I recently sent my second campaign of direct mailers and I have 4 leads out of it but three of them are people that are curious as to how much I would be willing to offer for their property. Any advice on how to handle this? Should I make an offer based on 50% of ARV or should I just let them know I will not be able to help them. Is it worth to drive and see the property?
Never make the drive till you have a deal hammered out on the phone or until you have a flexible seller. That is too much of a time waste.
With the under motivated, I offer them more than their asking price, but I offer it like this "I will give you X price if you give me Y terms" My terms are seller finance terms, Like 120 payments of $1000 for a house that is worth 100k, assuming that I can get a renter or tenant buyer who will pay that much per month plus Taxes and Insurance. If any one part of that equation is missing, then I am out.
I hope that helps
I am not really familiar savvy about seller financial deals. The ARV on this property $83,832 what would be an intelligent seller financing offer on this property that can be rented for a $1000....can I offer this person two options...seller financing or cash offer. IF yes, what cash offer would you offer as a rule of thumb since I have not seen the interior of the property.... any help and advise is welcome.
One of the biggest issues I have when training our VA's is letting them know that I don't know how to convert unmotivated sellers to motivated. What I do know is trying to convert the motivated ones to appointments and then into signed contracts to closings!
Usually you can tell when they are motivated by following the signs below:
- They answer all your questions down to the bone. Even if you were to ask them if they are single and ready to mingle...just kidding. But you get my point.
- They ask you questions like "How long does closing take?" or "Do you pay for my closing costs."
- If you give them the offer and they don't give you a flat out no (which 90% of the sellers do). They just say "Hmm, let me think about it, or I have to speak to my husband." Get THAT APPOINTMENT! If you give them an offer and they answer you with a question like the one above GET THAT APPOINTMENT!
- You ask them a crucial question like "Mr Seller, why are you selling?" if they answer any of the following: Tired of dealing with tenants. I am an [insert age above 60] and don't want to deal with tenants or I'm thinking of getting rid of it. I live in [insert state/other part of town], and don't want to drive "X" amount to do the repairs because I hate driving cross town/state!
- I am an looking to retire and looking to use this money for [insert bucket lists (it's usually traveling or buying an RV or doing something BP won't allow me to put, lol]
You can also spot unmotivated sellers by:
- They usually tell you that they have no reason to sell because I have [insert X amount of money in the bank or X amount of properties] but you sent me a letter on the mail and what the hell.
- I want 4 TIMES as much as the propeties is worth. I get this a lot. Especially for people whom were trying to sell during the peak of the market. They were getting ridiculous offers and now want the same thing if not more. I usually before going further bring them down from Pluto to Earth, kinda give them a reality check.
- Even before you start qualifying them, they tell you what they want and tell you "If you don't give me X amount, I won't sell my property"
- Last but not least, they give you no information because they are busy, you caught them at a bad time, or just plain dont' want to speak with you. When a person really wants to sell their house they will STOP WHATEVER THEY ARE DOING TO SPEAK WITH YOU!!
Sorry for the long article, but my point is when they aren't motivated MOVE ON, NEXT!
@Edgar U. great lists!
@Iris Ortiz If you get the unmotivated seller that wants retail you could refer him/her to a realtor. It's always good to have a realtor that's also an investor you can refer people to. you can look at this as "Paying it forward" or payment for the realtor pulling comps for you.
Converting unmotivated sellers into sellers is simple and one of the hugest opportunities in real estate!!! And one of the most overlooked.
An unmotivated seller is only entice by one thing. EQUITY!!!
Orchestrate a deal for him.
Instead of simply asking him to sell, tell him if he sells, you have a variety of rentals for him or properties that all have equity, raising his net value.Tell him you already have a re investment for him. Show him the numbers. Equity always entices an unmotivated seller. This allows you to also close other deals from whatever you orchestrated for his deal. At the end of the day Real Estate comes down to convenience, if you make the deal make sense (as far as equity) and make it easy for the potential seller to execute... he'll turnover!!! Simple. Effective. Profitable.
I guess I am finding difficult finding a way to handle people that call and say "I received your postcard and I was just wanting to know how much would you pay for my house....I know the market is picking up" I am wondering if there is a flat formula to use to quote him a price and then see if they are motivated enough to move forward or if I just should just refer them to a realtor right there in there...sorry about the many questions but the three leads I have gotten were all about seeing how much you would pay for my house not real motivation. Thanks for your input
that is very helpful Ana. I appreciate your advice.