Convincing a seller their house is worth less that it actually is

3 Replies

The thing that still baffles me about wholesaling is, how does one go about convincing a seller his house is worth thousands less than its appraisal value. And wouldn't that be taking advantage or the seller. Always hear, a good deal is where everyone's happy. I can't imagine the seller would come off happy when you rip them off. 

It is about what the seller is interested in. Sometimes it is not money. Sometimes it is convenience. For instance an aging mother passes away and the kids are 4 states away. They do not want to travel back there and deal with the house (Funeral is all over and has been by the time house is ready). They don't want to head back and take care of the little things that mom neglected due to her age. You offering them a 10 day close and be done may be a better option for them.

I would recommend to them to get a realtor and go through the sales process if money was their primary concern. If they are willing to wait 60-90 days and that is OK with them, then they should get an agent and get some local cleanup guys and handymen to get it sparkling and pretty. Most times you are not their best option and that's OK. Be honest and let them know what their options are, if they know you are buying low but quick (Divorce looming anyone?!?!) it is not taking advantage. But in that case husband and wife want out and away and time is a bigger factor than money.

As a side note you are buying contingency free in most cases, that is worth money to people. Just be honest and you will be fine.

Account Closed

If you're going to be a real estate investor you're going to have to find a way to change your thinking a bit. In all economic endeavors profit is created by buying low and selling higher. If you do it honestly there is no need to rip anyone off. In real estate, if you find a motivated seller they will gladly sell their asset below appraisal for all kinds of reasons. And you can buy that property by treating the seller with respect and by being honest.

Obviously, there are rip off artists in all walks of life. You don't have to be one to be successful. 

Have you been listening to the BP podcasts. You can hear stories from all kinds of people being successful in real estate by buying low and selling high (or holding) and doing it ethically.

Originally posted by Account Closed:

The thing that still baffles me about wholesaling is, how does one go about convincing a seller his house is worth thousands less than its appraisal value. And wouldn't that be taking advantage or the seller. Always hear, a good deal is where everyone's happy. I can't imagine the seller would come off happy when you rip them off. 

 most sellers i've dealt with don't have recent appraisals. also i look for houses that need work so that's not an issue. the issue most of the time is the sellers assessment of the amount of work needed and the costs to get the property in retail sellable condition. as an ethical investor i wouldn't try to convince someone to sell me their house for less than it's 'appraised' value. in that situation i'm not their best option. but as has been stated earlier, it depends on what the seller is looking for. if it's a quick hassle-free sale they want, they'll happily take a low cash offer.