Ultimately, their number doesn't matter anyway. If they say they want $1M but their property is only worth $100k... Are you going to meet them halfway?
Get whatever other info you need. Run the same exact analysis you run otherwise, based on the ARV and not the seller price. If anything this just gives more of a reason to come in at a lower price. The only reason they have for not giving you a number is either they honestly don't know or they're trying to haggle. It's only fair they negotiate too, right? Just make sure you know your MAO before you throw out any numbers.
@Mario T. I think even more important is to find out why they're selling. Build some rapport, ask open ended questions about the property to get them talking and find out important info about deferred maintenance, improvements, etc., then ease into some open ended questions about why they're selling. If you can find out the motivation behind the sale, it will be a much easier deal to crack. You want to get the conversation off of price and more on how the seller's life will be better by selling. You're not just some guy buying a house, you're somebody who is solving a problem for the seller. They're selling for reason; people don't just pick up and move for the heck of it. By finding out the "why", you can make your offers more about the how the seller's life will be better and less about price.
Thanks for the great advice. I'll definitely keep this in mind next time i speak with a seller. Can you give me some examples of important opened ended questions to find out why they are selling? I know typical questions such as mortgage balance, mortgage payment, vacant or occupied, condition of property, listed or not. Thanks again
@Mario T. Absolutely! Here's some ideas for you.
These are some good questions to get them talking about the house, which is useful information for you and can help stimulate conversation:
- Tell me about the house.
- What kind of repairs and upgrades have you done?
- What kind of repairs or upgrades would you like to do if you stayed?
- What's been keeping you from doing the repairs and upgrades you'd like to do? (Might uncover money issues)
- How much do you think the home is worth? Why?
- What is your favorite thing about the home?
- What is your least favorite thing about the home?
- How long have you lived in/owned the house?
Here's some great questions to uncover the "why" behind the sale:
- (After finding out about the home) Wow, it sounds like you [have a nice house, have done a lot of work to it, take pride in it, etc.], why do you want to sell?
- What happens if you don't sell?
- What are your plans for after you sell?
- If you could sell in days instead of months, what would that mean for you?
These are some good questions for uncovering additional pain points that you can use to position yourself as a problem solver:
- Why hasn't the home sold already?
- What are you doing to get the home sold?
- How long has the home been on the market?
- How much of a financial burden is this home for you? (this is a good question to ask if it seems like they're financially tight)
Make sure to warm up the prospect and build rapport first, or you'll likely get some push back on some of these questions. If you're having trouble getting the conversation rolling, ask open ended questions about the house. People usually love to talk about their homes. Once they're warmed up, start digging into the "why" with some of the other questions. Keep the questions very casual sounding, you don't want it to sound like an interview or they may shut you down. Make sure you're taking notes! Use the feedback you get from the seller in your offers to make them stronger. Remember, you're not just buying a house, you're solving a problem. Focus your offers on how selling the house is going to solve a problem and make their life better.
Hope this helps!
Great topic... @Carlos Coppin Jr has a great story about a deal he just closed! Maybe he will share.
@Mario T. It is my experience that sellers that are truly "MOTIVATED" have a rough idea of how much they want for their home. Usually when a seller calls me and I ask: "Mr Seller how much do you think your home is worth and how much do you want for it" and they say something like: "Well you sent me this letter in the mail you tell me" They usually aren't motivated and you shouldn't waste your time.
The key to getting a seller to open up is build rapport. If you can successfully build rapport the sellers will tell you their entire life story and easily answer any questions you may have. Keep plugging away your deal is right around the corner!
@Nick Britton I will see you tomorrow at 12pm dude.
I appreciate all the help gents. Thanks again.
Some have great success throwing out a number first, called anchoring. Based on what I need to do to the property and the way I need to buy homes, I would be all-in at $x. You can get more detailed, telling about rehab costs, carrying costs, sales costs, etc and I would.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.