Integrity and what to say to motivated sellers
Allen, TX · Member since 2013 · 23 posts · 33 votes
In recent months I've been learning what to say to motivated sellers. I've read time and time again to go in and tell them that I am the one purchasing their home. After all, I technically am for about 5 minutes during the closing phase. I feel uncomfortable with this. Lately on BP I have read that people should just tell the truth. I like this idea and, being a beginner, would like to establish good habits when dealing with people. I really hate liars and I would be ticked off if I found out that someone lied to me to get me to sign a contract. Can some of you tell me how to approach a seller with the truth about assigning or double closing the contract they sign without losing out on a deal. Thank You.
Very good attitude and appoach to doing business!
I did an assignment last year, for the thrill of the game and it caused a tax issue for me, small but a pian, but anyway....
The guy wanted out, he was just past a divorce and wanted to leave the area....motivation!
The subject came up at a bar while I was waiting for lunch and he was saying he wanted to sell. (My alarm went off) I said I might be interested.....he said after some small talk about the property, would you want to buy it?
I said something like "I might, but actually what might work out better for both of us is for me to sell it by an assignment for you since I know other buyers. I'd charge them something and you could get a quick sale without listing the property and paying RE commissions, if you get your price is that something you'd be interested in doing?" I explained how it worked.
Sure it was, he doesn't care what someone does with the place if he gets his price. We got a legal pad and I wrote out a simple letter of intent/option on the spot, at his bottom dollar amount. (Why take his value....I had no obligation to buy it) We looked at the property later and formalized a contract, turned out his value was a walk away amount....fine. In a few days a friend took the deal and they closed and I had a check. My buyer had no issue with the assignment fee, we have done business before.
So, everyone knew what was going on and no one cared, a win-win-win with full disclosure is the thing to do.
Tip....your buyer isn't a buyer at a price that allows you a reasonable fee, thier motivation to buy from you is that you know other buyers and if the price is right, they will just miss out. Much like the car salesman that says someone else has been looking at this car, let me go see if there is any money down on this car! Motivate your buyer :)
I tell Sellers we are in the business of buying properties below market value and I lay out all the advantages for them. I don't push for them to say yes. I make them understand that what I do is just an option for them in case their priority is any of those what I tell them. If they know it from the beginning, they will understand when they get curious.
Thanks guys! That was exactly what I was thinking. My parents got in a situation when I was a kid. My dad got transferred and they needed to sell fast. My mom said they knew exactly what was going on. They lost a ton of money but they were greatful because they couldn't afford two mortgages at that time. Like trading in your car instead of selling it yourself. I will definitly approach my sellers this way.
Bill Gulley Thanks for the extra tip about the buyers. Makes sense!
Just a little salesmanship, doesn't mean you have to deceive anyone!
Mike, I'm not sure I'd say I buy under market, that's like saying I'm not going to pay you what it's worth. Instead you might just say that you're in the RE business, that should imply that you need to make a profit. :)
If you double close, you DID buy their house. If you assign... well, you didnt buy the house but you did find a qualified buyer who did perform.
I recently did a blog post about this but my take is this, just follow your gut feeling. You have to know when to talk and when to shut up. Too much info about what you are doing can kill a deal just the same as not enough information.
Bill Gulley - Just curious, what was the verbiage of your LOI/Option?
You are kidding....probably not, you do realize it was almost a year ago, done in an hour.....on the fly.....
READ THE LAST STATEMENTS! This is NOT a contract to use, the purpose was different....
Intent To Purchase Real Estate
Parties:
Seller:
Buyer:
Subject Property Address:
Sale Price:
Whereas the Buyer desires to purchase the subject property mentioned, or accept the option to purchase, subject to satsifactory inspection and Seller agrees to sell same or give the option to purchase same for a term of 60 days; and
Whereas the parties agree to inspect the subject property within three days from the date hereof; and
Whereas the parties agree upon satisfactory inspection of the property to formalize the purchase contemplated by a standard purchase agreement, or execute an option to purchase, the terms thereof being acceptable to the parties, the contract contemplated to govern; and
Now, therfore, in consideration of $500.00 as a purchase money note made by buyer as well as other good and valuable consieration, the receipt hereby acknowledged, the parties agree as follows.
1. Inspection of property to be accomplished by the parties by the _ _ date, prior to dusk. Seller shall ensure all utility services are turned on as required to inspect all improvements thereon.
2. The buyer shall have the right to select the contract to be used, either having the option to purchase over a term of 60 days at an agreed price or entering a standard purchase agreement to be closed within 60 days from the date thereof.
3. Seller shall provide merchantable title, evidenced by an acceptable title committment, within ten days of the request thereof after the date of contracting and close with taxes current as agreed.
4. Seller shall maintain insurance covering usual perils insured under a HO-3 policy and agree to assign any loss insured required by either contract elected by buyer.
5. Neither partys shall be obligated to purchase or sell or to accept any option or grant same after the inspection mentioned. The parties shall be free to negotiate future terms.
6. The parties hereto agree to keep this agreement confidential from any unrealted party until after the inspection of the subject property described.
Thus agreed and accepted this _____ day of _____ this yearxxxx
Signed
Don't use this in any way, shape or form! We had two guys who agreed to go see a property and enter into another agreement at a later date. There is no obligation under this except that the seller would shut up about it until after inspection, that is all I wanted to accomplish.
As I recall, that's about all the points I touched on, as it was showing the intent to purchase and covered points to agree to, it was by no means a sufficient agreement to purchase RE. It may not be exactly what I said then but very similar and the same points.
Handwritten it was three pages long. All this did was to 1. let the seller know I was serious enough 2. Makes him stay quiet about selling and think he may not enter into any other agreement until after the inspection. The bar tender photo copied it and he got a copy.
What was funny too was a couple other people making comments about selling/buying property unseen, that quick, we all had fun going through the motions, my seller was sober, I had one beer but the others were under a bit, actually another guy seemed too interested.
I call this a garbage agreement, they may hold up, but the intent of doing such is more to the fact of saying we have an agreement on the spot for a psycological impact to take us to a good and binding contract. I'd stand by every word of it, subject to see the place.
:)