Posted by Charles Parrish on March 04, 2007 at 20:52:15:
Common sense always works when talking to sellers of real estate.
A well written script is also nice to have, but do not depend on it to smoke out the unspoken motivation of sellers.
Take a look at the basics; what are investors trying to accomplish when talking to seller?
They want and need to know how much equity is available and how to get it!
They also want to know how to get it fast while using leverage and with as little personal funds as possible.*
So many apprentice investors are looking for the panacea of creating wealth in real estate, they are looking for the unique, easy, no work involved method of latching on to some equity based real estate; they are pitched a number of exotically named system; ?sub-to?s?, ?pre-foreclosures?, and the many nothing down techniques that are being pitched on the inter net and at investor clubs.
The only way an apprentice or seasoned investors is going to achieve short term as well as long term cash flow and cash profit in real estate is to control property at an equity profit, to work, practice and to make offers.
There is no future in paying retail for real estate unless you are willing to wait for the future to arrive with your profits.
I, as well as other investors I know are not willing to wait many years to realize their profit. We want it now in hand or equity secured by their real estate holdings.
Here are some questions to ask to smoke out seller?s motivation:
Do you need a fast sale or top price? (There are follow-up questions to the answers)
Are you building a home or moving out of the area?
If I could meet with you Tuesday to make you an all cash offer, no commission or settlement cost, could you accept $__________. (This is part of a Trial Offer System I developed a few years ago.) Your offer should be about 15-20% below whatever their asking price was. If they counter with any price below their asking price, your Trial Offer was successful. Next is the ?Second Stage Negotiations?, the inspection.
How fast would you like to settle?
Is that the best you can do?
Always ask what they ?Need? not what they as ?Asking?.
Seller always have two prices; the price they want (asking price) and the price they ?need?. They may be asking $100,000, but really only need $80,000. The $80,000 is their base price.
Real estate investors need to FIND THE BASE PRICE or NEED PRICE. By perfecting the Trial Offer Method of smoking out the motivation of sellers, this can be accomplish.
? Build rapport, talk about price last
? Tell your story; people like to do business with people they like or whom they can identify with.
? Let the seller know why you are interested in there property; Mr. Seller, my goal is to earn a small profit in real estate, if I can do that with your property, I would be interested.
? Make it personal; my wife and I purchase properties for our personal portfolio, we usually make cash offers. We are buying real estate for our family trust.
? Never disclose that you are an INVESTOR. There is absolute no benefit to you by disclosing you are an investor. This statement can cause unnecessary suspicion and a natural distrust.
? If you intend to flip the property or assign it quickly, make that disclosure.
- Create credit lines and use them to make all cash offers with fast settlement. Be ready with cash reserve when bidding a auctions.