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Negotiating: Selling the Seller…
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A week never goes by that someone doesn’t say to me “how did you find this deal”. It is very rare that I “find” a deal. You have to look at a lot of properties and make a lot of offers to buy a property.
I always make my first offer over the phone, on the first call. I believe that if your not ashamed of your first offer, its too high. You can always go up but it’s hard to come down after an offer. Having said that, bear in mind that you have to get to know the seller and they must like you and trust you or they will hang up on you if you hit them with an offer half of what they are asking. It is also important to note that it is very rare that your first offer is accepted, especially on the first call.
I have worked with some sellers for three or four months before they “give up”. The key is to let them hear from you every week so they don’t think of running an ad, calling a realtor or calling someone else. Each phone call you make to the seller also gives you a chance to get to know them more. The more they hear from you the more they get to know you and the more they will like and trust you. Sure, you are trying to get a good deal but I have met some very nice people that I still keep in contact with.
The following is a list of questions I ask on the first call (in a conversational manner).
- Whose name is the house in?
- Why are you selling?
- Who lives in the house now or is it vacant?
- What is the value and how did you come up with this number?
- What are you asking and how did you come up with this number?
(Note that because I am an investor I assume that their asking price will be less than the value. If not it gives me an opportunity to explain to the seller that as an investor I must buy at wholesale to sell at retail. I use the analogy of a car dealer. If a car dealer has a car on the lot worth $10,000 do you think he paid that for it? No, he probably only paid $5,000- $6,000 for it because he has to make a profit).
- How much do you owe and to who?
- Are you behind on payments?
- What will you do with the money when you sell?
- What will you do if you can’t sell?
- What condition is the house in?
After I have the answers to these questions I can make an offer before I even look at the property. I explain to the seller that I buy between five to ten houses every month and that I only have so much money to work with. Then I say, “If I could buy your house for all cash and close in five to ten days, what is the least you could take for it”? After they give me a number (say $25,000.00) then I may say, “I only have so much money to work with, and I am looking at several other properties. If I could buy your house for all cash and close in one week, could you take $14,000.00?
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 | Larry Goins |  |
Larry H. Goins is not only licensed as a mortgage lender and mortgage broker in North Carolina and South Carolina, he is also licensed in both North Carolina and South Carolina as a Real Estate Broker and General Contractor. He is a member of the North Carolina Association of Mortgage Professionals and a member of the National Association of Mortgage Professionals.
Over the past few years, Larry has served as President (2003 & 2004) of the Metrolina Real Estate Investors Association in Charlotte NC, a not-for-profit organization that has over 350 members and is the local chapter of the National Real Estate Investors Association.
In addition to conducting his own sold out 3 day Dream Big & Wakeup Wealthy Boot Camps several times a year, he is also an active real estate investor and speaks at various Real Estate Investment Associations about investing and finance.
Between speaking engagements and mentoring other investors, he oversees the daily operations of Investors Rehab, Inc., of which he is a co-founder and officer. Investors Rehab, Inc. is a real estate investment company that buys and wholesales 10-15 houses per month to other investors at 70% of ARV.
Larry Goins is also the Owner and a Managing Member of Financial Help Services, Inc., a Mortgage Broker and Lender specializing in Investor Loans. Financial Help Services, Inc. offers traditional and hard money loans to investors.
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Copyright 2002-2011 All Rights Reserved.
Published with Permission of Author.
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