I made an Offer

Scott Costello All, Blog, Probate Investing 12 Comments

7GeorgeAs I said at the end of my post yesterday, I was going to call up Caller #1 and make an offer.  Having never done this before I was really unsure how to go about doing it, but after some deep thoughts I came up with a good strategy.

First I wanted to sound like I was trying to get him the best price possible. I did this by apologizing for taking a few days to get back to him, but i was running some different scenarios to come up with the best solution for both of us. He said “oh no problem”.

Second, I wanted to get him to say a price first. I took the path of “What do you need in order to sell the house?”  He balked and said “I don’t really need anything” (remember he’s not really that motivated so this is not a surprise).  I was going to leave it alone and come back to that, but he continued and mentioned that he had gotten a previous offer on the house from a rehabber for $175k that he turned down.  Ok, now I’m getting somewhere.

Third, Prepared him for my lower offer (I wasn’t going to pay 175k for it). I started to explain that the buyers I have would want to expand the house to a 4/2 (from a 2/1) and there would be a need to expand the septic and what ever else I could think of at that moment.

Fourth, made the offer. Now at this point I know he isn’t going to accept my (safe) offer of 115k or anything below 175k so I told him I wouldn’t be able to offer him as much as his first offer and only could do 155k (I did not want to insult him at this point just in case he held on to the property through the winter and had gotten more motivated. right? wrong?).    He turned me down quickly.

Bonus information. At this point he mentioned that if he got an offer for $185k he’d sign right now.  I could not do that but told him if things change over the winter give me a call.  He seemed cool with that idea.  He was a Nice guy and I hope he can get what he “needs”.

All in all it was pretty easy to make this guy an offer and I was surprised he came out and told me what the other guy offered.  For the most part I just let him talk and this information, even though he sounded reluctant to give me, just came out of his mouth.  Great advice given to me by reading Bill Guerra’s material.

That’s it for that one.  I’m going to send him a card thanking him for his time (should I put a gift card to Dunkin donuts in it?).  I’ve also got an update on Caller #2 but I’ll save that for next week when I get more information.

Have a good weekend everyone!

PS – I missed a call from Jon Zorrer while I was talking with me JOB boss and when I called him back around lunch I left a message saying “Don’t worry about taking your time to call me back“.   haha whooops!  I corrected myself to what I meant to say “Don’t worry about not being able to call me back until now.”  Hope he doesn’t take that the wrong way.  If you read this Jon, I’m sorry.


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Comments 12

  1. If I might make an observation. Your confidence appears to have increased 10 fold from when I started reading this blog. Heck 10 fold within the last week. Well done on getting over those hurdles. Now's them time to quick it into high gear. The next summit is within sight. (And if your not careful, some other probate newbie I know will catch up)

    Jason

  2. Excellent work. Here's another tip my mentor told me. Just because it does not work for you, does not mean it won't work for someone else. Think about it.

    If you have a realtor in your back pocket that knows their shizzy, and can sell this property at 185k in a heartbeat(maybe even 190-195) (1st time homebuyer credit expires in 4 months, think 10-20% off retail). You could work out something with a realtor where you get x%, or a flat fee referral from the realtor when they sell. Remember…. you are licensed now. You can legally get referals from other realtors.

    Just something to think about, the more arrows you have in your quiver, the more money you can make. Never know, this same exact situation could yield you $1000 bucks next time. ( or you can call back the seller, bur first make a connection with a good realtor, I stress…… GOOD realtor), set up your referal fee and call the seller back. Say, “Mr. Seller, I was just thinking, I know really good realtor, and if you are willing to sell for 185k and use my realtor, they could probably sell this quickly to a first time homebuyer and you could unload this in the next 2 months. Do you mind if I give your contact info to my realtor?”

    Just food for thought. Isn't real estate the best business in the world!!!!!!

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  4. You…Are…Da…Man! I'm actually giddy with excitement for you because you are building crazy momentum over here.

    I've actually found that a lot of people will tell me what they've been offered before. However the difference is that people I've been talking to are in SHOCK over the market decline so they bring up offers they received a few YEARS ago that they declined….my offers are usually less than 50% of those amounts. Kinda hurts their feelings. 😉 I'll find a good deal anyway….my best responses have been on inherited homes (vs. tired landlords) so I'm sticking with that for my direct mail.

  5. Scott, you are on a roll! The momentum is kicking!

    Good way to build rapport by sending a card. I like that idea! That will set you apart from the others. I like Chris's idea as well.

    We are really going to kick it in 2010, I can feel it. 🙂

  6. Hey Scott,

    Way to go buudy! See- it's not so bad is it?

    The only thing I think you want to be careful of is making an offer of 155k if you really can't do anything with the property at that price. I know you don't want to insult him, but what if he were to have called you later in the day and said- “OK, I'll take the 155….”? It doesn't sound like he's the least bit motivated, but you never know…

    Keep up the good work, Scott. Momentum is a very powerful force, so don't let it slip away- keep taking action!

    Steph

  7. Scott,

    Awesome job with the offer. A few tidbits for ya: 1st, no you do not need to send him a dunkin donuts gift card. I understand you're excited cuz it was your first offer but imagine how much money you'd go through in dunkin donuts gift cards if you sent everyone one when you made an offer on their house? You want to get a deal from a motivated seller, not make a friend by giving a gift card (hope that didn't sound mean or anything??)

    Second, Steph was dead on. You can't ever, ever, ever worrying about insulting someone. My thing is they should be insulted when someone does NOT make them an offer. But don't worry about insulting someone when it comes to your offer. Only ever make the offer that makes financial sense because as Steph mentioned what if the dude said “ok i'll take your $155k offer.” Now what? You may be shitting bricks because you got the house for too much and perhaps you can't get rid of it now (ask me how I learned about this scenario??)

    And I have folks tell me about offers that they got from other folks too and either a) I don't pay too much attention to them because you don't know if you can believe 'em or not (ya ever heard the saying “buyers are liars?” Well so are sellers! or b) As Shae mentioned the offers were from a while ago where it's irrelevant now anyway.

    Sorry for rambling….I'm really good at that lol Ohhhh one more thing I'd like to mention. I don't know how you're figuring out your offering price but I highly suggest using Steph's method in her ebook. Reason being I use to use the formula method when making offers and I hardly ever got anything accepted (of course I'm talking about REO's now) but I think in general because if you use the formulas you're # to offer is gonna come in so low that any 'ole investor can just snatch it up. In my area, I find that most investors pay more for a property than I ever would so if I went by a formula, I'd never get a deal. I hope this makes sense?

    So I know your safe offer was $115k……but was that such a safe offer for YOU that you knew it would never get accepted in a million years? Cuz remember your goal is to actually get the offer accepted so you can wholesale it and make some cash……..Sorry for rambling again and if I'm wrong about your “safe offer” you can let me know…..but it's something to think about.

    Now if your “safe offer” really was the acceptable offer for you that worked than that's ok…….but don't offer feel funny about your offers to a seller….you're trying to HELP them. They should thank you no matter what you offer them because you took the time to research their property, talk to them and then make them an offer to help them out of their situation. Some will, some won't, so what???

    Scott……now that I'm done rambling I wanted to say that you did a really awesome job with taking some action and making an offer. Great work! Keep it up! (I hope I didn't come off as a meanie….did I? You can be honest lol but not TOO honest, please. Just teasin.)

  8. Hey Scott,

    Way to go buudy! See- it's not so bad is it?

    The only thing I think you want to be careful of is making an offer of 155k if you really can't do anything with the property at that price. I know you don't want to insult him, but what if he were to have called you later in the day and said- “OK, I'll take the 155….”? It doesn't sound like he's the least bit motivated, but you never know…

    Keep up the good work, Scott. Momentum is a very powerful force, so don't let it slip away- keep taking action!

    Steph

  9. Scott,

    Awesome job with the offer. A few tidbits for ya: 1st, no you do not need to send him a dunkin donuts gift card. I understand you're excited cuz it was your first offer but imagine how much money you'd go through in dunkin donuts gift cards if you sent everyone one when you made an offer on their house? You want to get a deal from a motivated seller, not make a friend by giving a gift card (hope that didn't sound mean or anything??)

    Second, Steph was dead on. You can't ever, ever, ever worrying about insulting someone. My thing is they should be insulted when someone does NOT make them an offer. But don't worry about insulting someone when it comes to your offer. Only ever make the offer that makes financial sense because as Steph mentioned what if the dude said “ok i'll take your $155k offer.” Now what? You may be shitting bricks because you got the house for too much and perhaps you can't get rid of it now (ask me how I learned about this scenario??)

    And I have folks tell me about offers that they got from other folks too and either a) I don't pay too much attention to them because you don't know if you can believe 'em or not (ya ever heard the saying “buyers are liars?” Well so are sellers! or b) As Shae mentioned the offers were from a while ago where it's irrelevant now anyway.

    Sorry for rambling….I'm really good at that lol Ohhhh one more thing I'd like to mention. I don't know how you're figuring out your offering price but I highly suggest using Steph's method in her ebook. Reason being I use to use the formula method when making offers and I hardly ever got anything accepted (of course I'm talking about REO's now) but I think in general because if you use the formulas you're # to offer is gonna come in so low that any 'ole investor can just snatch it up. In my area, I find that most investors pay more for a property than I ever would so if I went by a formula, I'd never get a deal. I hope this makes sense?

    So I know your safe offer was $115k……but was that such a safe offer for YOU that you knew it would never get accepted in a million years? Cuz remember your goal is to actually get the offer accepted so you can wholesale it and make some cash……..Sorry for rambling again and if I'm wrong about your “safe offer” you can let me know…..but it's something to think about.

    Now if your “safe offer” really was the acceptable offer for you that worked than that's ok…….but don't offer feel funny about your offers to a seller….you're trying to HELP them. They should thank you no matter what you offer them because you took the time to research their property, talk to them and then make them an offer to help them out of their situation. Some will, some won't, so what???

    Scott……now that I'm done rambling I wanted to say that you did a really awesome job with taking some action and making an offer. Great work! Keep it up! (I hope I didn't come off as a meanie….did I? You can be honest lol but not TOO honest, please. Just teasin.)

  10. Scott, like you I would have felt that I would be insulting the person with a low offer, but I think Steph and Carey are right, if the numbers don't work they don't work (I have been guilty of trying to make them work in the past ;-).
    What I learned was to not assume that the person will be insulted, if they are, then explain te business nature of the transaction and the rationale behind the offer.

  11. Luis,

    Thanks for your input and I agree completely with what you, Steph and Carey have said. It won't happen again on my next offer.

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