Do any wholesalers out there make a cash offer no matter what?

Question

Hey, guys! Any wholesalers who make it "company" policy to present a cash offer to a prospective customer - no matter what? I know it seems like a small question, but it seems like a good company policy to me. Staying true to that commitment could be a very good incentive to bring customers in. But how would you throw an offer out there (that you get a really good sense that the customer won't like) without him or her laughing you off? Or is that just part of the business?

I really want to always make a cash offer; I just don't really know how.

Andrew Newlon · Answer

@Stephen Ross,    @Brandon Sturgill makes a good point. Sometimes homeowners, and even other investors, don't understand what a "cash" offer means. Please do not show up at the house with a briefcase full of cash.  You are heading toward trouble in several different directions. If someone questions what your cash offer means, explain that you have cash funds that are going to be wired to the title/escrow company. Thus, eliminating the need for banks that require long processes including appraisals, inspections, waiting periods, etc. Simply put, you are able to buy their house quickly with no contingencies (if desired). Wholesalers certainly get a bad name and bruise the industry by putting houses under contract they cannot fulfill. A good policy to have is to have the means to purchase the house yourself if you cannot assign/sell to an end buyer. I usually tell the sellers that I may not be the end buyer but rather one of the investors I work with may buy it instead and pay me a fee. If they are motivated, they do not care who buys their house as long as their problem is solved. Remember, we are not providing a service to homeowners that would like to sell their house for top dollar and are not in a hurry.

Account Closed · Answer

I never make an offer without seeing the condition of the property. It is very important.

Account Closed · Answer

It depends on the situation with the seller and the condition of the property. Also when I have a house that is worth more than $150k and needs no work I offer full market price if the owner will take seller financing. So it depends on the property and situation.

Chris Boyd · Answer

All of the above. It simply depends on the seller. You have to be willing to have multiple contact with the seller and negotiate. Do the inspection, and negotiate some more. Most older folks like mail, younger like email. Even if they reject the offer, send them a contract. You never really know their situation.

Brandon Sturgill · Answer

@Stephen Ross there is no such thing as a cash offer...most of what I dislike about wholesalers is the dishonesty and confusion that they bring to this industry. So, are you going to show up at my door with a briefcase full of money...shit no, that just does not happen...you need to run through title/escrow like every other real estate transaction. And, if you are not taking title, you need to be honest about it...let the individual know that you are not the end buyer! Don't start this business of on the wrong foot by being deceitful and pretending that you are the buyer when you are not.

Cheers

Account Closed

Andrew Newlon · Answer

@Stephen Ross Food for the thought. Most people say to make an offer regardless if you think they will accept. This has a lot of benefits to include some already stated: allows them to come back to you in the future, you truly can't assume what they will take, for every x-number of no's you get a yes, etc. However, I have found another technique that works for us. Our market is saturated with investors and wholesalers; all of whom make the same low offers to sellers. When I begin to negotiate a purchase price with the seller, I can quickly determine how far off my offer is from what they are wanting and how likely I am to negotiate them down. If I feel my chances are highly unlikely, I will explain that I can't make them a fair offer right now. I show them respect for their house and the value they want out of it. I even suggest other alternatives other than selling to me (this does present a great opportunity to introduce baby negatives for the other alternatives). The key to this is FOLLOW-UP. I have completed 3 deals recently where I called the seller up and found them to be more motivated and willing to take a lower offer several months later. Account Closed made a great point that it depends on the situation with the seller and the condition of the property. Hope this adds a new perspective.

Andrew Newlon · Answer

@Stephen Ross Sometimes sellers need some time to come to the realization of what their house is truly worth and/or the amount of repairs needed. If it is a thorn in their side, that thorn is only going to grow over time. We find that almost every time we visit a house, at least two other investors have as well. If they choose not to accept any of our offers, then it is my goal to be the one that stays on the top of their mind months later.

Stephen Ross · Answer

@Andrew Newlon, what made those three sellers finally choose you in the end even though the offer was lower?

Jonathan C. · Answer

I make an offer to just about everyone who calls me off my direct marketing. Even if we are $200K apart. I usually have my mail guy print it off and send to mail.

Sean Terry recommends this and it makes sense to me as well as when someone gets hard copy contract in mail becomes a lot more 'real' to them and more likely to take it seriously.

Stephen Ross · Answer

@Chris Boyd, it sounds good.  You said, "Send an offer off."  Do you typically make offers for houses over the phone or via mail or computer, etc.?

Do any wholesalers out there make a cash offer no matter what?

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