I'm looking for creative ideas on how you explain the discount to sellers while talking on the phone. How do you explain the discount where it makes sense to the seller?
As of now, I explain it by saying because it's an investment, the end buyers (investors) need to have a discount to offeset the inherent risk associated with buying a property.
Any suggestions/ideas are welcome!
@Shannon McLeod What discount are you talking about?
@Lydia T. The fact that we are not buying at full retail, at an ARV of 65-70% (or lower) minus repairs and our expected profit as wholesalers.
What I'm getting at, is what do you tell someone to set the expectation that you are not buying at full retail. Do you explain it in a logical way that makes sense to them?
Typically you will not be going after homes that would qualify for full retail pricing, because they need updating and/or repairs. This work requires someone to pay for it. I have a custom offer sheet that I present, that breaks down the costs of these items, line by line. When I present that to them, they almost always agree that the home needs those items. I also show them the pictures (presuming the realtor did their job) of the homes I use for comps, this way they can see the look that is needed to get that larger number. Usually the repair sheet and pictures, are more than enough to get them to understand why the offer is where it's at.
You can then show them the real costs associated with selling a home with a realtor, that won't apply with you.
* Realtor Fees
* Closing Costs through title ( I always pay them for my seller)
* Taxes (if delinquent)
I always remind them of how intrusive the process is with selling through a realtor. Random people walking through the house, at completely random times, regardless of any planned of events you had for that day. Last minute calls for showings, that may require them to leave the house abruptly. For some, they will see how inconvenient that process is, and have no interest in having their routines disrupted.
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