After talking with Lance and going over our list of repair costs with our coaches, I called up the owner of the house and pitched my offer. It was significantly lower then the 250k that I mentioned in a previous post. Enough so that it might insult the owners big time. But hey, as they say if you aren’t insulting someone with your offer it is probably to high.
I haven’t made a lot of offers on houses, but I like to present them in a certain way that seems to disarm the person a bit. The idea is to prepare them for your low offer instead of just shooting it at them from your hip. Here is a quick little 4 step process I use before giving them my offer…
- I restate that I’m running a business and must make an offer that works for me and it’s not intended to offend them.
- I let them know my offer is probably lower then they were expecting
- I list some big ticket repair items that need fixing
- I mention that my offer is an option for the home owner to think about, but also comes with the advantage of a quick closing, all cash and no hassles
In the end, the seller will most likely come out and ask “So what is your offer?” At that point I will tell them. I’ve yet to have anyone angry with me or seem overly insulted.
After I make my offer, I stay quiet and wait for them to say something. I’m still learning how to read their reactions, but what I am trying to listen for is a hint that the seller hasn’t totally dismissed me.
With the Bloomfield house, the owner said outright that it was significantly lower then what they were hoping for. I could then almost see him trying to reason why my offer wasn’t so bad as he mentioned the fact that if he went with us there would be no commissions payed out and the certainty that we could close. It think that is a good sign.
I still have no idea if we will ever hear from the owners again, but I’ll follow up with him in a few weeks to see how they made out.
Additionally to making an offer on the Bloomfield house, Lance made an offer on a house in Chatham that came from a probate lead. We looked at on this property on Sunday. The house was about 90 years old in a very well off area that saw houses selling for $600k all the way to 1.2MM. This was definitely the ugliest house on the block and we figured it’d take about 65k to repair what was wrong.
The house was listed yesterday after our offer was rejected. The owner said the land was worth more then what we had offered. Probably true, but the land has a house on it that is 90 years old and needs 64k in repairs. Just saying….
We will follow up with her as her listing gets close to ending.
At last nights REI meetup we had a Vena Jones-Cox as a special guest. She is a good friend to my coach, Jon Zorrer. The little 15 person meetup group has now exploded to over 100 members. It’s good to see. Vena’s presentation was more for the newer investor, but I still learned a lot because she has a unique way of explaining the workings of a wholesale deal. If anyone ever has a chance to see her, I would recommend you do.
Next up this week is my Mastermind group meeting tonight. I’m going to bring up how to evaluate pricing land and finding cash buyers for a house in a wealthier area.
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