When seller's wont tell you what they think it's worth.

Question

I am curious how you guys handle this. We have had several people off of our direct mail campaign that won't talk numbers at all. We can look up what they paid for it but when you ask them what they think its worth, how much they are looking to get, or even what they invested into it they say nothing. Being in sales I normally go with the first one to speak loses approach but not quite sure what to do here. Do you guys just run comps go 70%-65% of ARV - any repairs and throw out that number? Appreciate any advice you guys can give. I try to better myself each and everyday and this community is a huge part of that venture.

How do the guys that wholesale out of town/over the phone accomplish this not being able to go see a property?

Dev Horn · Answer

A) Someone who won't give you a # may not be very motivated.
B) We get them to say their number mainly because most WANT to tell you their #, but it's just about irrelevant re: the actual value of the house.
C) We try to come back to them with a few options - never just throw a number at them. But of course we present the cash offer opportunity as the fastest and easiest way to get to cash
D) If they are really motivated, they will gravitate toward the cash offer solution, perhaps try to negotiate, etc. If they just blow it off entirely, they were not a motivated lead to begin with...

Michael Quarles · Answer

Ryan  D. wrote

Being in sales I normally go with the first one to speak loses approach but not quite sure what to do here. I dont agree...

I think that you can have a very good conversation with a seller about a lot of things and be the first one to say something. What I don't believe you can do is throw out numbers for the sake of saying something. And a seller who will not tell you their number is either 1- not motivated or 2- afraid of saying something silly or 3- fishing...

On my 5 questions that I ask there can be a whole host of conversation between q1 and q5. However my job is to obtain the answers in a way which causes me to believe the seller is in reality land.

So if a seller says they aren't certain about value or that you sent them something or what ever... Ask them.

If you are asking me what I would offer that would be a really low number. Would sell me your home for a fair price minus the normal cost of selling, things like commissions, fees, taxes, repairs, holding costs, and the other costs involved? So if we came to a number that was a win win for both of us you would sell the house.

What number does that have to be?

Richard C. · Answer

I have been that guy. Called a guy who sent me a letter. Wasn't looking to sell especially, but always willing to listen to offers. I tend to get letters after the towns update their assessment lists, I think they are just looking for properties with a taxpayer address different from the property address.

Anyway, here's the deal. HE contacted ME. Wrote a lovely little letter. You want to buy my house, that I don't have offered for sale? Fine. How much are you offering? Again, you contacted me. How much do I want? 100 million dollars. That is more than you had in mind? OK. So what did you have in mind?

Am I motivated, whatever that means? (Usually means under duress, but people seem to be more comfortable with the idea that they are helping the motivated rather than preying on the desperate. But I digress.) No, I guess I am not motivated. So why did you contact me again?

Chris L. · Answer

@Ryan  D. When we have callers who won't give a number, I try to ask a couple different ways. ie "What do you want for the property?" "What is the least you would accept for the property?" If that doesn't work, I do some sleuthing. I have already collected info on the property and I'm probably already looking at it at Zillow, so I have an idea of market price. So then I need to determine their motivation. I ask "When were you hope to sell by?...How come? Are you moving?...What were you thinking of using the funds for once you sell?" I just ask a LOT of questions. Rapport is key.

If they just want me to come take a look and make an offer, I tell them  (as Michael Quarless suggested) my formula for how I will come up with my offer. I explain why we won't pay full price, we are investors, we pay 70% of market price minus holding costs, closing costs, etc etc and repairs because we usually modernize the kitchen and other rooms in the property (this is helpful when people think "but my house doesn't need repairs"). Once they see the offer size being whittled down, if they are still interested, then it sounds like they are motivated enough for us to keep working on the deal or at least keep in contact with them.

Ryan Dossey · Answer

@Jeremy Timko We are not looking just for wholesale deals. We actually have targeted areas, equity %, type/size of home, etc. We are actually more interested in rentals and flips. We are trying to utilize our leads all that we can. We do have a Realtor who we refer our retail leads for in exchange for a % if it sells.

@Michael Quarles Thank you very much those are the rebuttals I am looking for.

Peone Lee · Answer

what is the actual value of this property ?

Colleen F. · Answer

Bill Gulley  that was happening to me the other day too but not today.  It seemed like something was running in the background.  An ad or something?

As for the actual topic of the thread  I would say they don't know what they want so you have to bring out your sales technique to see where they are going or whats driving them selling. You can probably let that inform your offer (your low or high end). I am hoping some of the experts have words of wisdom.

Sean Brooks · Answer

Ryan  D.

said. You sent a letter to a owner that did not say they wanted to sell. So your basically fishing and a person response. It doesn't mean they want to sell. They want to find out why a total stranger would want to buy their home that's not for sale. So their not going to reveal an actual number because they want to know what you want to pay for it.

It's different types of sellers:

One that's in financial stress (distressed) is a motivated seller - they need to get out today. You also have a percentage that will seek help of a professional to sell.

A FSBO - they think they can get more money for a property than paying the commission to a realtor. A nice percentage never sell and turn to a Realtor.  It's reason why this happens. You may be able to purchase but the problem here is that the owner normally thinks the property is worth more than what it's worth.

A seller that has no idea and can clearly see they can't sell on their own - they contact a Realtor and may have used one in the past.

One that inherits a property can go any route.

Now today how many people are distressed is the question? This is your target audience.

Jeremy T. · Answer

Ryan  D.

It sounds like you are using a ‘throw a bunch of leads at the wall and see what sticks’ marketing approach.  I assume you are strictly looking for properties to wholesale?

Dancing around with sellers who aren’t even motivated enough to give you a ballpark price sounds like an enormous waste of time and energy.

My suggestion is to refine your strategy to filter out these people either via the response mechanism in your marketing or by being more transparent with what you plan to do/offer.  You will probably get a few (more) people telling you to go make love to yourself, but you also don’t have to sit on the phone all day trying to pry information out of a dead lead.

Also, hooking up with a realtor to whom you can refer retail-only leads to is not a bad option.

Teal Lambert · Answer

Provided you are sure of the value of the property I wouldn't politely offer them a very low number and see if they counter your offer. If it isn't even in the ballpark. Just walk away but be nice about it. You never know when they may call back.

When seller's wont tell you what they think it's worth.

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