How to negotiate with absentee owners

Question

Karl James · Answer

@Sven Jessica

I've done less than 10 deals,  all vacant land, and all the "buys" have been with out of state owners.  I have negotiated the deal (buy or ell) - which really means agreed a price and a closing time frame verbally (on the phone) with a commitment to send them a contract.  I get their e-mail while on the phone and then send them a signed PDF copy of a contract for them to sign and return by scanned PDF document.  I then take this contract to along with an earnest money check (if I am the buyer) to my local title company (which I specified in the contract).  I let the title company guide me from there.   At some point in the future I could elect to close with out a title company, but for now I appreciate the service they are providing.

Sven Jessica · Answer

I agree. I'm a person who follows that same rule- don't over think things. I just wanted to get some insight about how negotiating with absentees are. Obviously we are jumping in head first into cold water in a sense that its our first campaign. I want to be as prepared as possible. You can read and listen as much as possible but nothing will beat real life experience. Thank you for your input!! Just a little nervous about this one...

Sven Jessica · Answer

Thanks! obviously I won't take a plane at this point to anywhere unless something big is cooking and at the same time how would you know? But like I mentioned my partner lives in NJ and more than half of the mailing pieces went to NJ, CT, NY, PA etc. so maybe that can help me, I really don't know... maybe someone can chime in regarding that?!

Sven Jessica · Answer

Thank you very much for your input. Very good points and ideas, things that I can definitely use!! Im excited!

Karl James · Answer

@Sven Jessica

I don't know if it is of any help but there's a BP blog entry I wrote talking about how I got my arms around making cold-calls.

http://www.biggerpockets.com/blogs/6020/blog_posts/41602-cold-call-paralysis-how-i-am-attacking-it

It is good you have a partner nearby - they may come in handy.  But, I've been able to develop a good rapport with folks over the phone.  I just closed this week on a purchase from an owner in CA (I'm in TX).  I initially talked to her by phone in January.  She wasn't sure she was ready to sell, then.  I asked her if I could check back in by e-mail in a month.  She gave me her e-mail and I did.  They said they  gout her e-mail address and.  When sent her a note in Feb she said they had been thinking about it and would call me first if they decided.  She called me back and she sold me the property for what she bought it for 8 years ago - she and her decided they'd rather have a quick cash deal than try to market it from out of state.  I have in under contract to sale / close in 4 weeks.

But, you will get a lot of "No's".   Many more "no's" than "Yes or Maybe".  Just be courteous, ask them if they'd like you to check back in with them in a few months / 6 months, etc. - then get an e-mail.   I they say they aren't interested in you checking back ask them if you can send them a business card or contact information in can anything changes down the road.

Sven Jessica · Answer

Thank you for your input! This place (BiggerPockets) is just unbelievable. Thank you all!!

Richard Anthony · Answer

If the seller is out of state it is no problem to close a deal over the phone provided you can get access to the property to do your due diligence somehow. There is no reason for you to spend money flying anywhere and most times if the seller doesn't want the house they may not want to come back to where the property is located.

Title can send docs to the seller for sigs and to get notarized and fedex back.

Account Closed · Answer

well you would know by how motivated they sound over the phone.  im assuming that those mailing pieces also have a home in your area (hense the landlord targeting).

i dont think this is something you should worry about at this time. once you find someone who says " i need money i need to sell asap" i am going through a divoce i need to sell asap" this property is a huge pain i need to sell asap" etc.  i would start to think about this, because honestly, its the least of your worries.

one thing i learned about real estate is , DONT over think it.

at the point where they say that they need to sell, ask them what their bottom line is. if its not cheap enough for you say "is that really the lowest you can go"? when you talk to them, they need to convince themselves that they need to sell it.

Sven Jessica · Answer

Sounds good. Im just thinking basically going negotiating on the phone vs in person. If that makes any sense. As I previously noted, most podcasts and posts always say, don't try to make a deal over the phone, which will be and is (I'm sure) hard to do. But since you said you have done that, I will feel more confident trying to do that. This is my first time so I will try to rock out any position I will find myself in.

Also on a sidetone I noticed more then half of my absentee owners are located in NY, NJ, PA, CT area and my partner lives there (NJ) so maybe that could help us out in a sense that if needed he can go and meet them?! Maybe I'm going over board here..., just shooting out ideas:)

Account Closed · Answer

well if they live that far away im assuming you wouldnt take a plane to sign a contract unless it was for a hundred grand.

weed them out over the phone. you can figure out their motivation . if they arent, move on. if they are, check it out and proceed

How to negotiate with absentee owners

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