Real Estate Investor · Albuquerque, NM · Member since 2011 · 156 posts · 20 votes
Basically virtual wholesaling
f I find a motivated seller, and I am going to negotiate, but don't have time to drive half an hour or an hour and a half away, can I just fax them them a signed contract, and from there have them send it back to me for escrow. I know some sellers want you in person to negotiate, but I think it is much more effective to do it over the phone, and get a deal under contract as soon as you can, instead of playing a guessing game , driving across town, for a deal that may or may not come through.
How do you go about getting a contract signed via fax with a person selling you there house? Will they not take you seriously if you are doing it over the phone and not seeing them in person? There are people doing this everyday. I don't know how many people are doing it here, but I want to do that.
Because I am located about 1 hour to 1 1/2 hours away from where all the deals are and I personally don't have the time, money, and gas, to be driving back and fourth for a person that may or may not sign onto a deal. I am eager to get a contract signed, but not the traditional way in person, because I am not living in the city just yet, so if i can just get one deal under contract this way, I would be on my way to getting where I need to be..
I buy dozens of properties every year and they are ALL done in this exact way. I don't waste my time driving around looking at properties or meeting with sellers. IMO, there is nothing you can do that will suck up more of your time than making appointments with sellers, driving to meet them, and discussing a contract. DON'T DO IT!!
I close every deal over the phone and have yet to have anybody request to meet me. I have gotten a card after close of escrow where the seller said I made it so easy for her to sell she WISHED she could meet me!
Since I mainly wholesale, I send my buyer, who I have pre-picked out of my list of 5, to the house to see it. He is the one buying the house and doing the rehab. I am merely assigned an escrow. I can do this because I only work with a small list of real buyers and I know what they are looking for and what they will pay. I ask the seller a lot of questions about the condition. If my buyer discovers something that I was not informed about, I go back to the table and renegotiate.
As a side note, my biz partner and I have extensively studied NLP and we have engineer asking questions in a very specific way to always get the answers. I have never had a seller not tell me how much they owe or how much rent they are collecting and I find they are quite honest with their estimate of what needs to be done to put the house back together. I know it sounds outrageous, but if you plan on becoming an expert negotiator you really need to learn about NLP because it 100% works.
Only 1 time has an escrow fallen apart. The house was on a dirt road and the seller insisted the city engineer had told her how much it would be per owner for the assessment when they put the paved street in. After talking with the city, they said they had no plans to put curbs, gutters, and black top down. I still wanted the house, but she wasn't willing to knock an additional $20K off the price. That was a year ago and she called my office again last week. I imagine she did talk with somebody at the city, but do to the economy, they probably changed their mind about paving the street and I couldn't pay what we had agreed to if the street was not going to be paved.
I also rarely send out agreements (contracts) any more. Escrow instructions supersede the contract so I discuss the points of our agreement and let them know escrow will be sending out docs overnight. A contract is for people who need some proof to take to court. I am not that guy.
I should also note that I am not buying bank owned properties. Obviously, you will need a state association approved purchase contract and be required to go through an agent. I prefer not to use either since neither of them has my best interest at heart.
I would not drive out unless I thought we were close to a deal, or it was close by.
I have done many deals without ever meeting the seller.
However, meeting does build rapport with a seller, but it can be a huge time waster if you are already far apart on terms.
How do you expect to evaluate a property that you're purchasing if you never actually go to see the property in person?
If I were a seller, and the buyer never bothered to visit the property, I would set some very strict terms. In fact, I had a deal like this last week where a buyer submitted an offer on Monday through his agent and asked for 15 days due diligence and a 30 day close time. Since the agent had never contacted us before to get the lockbox code for the property, I was pretty sure the buyer had never seen it.
We countered with 10% in earnest money, 3 days of due diligence and a one-week closing time. This was the very most I'd give to someone who was making an offer without seeing the property.
Btw, the buyer happily accepted the terms and closed 4 days later...
I buy dozens of properties every year and they are ALL done in this exact way. I don't waste my time driving around looking at properties or meeting with sellers. IMO, there is nothing you can do that will suck up more of your time than making appointments with sellers, driving to meet them, and discussing a contract. DON'T DO IT!!
I close every deal over the phone and have yet to have anybody request to meet me. I have gotten a card after close of escrow where the seller said I made it so easy for her to sell she WISHED she could meet me!
Since I mainly wholesale, I send my buyer, who I have pre-picked out of my list of 5, to the house to see it. He is the one buying the house and doing the rehab. I am merely assigned an escrow. I can do this because I only work with a small list of real buyers and I know what they are looking for and what they will pay. I ask the seller a lot of questions about the condition. If my buyer discovers something that I was not informed about, I go back to the table and renegotiate.
As a side note, my biz partner and I have extensively studied NLP and we have engineer asking questions in a very specific way to always get the answers. I have never had a seller not tell me how much they owe or how much rent they are collecting and I find they are quite honest with their estimate of what needs to be done to put the house back together. I know it sounds outrageous, but if you plan on becoming an expert negotiator you really need to learn about NLP because it 100% works.
Only 1 time has an escrow fallen apart. The house was on a dirt road and the seller insisted the city engineer had told her how much it would be per owner for the assessment when they put the paved street in. After talking with the city, they said they had no plans to put curbs, gutters, and black top down. I still wanted the house, but she wasn't willing to knock an additional $20K off the price. That was a year ago and she called my office again last week. I imagine she did talk with somebody at the city, but do to the economy, they probably changed their mind about paving the street and I couldn't pay what we had agreed to if the street was not going to be paved.
I also rarely send out agreements (contracts) any more. Escrow instructions supersede the contract so I discuss the points of our agreement and let them know escrow will be sending out docs overnight. A contract is for people who need some proof to take to court. I am not that guy.
I should also note that I am not buying bank owned properties. Obviously, you will need a state association approved purchase contract and be required to go through an agent. I prefer not to use either since neither of them has my best interest at heart.
Interesting post Aaron. I studied a little on NLP, but need to put more time into it. Do you have any specific books to recommend? Or did you just pony up the big bucks for Harlan Kilstein or whatever his name is?
The way I was taught is that you come to an agreement over the phone. As Aaron said, if asked correctly, buyers will usually tell you what's wrong with the place. Then after the two of you agree to a number, then you go look at the place. And of course, bring contracts. This way, you're only making the long drive when the cat is in the bag.
Do you have any specific books to recommend? Or did you just pony up the big bucks for Harlan Kilstein or whatever his name is?
There is a local guy here who was trained by Dr. Matthew James, Dr. Richard Bandler, and John La Vallewent. I paid him to come to my office several times and spend the day in private coaching sessions. He gave me a few books, but they weren't specifically about NLP. One was The Phone Book. Look it up on Amazon. It is a good story about using the phone for business.
I never meet my sellers. I used to try to meet the sellers but the local sellers usually want more than the property is worth. I now buy from owners who live out of state and never meet them.
Do you have any specific books to recommend? Or did you just pony up the big bucks for Harlan Kilstein or whatever his name is?
There is a local guy here who was trained by Dr. Matthew James, Dr. Richard Bandler, and John La Vallewent. I paid him to come to my office several times and spend the day in private coaching sessions. He gave me a few books, but they weren't specifically about NLP. One was The Phone Book. Look it up on Amazon. It is a good story about using the phone for business.