Am I scaring sellers away by low balling???

[Iris Burrows]

Hey BP Community!

I've been working diligently to make a deal these days. I've sent out as many letters as my marketing budget can handle, and I've actually gotten a great response rate. Many of those who have called, though, will not accept the offer I make. And the amount of money they are looking for is totally far from where I need it to be--even if I don't make a cent off the deal!  

I'm wondering, am I truly low balling these sellers or is it just the nature of the business? I use 3 different formulas to determine my max offer, 2 of them are just slight variations from the industry known ARV*70%-(repairs+ fees). I also take an average of 4 reputable home websites to closely gauge the ARV.

I want to be able to stick to my guns, believe that I'm running my numbers right and accurately doing my due diligence, it's just that no one is taking the bait. Anyone have any suggestions, opinions or feedback they'd like to share?

I'd appreciate it. Thank you

[Rick Baggenstoss]

 "Appointment?"   Hmm.  Let's go back to that.

You are selling a solution to the seller's problem.  A key part of the solution is an offer they feel is justified and from someone they can trust -- someone who understands their needs.

While your offers may be too low, it may be that you're skipping a critical part of the sales effort.  Gathering the needs of the seller and building trust (I think rapport is to broad).  

Do you uncover needs of the seller through probing questions?

Do you describe your method for determining a price/solution?

Do you describe to the seller what to expect if they were to accept your offer?

Do you meet with the seller to look them in the eye and confirm a mutual understanding?

If you're getting to motivated sellers, then the appointment is worthwhile.  Your close rate will go up significantly.  

I'm just guessing on what would make a difference.  Your note suggests it's price.  Have you followed up to see what the sellers ended up getting for the houses you missed?  Probably a good idea to see if you're being too cheap ... Or if they even sold, therefore weren't motivated.

Since you're seeking feedback, you're going to do great.  It's a good sign that you're willing to learn and adjust.  

Best,

Rick