What to do?

Question

I have a question on how to structure an offer or should I structure an offer.

Sellers are calling from my postcard mailing but I am finding ALOT are not in distress but they want to sell . For instance...

I am talking to a seller who has a house for sale. The house is listed with a Realtor so it is move in Ready. It is appraised for $117,500k and is on the market for $115,000. It is move in ready so obviously it is not ideal for wholesale. What would be a good way to try and get a deal on something like that? I run into quite a few sellers that want to but do not need to sell and I dont want to just throw those leads away. They are either listed with a Realtor or They are not listed with a realtor and the owner wants to sell but it is a very nice house.

Josh James · Answer

@Ned Carey In Texas, we know what it is appraised for because our County Appraisal Districts conduct annual appraisals of all property. I am not sure what you mean by tax assessment? I do not think we have those. Harris CAD has a nice FAQ on it. http://www.hcad.org/resources/propTaxProcess.aspIn Wichita Falls, where I think @Matt Ellis is marketing, the tax appraisal is a pretty good guess of the retail sale price of non-distressed properties. Rick H.In marketing, we cast a large net, and sometimes we catch things we aren't fishing for. I think he is trying to find a good use for all the "throw-back" in his catch. I also do not have a good productive use of my not-so-motivated-seller leads. They go in the trash now. Do you have any good suggestions? What do you do with yours?

Ned Carey · Answer

First how do you know what they are "appraised for?" My guess is you meant "assessed for" In other words the tax assessment. The tax assessment is usually a very poor way to judge the true value of the property. The best deals come from motivated sellers. If they are not motivated I just move on and don't waste any time with them. I used to pass unmotivated leads to real estate agents and short sale specialists but nothing came of it. If you get a ton of leads then trying to find a way to get something from them might be worthwhile. It wasn't to me.

Matt Ellis · Answer

Hey Rick H. . I am not Marketing to Retail owners. Some call from my postcard mailing. If they are listed, they will say something like, the listing is coming off soon and if there is anything I can do? I know they are not a good fit for wholesale, I just wondering if there is anything else that could be done.

Rick H. · Answer

The objective is to monetize every lead so that nothing gets wasted. Much like how a slaughterhouse uses every bit of the hog, except the squeal.Start by creating symbiotic relationships with your competing/like-business folks that you normally bash heads with. Develop host - beneficiary arrangements whereby you refer deals to them for a fee, % of, or other arrangement. Your conflicts will be reduced or eliminated and there will situations where you get treated to deals that you might otherwise have never closed on. There are so many other strategies and tactics to monetize leads it's amazing. I'm not about to share a long list on a free forum so don't expect that to happen. I'm at the Titans event in Stamford for the few days. A smart investment, IMHO.

Ned Carey · Answer

@Josh James in most states what TX calls a tax appraisal, is called a tax assessment. It is generally not a very good judge of true value. Perhaps TX does a better job with it than most.

Rick H. · Answer

Huh? You're marketing to people who want to retail their house?What is the perceived added value that you propose to offer that an experienced agent does not? Are you sitting in a pile of money and able to close in 5-10 days? Or, are you someone who hasn't done many or any deals yet and you're trying to find a way to tie a property up and extract a "wholesale" fee? I'm not being judgmental, however I'm trying to understand what would cause you to consider or even attempt yo work with people who aren't motivated in the first place? If the latter is true, I suggest that you start working with distressed property owners and drill down the reasons that motivate people to trade equity at a discount in return for something that can or will do that others won't.

Sean Brooks · Answer

Matt,A smart owner of property (asset) wants to get the maximum profit from the sale of a property they own. See if they don't have it for sale and you come knocking, that tells them its worth something. And if your using the absentee strategy, it could be others doing the same - they may have received a mailer from another person. Now that something can be what they feel it's worth and that feeling can cause them to think it's worth more than it truly is. This happens because their personally attached. Now when a person wants to sell it, they place a for sale sign up ---- come up with a price either on their own or if they list with a Realtor. If offers continue to come in lower then the asking price --- they normally then start to think everyone has it wrong. That means it's priced wrong. Only distressed, another owner inherits the property and don't want, or their uneducated owners sell their properties for cheap. You have to continue to hunt, keeping sending mailers, you will run into the person your looking for.

Matt Ellis · Answer

Thanks Ned. One in particular was actually appraised. But I understand what you are saying.

Matt Ellis · Answer

That is where I send my direct mailers to as well. Alot of these owners used to have tenants but no longer want the property anymore. Even those that are not listed with realtors still want close to what their properties were appraised for.

JPaul Mills · Answer

well if they have their house listed with a realtor then they have a contract with that losing agent and you aren't able to put that house under contract to wholesale unless you jump though some hoops. When it comes to marketing for motivated seller I generally send my direct mailers to properties of absentee owners that have had the for at least ten years or more. There is a better chance that they either inherited the property or are a landlord that might not want the home anylonger. I have found that this works for me.