Negotiating With A Motivated Seller

[Account Closed]

I received a call from an absentee owner. He owns a property in a working class neighborhood that I've been marketing to. The property is a 2br/1.5ba & is currently rented. It's worth around 100k. Owner is asking 90k & said he'd take 80k cash. My maximum allowable offer is 46k (including my assignment fee & all other costs) The last thing I want to do is scare the seller away with a low balling number & lose my first potential deal. I know if the numbers don't work I need to walk away but is there any hope here? Any negotiating tips would be appreciated. Thank you.

[Aaron Mazzrillo]

Nothing irritates me more than when people throw out all the reasons why THEY would never sell a property for 50% of ARV or less. Brittany Irene, you won't know what the seller will take until you make an offer. Don't negotiate against yourself. I've purchased 4 houses in the last two weeks for less than 50% of ARV each. I am not talking about major fixer uppers or problem properties either. One of them I am keeping as a rental and it comes with tenants.

I've purchased over 100 houses from private sellers and no two deals were exactly the same. People sell for all kinds of reasons. I gave up trying to figure out the why. You can never know. Just make your offer and tell the seller that is the best cash offer you are willing to make. Also, get the biggest wholesale fee you can. Who cares what other wholesalers get! When I was speaking at the BP Summit, an audience member asked my co-speaker what does he try to get as a wholesale fee. I interrupted and said the right answer is the highest amount possible. If you can get $10K on a $100K house, get $10K. I try to get $15-$20K minimum on every deal regardless of the house value. I don't always get it, but I have gotten up to $45k before. You won't know until you make an offer.

Lastly, never think of your offer as a low ball offer. That is like calling yourself cheap. Do you do that? My offer is a fair offer. If the seller wants cash today, a problem free escrow, to be able to sell a property without even leaving their house or putting pants on (of course they will need to find a mobile notary willing to come to their house), there is no easier way to sell than to me and my services are not cheap.

Why do people pay $10K for a Rolex when they can get a Timex for $5? Is it because they are stupid? Does having a Rolex ensure you'll never be late for an appointment again? Rolex buyers are purchasing a service. They want the perceived prestige that comes with owning a high end watch. You should think the same way about your offers. We (wholesalers) provide a hassle free way of dealing with a typically long, drawn-out process that involves an overwhelming amount of paperwork, disclosures, inspections, and approvals. We stream line it and make it so simple for someone to sell and avoid all that nonsense. The fee for our service is trading more equity than what an agent takes in commission, but to many, many sellers, the fee is absolutely worth it and I have a pile of testimonials, repeat sellers, and referrals to prove it.

Make the offer!