what am i doing wrong ?

Question

Hello everyone haven't posted in a few days. Here's the situation :)

I'm trying different approaches to wholesaling, when I communicate with the home owner. Here is a quick recap.

1. Didnt tell.the home owner anything about me assigning the contract. His questions were why do you need access to the home? Why do you need to bring other investors and partners to come look at the home? Those where his main concerns. With me giving good reasoning I lost the deal.

2.  found another house. Told home owner exactly what I was doing.  Seemed ok with it until I gave him my paperwork. He immediately said he wasn't interested. Ask me why don't I pay for the house then resale it. Basically lost this deal.

I found another home that is for sale by owner for 199,999(asking price ) . I can get the price down because of the home owners situation.

I want to make sure I don't miss out on anymore deals because of my approach.

When you explain to the home owners what you are doing, what  explanation do you give the home owners step by step. I would love to read some seasoned wholesalers approcah .  I'm reading every where the seller has to be motivated and in both scenarios they were motivated because they dropped the asking price  significantly.

In both situations I built rapoure with both home owners.

If anyone can let me know there explanation process I'd greatly appreciate it.

Thank you 
Exscue typos I'm.typing on my evo.

Will Barnard · Answer

Aaron,
I am not a wholesaler by trade, but an REO rehab flipper and I do, on occassion, wholesale some property. That said, it is always an REO and not a private and motivated homeowner/seller.

That said, you should be telling the homeowner only things that they need to know. As you may know, being a good listener and problem solver is key, so once you evaluate you have a truley motivated home seller and you know their problem, you must be able to find a solution and good negotiating techniques really come into play here.

What you should be telling them is that you can solve their problem and buy their home for X price and once you have agreed to terms and contract provisions, you get it under contract. Make sure you have in your purchase contract the right to assign and the right to inspections.

You should also already have a large database of all-cash buyers looking for the specific property you have contracted.

At this point, you then use your contract provisions of inspections to bring your home inspector (ALONG with your cash buyer) to view the interior. You should also get pictures of the interior prior to this inspection to show prospective buyers and ONLY if asked, you explain that you must take pictures of the existing condition so you can refer back upon your final walkthrough.

Never are you legally obligated to inform the seller that you are wholesaling the property so long as you have the assignemnt clause in the contract (or at least that it is not prohibitted).

Hope that helps.

Jon Holdman · Answer

Because the inspection is always done after the contract is signed.  It would be pointless to spend the money on an inspection without a contract.

You say you're calling FSBO's.  I think this is an execise in futility.  These are probably either investors looking to move their fix and flips or owners who think they can net more money by avoiding using an agent.  This question along (inspection before contract) shows these sellers don't understand the process.

Will Barnard · Answer

I too use the state contract for purchases in most cases.

To comment on what Jon stated, calling FSBOS is one thing, attracting motivated sellers through bandit signs and other marketing means is a different animal. Many FSBOS are in fact what Jon described. But leads from investor marketing are often those that are not listed on the MLS or FSBO, they are potentails for good deals if you get enough of them and weed out the poor ones. Don't waste time trying to turn a deal into a deal. If it is not a deal at the start, it usually will not be at the end either.

Jimmy C. · Answer

My approach is the Same as it would be if i bought the home. Imo its best to think like the end buyer and ask questions similar to what they would ask.  If it seems too easy to the seller they will be skeptical.  You need to put them in the frame of mind that they need you and not the other way around.

And important not sure what you write in your contracts for   assignability but down here its one box checked on the contract so it doesent stand out too much.

Ben Wilson · Answer

Aaron,

Good advice, as usual, from Will.

In addition, I would ask how many sellers have you talked to?  Many beginning wholesalers I speak with try to make deals out of non-deals and end up frustrated.  By cranking up your marketing and talking to more sellers, you will find sellers that are truly motivated.  And by motivated, I mean not only will they sell at my price, but they won't ask me why I have to bring other people through or ask about my paperwork.  All they care about is that I am solving their problem.

good luck

Jimmy C. · Answer

The state approved contract is what we use. Like i said before it makes assignability easy.

You can get absentee owner leads free on your county property appraiser or tax collector website. Just look for properties that have a different mailing address than the property.

Or you can ask a title company if they could help.

Aaron Cheatham · Answer

OK. So the best way to do this is get my signs up and drive looking for.vacant homes, research the absentee owner address and contact them. What is the best way to get absentee owner information. I was using realquest but it got to pricey.

The only people I contacted where for sale.by owner signs. Which were about 5 owners.

thanks for your words.
Aaron

Aaron Cheatham · Answer

OK.EVERYONE THANKS FOR ADVICE.

I HAVE NO BANDIT SIGNS UP YET, I JUST ORDERED THEM. THE LEADS I'VE BEEN GETTING ARE FROM FOR SALE BY OWNER SIGNS THAT I See.( sorry about the caps )

here's another questions. A few times the seller asked me why don't I get a inspection before I put the property under contrac? What is a good counter for this ?

Do you all use your state realtor contract or do you use a one page?

thanks for your words.
Aaron

Bill Gulley · Answer

I just did an option to wholesale a property. I did have a very motivated seller who wanted to basically walk away and who had equity but his life was in a spiral.

Initially, I told him exactly what I would do! I asked for his best price and made my decission in minutes after meeting him. I told him that the key to selling to some investors was being able to access the amount necessary to make repairs and make improvements and to identify the types of improvements needed for a particular property!

My seller can't do that. I can and for me to do that I can take an option to buy at his price and work the difference into a transaction with my buyer. The investors will need to see the property as well, we will need to inspect the property to see what it needs and a home inspector as well as an appraiser may need to get into the property. Whats the best time to do these inspections, mornings or afternoon? What about this Saturday about noon?

I had also explained that I would be making a some money on it as a fee, but that's the buisiness and my fee could be less than a Realtor fee depending on what I work up and who the end buyer will be. A motivated seller does not care!

The thing about disclosing what's going on instead of sneaking around is that you'll never get caught in a lie or in a surprise where the seller begins to think he's getting the shaft!

You have skills that perhaps many Realtors do not, it's not really a Realtor's job to fix things, get job cost estimates, line up contractors and make improvements to a property and either you or those you work with do!  Your skills and expertise are worth something and instead of charging the seller a fee for himto pay in cash, you'll  take the risk of earning your profit with an option.

Simple! Good luck

what am i doing wrong ?

Most Popular Reply