What To Say To Sellers After they respond to mailer?

Question

When I get a call from a seller who is responding to my letter, what is the objective of the first contact? Is it to establish their motivation and set up an appointment to meet with them in person?

Account Closed · Answer

Try getting in "How can I help you?" in the first sentence or two.  If you listen more than speak, it can open up a conversation where you find out the seller's needs, wants, and motivation.  In other words, you might actually be able to help them.

I understand Ned's advice about making appointments when getting started but not sure that works for everyone  My original farm was 150 miles away.  So, I never made appointments to see the house in order to make offer.  Most of the sellers were out-of-area anyway and needed an offer without a showing.  We made a deal contingent upon my inspection or drive-by.  I continued to do that, even with owner occupants.  These days I still only make an appointment after we have reached a mutually agreeable price or price range.

Ned Carey · Answer

Bradley White I will contradict the others slightly, but I bet they will agree.   When you are new, the goal is to make an appt to see the property. Go look at everything. This is a way to learn the market and get comfortable talking to sellers.

However once you get to that point the goal is, as ken and Doug said, to determine the motivation level of the seller and determine if their might be  a deal here. Once you have the experience and confidence don't waist a minute going out to see a property that you don't already now is likely to be a deal.   Good luck - Ned

Jason Carter · Answer

Thanks for this post @Bill S. I know it's 2 years old but I was researching how to get a number out of sellers. Very few will give me a number so I know that's an area where I have to improve. Going to try your approach.

Bill S. · Answer

@Brian Huber Based on what I know from negotiations, the first one to give a number is the looser so I always try and get a number from them. If they won't give a number I'll say something like $10 and laugh. Then I tell them, they know the property, the condition, the bright spots and the flaws so "tell me what it's worth" Once they do that then I get some more information on condition etc and then ask what they will take for it.

Ewa Reza · Answer

Los Angeles prices change so rapidly that property owners often are just curious about the value of the offer and that's it. I'd say that majority of the time they feel insulted coz they go on Zillow and see the "zestimate" $200K higher than my offer!  As a US resident Obamacare is what drives me crazy, as an investor and real estate agent Zillow is the number one thing that annoys me the most.

Ned Carey · Answer

Bradley White ask whatever you can up front. Eventually you want to get to the point you don't even go met with them unless you know you already have a deal. That takes practice.

But what you don't find out up front or don't think of until later you ask when you meet. Often you need to ask the same question in a few different ways before they answer.

There is no magic number of contacts. Generally you want to get a deal as soon as you can but if you can't keep following up until either they sell it to you or someone else.

Doug Pretorius · Answer

Ken's right about finding out if you and the seller are in the same ballpark, although his numbers might not work for you depending on your investment strategy.

Ask them what they NEED (not what they want) for price, and if you're interested in taking over their mortgage, ask what they need per month too. It never ceases to amaze me how low of a number some sellers reply with to that simple question. And with the unmotivated ones you can just thank them for calling and be on your way.

Kian Golchin · Answer

I had a similar situation with a landlord, it was a house with a guest house in the back, two separate tenants

landlord wouldn't let me inspect, I reached out to him via DFD, place was beat

he was hard to negotiate with but assured me that the tenants would be out if I purchased since he said they were both on month to month leases

he wanted too much for the place and was local, seemed like he was just testing the market since its so hot here in Los Angeles, place was distressed but not a lot of motivation from him

I did give him an offer though just basically assuming the place needed a lot of work, I calculated $35sq ft for rehab, I went higher with him and used 75% of ARV minus rehab and hard and soft costs

he was a little insulted by my offer but LA is a tough market

John Southard · Answer

I agree with @Ned Cary.  As someone new like you I have gained valuable experience going out and looking at properties, even when the seller was not extremely motivated.  You have to start somewhere.   When they call run the comps on the house and determine if their price fits your criteria.  If it's close then go look at the property.  If anything you get experience meeting sellers, going through houses looking for issues such as foundation problems, leaky roofs etc.  Only then can you determine you final price.  Some on this board may say I'm wasting my time but after looking at many houses you will hone your skills and be in a better position to know a deal when you see one.   
I looked at a foreclosure not too long ago that I was interested in but I didn't think I could get the bank down to where I need to be.  I went through the exercise of figuring out the rehab costs, paint, drywall, appliances etc.  I learned a lot just doing that exercise.  I didn't get that property but when I look at future properties I will be more proficient in calculating renovation costs.  
When you get to the point where you can calculate a price quickly then your initial conversation will be primarily to determine motivation.  If they aren't motivated you probably won't get the price you need to make money.

Bradley White · Answer

Ok thanks! I'm definitely taking notes. BP is a gold mine! lol

What To Say To Sellers After they respond to mailer?

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