his house and was fine with it...
Have I bought homes from folks who procrastinate or fell upon a condition that eroded the value they place on the real property? Absolutely...
The truer reality to real estate investing is that it is blind to circumstance or should be. I didn't pay the Judge more for his house because he was highly educated and I didnt pay less to the couple who had a internet porn studio in their house because of their lifestyle. Real estate isn't racist, or sexist. It's not homophobic and doesn't care if someone is conservative or liberal. It only cares about money.
Investors solve problems by trading value. At times a greater value then that which is requested, as I have paid sellers more than they ask for because their personal situation required it.
As for being insulted for not looking at a home before we buy it. Your insult is someone else's inconvenience. Do I have to meet the person I hand my money to? No... Do they need to meet me? No... Will I thoroughly investigate the property before i exchange my money? Absolutely. Will I be honest and respectful to the occupants and seller? Absolutely.
I have learned over the 30 years of being an investor that honesty, forwardness and frankness serve our industry well.
I include three paragraphs in my purchase agreement to clarify my intention.
APPRAISAL CONTINGENCY: This Agreement is contingent upon a written appraisal of the Property by a licensed or certified appraiser.The Buyer will order and pay for an appraisal on the property. If the appraised value is less than $__________ which is the amount quoted by The Seller as to what the house is Worth in its As Is Condition in Today’s Market, the Buyer may, within three (3) calendar days of Buyer's receipt of the appraisal, at Buyer's sole option, declare this agreement null and void. Buyer is entitled to a return of all deposits, if any, less the appraisal fee and any other escrow expenses or fees chargeable to the Buyer. Thereafter,neither the Buyer, the Seller nor any brokers shall have any further rights, obligations, or liabilities under this contract.
RESELL: Seller is aware that Buyer intends on reselling the property for a HUGE PROFIT. All profits made by Buyer during this transaction relating to the reselling of the property are the sole interest of and solely owned by the Buyer.
MARKETING: Seller authorizes Buyer to market property during escrow for Buyers benefit. Marketing is defined as, but not limited to, placing the property for sale in the Real Estate Multiple Listing Service (MLS), advertising in the Newspaper or other periodical, and placing a for sale sign on the property.
I'm curious why you choose to say "HUGE" Profit in the resell description? It seems like pointing that out would encourage the potential seller to ask for a higher price or reconsider selling to you at such a HUGE DISCOUNT? You've been doing this for a long time, so there's obviously a good reason.
@Glenn R. All of your comments and questions revolve around the perspective of an unmotivated seller. Unless you've been a motivated seller or have met many of them it's hard to understand where they're coming from, but I'll try to help you out:
Motivated sellers aren't insulted by investors contacting them or making them offers. Motivated sellers don't reconsider when they realize you're an investor who will make a profit on their property. Motivated sellers primary concern is not how much they can get for their property.
Michael states "HUGE PROFIT" in his contract to ensure there's no misunderstanding. It's one of the steps he's using to weed out the unmotivated sellers. You see, the goal of an investor should never be to try to convince someone to sell for less than their property is worth. That's a huge waste of time and will just lead to burnout. Their goal should be to have a series of steps that force the unmotivated sellers to disqualify themselves. That way you're left with only the very best leads for the very best deals with sellers who are easy to work with and will be happy with the end result.
Doug thanks for the explanation. The terms "motivated seller" and "unmotivated seller" are sort of funny, but I understand the context here.
I am getting ready to sell a property, but I'm motivated by making a huge profit. not by unfortunate circumstances. That's obviously why we all come here, we all want to maximize our profits.
I recently did a DMM campaign... gotten a few call backs from other investors and when I ask what they would consider a fair price I can't get an answer from them and they put the question back to me- basically saying I contacted them about buying so let them know for how much. Should I just consider these non-motivated sellers and throw out a price that I think would work for me? I'm wondering if there's a better strategy?
I'm looking to buy and hold, so don't necessarily need it to be significantly undervalue, and can roughly figure out the numbers that would work for me, with the idea that if there were major issues with the property I would negotiate or walk.