Last week, I had my first conversation with a seller. He didn’t have a price in mind - told me to “look up what houses are selling for and deduct my repairs”. At the same time, he doesn’t want to show the inside of the boarded up house to me until we talk money.
He wants to meet for coffee and talk more.
I did a market analysis, I got some contractors to give me some estimates based on what the seller told me is needed (and what I saw from the outside) and I have an amount in mind that i want to offer him.
How do I approach the conversation? Should I just tell him my offer? What are your tips?
Do not give him a specific price ever until you see it and assess it.
You can give him a window of price: Based on my numbers, homes like yours are selling between 200k and $300k
or $500k and $600k etc
The first step is for me to walk the home and assess it visually: from there, I will have to walk the home with a contractor to make sure that I know what I am walking into. Would you buy a car with out test driving it, no... right. I think you can get in my shoes. What would you suggest to your daughter mr. seller. (let him answer).
This is my first home purchase and I want to make sure that I don't make a mistake. You seem like a 'fair' and honest guy to me! and why I am doing business with you. I am as honest as they come also. :)
Lets go for coffee so that we can get to know each other and feel comfortable with each other.
While face to face: What's important to you? What is your goal? (aside from making the most money possible on this sale?)
Get to his motivation: Give him options that work for you:
1. Option one: lets do the right thing and walk the home: assess it: and then decide on a price ( I suggest the price to be: Price minus - Repairs minus - commissions (5%) )
2. Option 2: If we are not going to look at the home: then my best offer will be ARV x 70% : purchase price
The seller has to feel confident that you can close the deal, That you can pay, and that you know what you are doing.
They also want to sell the home for as much as possible and they know you want to buy it for the least possible (so say that and address the elephant in the room). Its ok :)
many times: you can give the seller what he wants (price ) and then do inspections and negotiate to a price that works for you or walk away.
Many, many, many times I see buyers not wanting to spend on inspections, appraisals etc or not wanting to go through the long process and then negotiate a good price.
If you meet 5 of these sellers: and spend on average $1k for inspections on each : that will be a total of $5k spent but you get one offer accepted for the price you want: will that be cost effective.
I say yes!
Let me know if you have any questions
Whats goin on Sandra,
I've dealt with every type of buyer you can imagine and here is my advice.
Wholesaling is all about efficiency.
I am currently locking up 8-10 deals a month and some properties are in different cities. Keep in mind there is no way I would be able to scale my business if I was meeting face to face with every seller. My job is to vet a seller over the phone and determine whether he/she fits my criteria - ask for details about condition of home, time frame to sell, why they are wanting to sell, and finally price. Your job is to secure an agreement - then and only then do you go by in person and assess the property ( I don't even do that, I let my buyers go out there for me)
There are many ways to run your wholesaling business, this is the model that works for me.
Best of luck.