In previous “Lessons from a High Volume Wholesaler”, I covered the importance of making a quick decision so you don’t lose the deal or get into a situation where you have to pay more.
I also covered how some sellers are price sensitive and insist on getting their price, but you can still make the deal work by structuring terms that make the numbers work for you.
If you’re working with a motivated seller, you can almost always make a deal work.
After you analyze the comps and evaluate the condition of the property, you’ll come up with a number that is the most you can pay. That number is NOT the number you should offer to the seller because you need some wiggle room.
In fact, it’s better not to make offers at all. Instead, ask the seller what they would take for the property if you paid cash and close quickly.
Let the seller tell you what they will take. And keep your mouth shut about what you have determined is the most you are willing to pay.
Sometimes you’ll be pleasantly surprised that the seller’s magic number is much less than what you were willing to pay. You may be willing to pay $75,000. But the seller might be thinking if they can just get $50,000 they will be thrilled.
So, don’t make offers – ASK what they will take.
That brings up another issue. Many investors ask the seller that they think the house would be worth.
That’s a HUGE mistake.
The seller does not have a clue what the house is really worth, so their “opinion” about the value is completely irrelevant. Don’t ask them – they are a civilian!
Hey, you are supposed to be the expert here anyway aren’t you?!
If the seller tells you their house is worth $150,000 and you’ve determined that you can’t pay above $80,000 – then you’ve got to spend a lot of time trying to “justify” your lower price. The seller will be disappointed at your price and possibly insulted to the point where they don’t want to work with you.
If you never ask them what they think the house is worth, then you don’t put either of you in that uncomfortable situation.
How do I know this stuff?
It is from 20+ years of talking to LOTS of sellers and buying LOTS of houses. I’ve made the mistakes so you don’t have to. I’ve also figured what works best.
I’ve offered $75,000 on a house, only to have them tell me at closing that they would have been perfectly happy to get $50,000. Ouch!
I’ve asked sellers what they thought the house was worth, ( hey, that’s what they teach in all those expensive seminars) then had them chew me out when I told them the best I could do was half of what they thought the house was worth.
There’s a way to say and do things so everyone walks away from closing with a smile on their face. It’s the little things that make a HUGE difference.
Once you get past the learning curve, your wholesale business can be a “money machine”
In all the years that I’ve been buying houses, I’ve developed SPECIALIZED KNOWLEDGE which enables me to get a high volume of leads so I can talk to a lot of sellers so I can do a high volume of deals… consistently.
Now it’s your turn!
Best of Success…and Freedom,
Jackie Lange
