Why is it that everyone is so afraid to talk to sellers? It's so much easier to make a deal directly than to go through a realtor.
When dealing with a realtor, the only deal you can make is the lowest price.
True, there is very little negotiating skill required that way but you will lose many deals if you don't learn how to deal with FSBOS.
The most important elements are twofold: 1.
Establish rapport - people like to deal with people they like.
2.
Determine level of motivation - don't waste time with unmotivated sellers.
The first thing you have to keep in mind that this is not an adversarial action.
A motivated seller is someone with a problem.
You are the knight in shining armor to them.
Think of yourself as that.
You are helping them- you are doing them a favor.
Make a friend.
Ask lots of questions.
Don't be afraid to ask why they are selling.
Try to establish some commonality.
Don't be all business.
Get off the topic of the house every chance you get.
Do you hear a child in the background? You have a child; you have a sibling-anything to establish commonality.
Do you hear a dog in the background? Either you or someone you know has a dog so you can talk to them about it.
The longer they talk to you, the more they will reveal about their true motivation.
Anyone who won't answer questions is NOT motivated.
Move on but call back in 30 days.
The most important thing you have to remember is that people want to do business with people they like.
On the first conversation, you are doing 2 things: building rapport and making friends- NOTHING MORE.
You are probably not even going to make an offer.
You want to find out the information about the house and its condition.
Then you want to know about the loan information.
Lastly you need to find out about why the seller is selling and what they intend to do with the money.
How much cash do they really need and why? If they need all cash to buy another house, you probably can't help them.
You are NOT going to qualify for a new loan to cash them out.
Any other scenario is fair game for you.
.
After some friendly chit-chat about the house, such as size, condition and estimated value, get to the painful questions.
What is the mortgage balance? Are you current? Why are you selling? Do you have a timetable (level of urgency)? How much money do you NEED now (not want)? Can you take a small down and accept payments? Even for a short time to give me a chance to fix the property and find a qualified buyer? Let them know that the more cash you give, the lower the price.
If they understand that you are an investor and this is your business, they won't hang up on you if you make a low offer.
Everyone understands buying wholesale and selling retail.
I have even told them that I agree that their property is worth XXXX, if they have the time to market it (and they better hope the deal doesn't fall through because the buyers don't qualify).
However, if you need to sell quickly, I can help.
Make sure they understand that you qualifying for a new loan is not an option.
What you are looking to do is to either buy all cash at a severe discount, or arrange some kind of favorable financing that you can use yourself or flip to someone else.
The last option is do a lease with option.
Say to them that you can't pay what they are asking or anything near it because you are an investor and are in this to make a profit.
"Should I still come to see you?" Don't leave your house until you are convinced a deal is there.
Pull comps and get a ballpark idea before you leave What you first must determine is what you intend to do with the property if you get it.
You cannot make an offer unless you know up front what your intentions are.
If they seem motivated, hang up and check comps and other listings to get a good idea of value.
Call the seller back and be very friendly and folksy.
Make the offer in pieces- don't just blurt it out.
Build up to it.
Make the price the last thing you talk about.
Focus on the terms and what is in it for them.
They don't care about you- only themselves.
If they hate your offer, say to them, "I hope you get what you want.
Is it OK if I call you back in a few weeks to see how you are doing?" Nothing intimidating at all here, just good folks talking to each other.
Sometimes, in the beginning, if they are being out of touch with reality, you can just be helpful and try to do something for them.
When reality sets in and they realize they can't solve the problem alone, they will remember that nice person who tried to help them.
Don't worry about being professional.
Make them like and trust you!!!! If you decide to go to see them, before you leave your house make sure the seller and you have what they call, "A meeting of the minds.
" You both are in agreement about how the deal is going to go down.
You make the deal on the phone.
You are going to the house to verify your assumptions and get the paperwork signed.
If you think it's worth the drive, leave early and look at the comps so that when you meet the owner you are ready to make a commitment.
Everyone who is on the deed has to be there (or have executed a power of attorney).
Otherwise you have wasted time and money.
Bring a contract with you and be prepared to sign.
Any deposit check is given to YOUR escrow company so you have no risk.
Remember these people who are motivated are in trouble.
You need to give them the feeling that you can solve their problems.
To do that, you need to know as much as possible about their problems.