It doesn’t sound like there’s anything to talk about on this deal. It needs the most expensive rooms in the house updated (kitchen and bath) and you can probably add in other outdated items like windows, heating system, refinishing wood floors, interior paint, appliances, ect. And he’s only willing to negotiate “SLIGHTLY?”
Here’s what you do…
Get all the family members at the house TOGETHER so nothing is lost in translation and PREPARE for that presentation.
The first thing I do is look at ANYTHING that could prevent that home from qualifying for FHA funding…BAD ROOF, CHIPPING PAINT, SEPTIC SYSTEM PROBLEMS, anything.
THEN…I would have the PICTURES of those comps they’re using. BUT make sure you have the INTERIOR PICTURES, so you can show them these homes are NOT the same.
SHOW THEM how much NICER those homes were than this one…And then explain to them that, with a house in THIS CONDITION their competition is actually FORECLOSED HOMES that need repair…NOT TURN KEY beautiful, well kept properties. HAVE PICTURES WITH YOU of recently SOLD foreclosed homes that get you to your $150,000 number.
My final push to these sellers would be this.
YOUR MONEY…IS SITTING IN MY BANK ACCOUNT RIGHT NOW!!! If you take my offer, you can leave all the junk you don’t want in the house, have a closing in 10 days, and not have another worry about VANDALISM, PIPES BURSTING, FURNACES BACK FIRING or ANYTHING ELSE…Remember…Unless your insurance company KNOWS this house is UNOCCUPIED…IT IS CURRENTLY UN-INSURED… Don’t take my word for this…ANONYMOUSLY call your insurance company and ASK what would happen if a pipe bust with no one living in the home??? ASK what the difference in COST is for an UN OCCUPIED HOME vs an OCCUPIED HOME.
Most sellers have NO IDEA that insurance companies check WATER USEAGE and UTILITIES before they pay a large settlement on a property if they suspect it is unoccupied. They WILL investigate before writing a big check. That includes interviewing neighbors who will willingly tell them that “Oh, Mr. Jones died last year, nobodies been in that house since.” Most sellers have NO IDEA these properties are virtually UN-INSURED once their loved one passes. They mistakenly believe because they send the payment, they’re covered…THEY ARE NOT!
You need to walk a FINE LINE here…You want to instill a certain level of worry, without going over the top. I usually tell them that I’ve SEEN this happen to families first hand.
Properties I’ve made very fair offers on and had the owners reject it…Only to get a call a month later telling me a pipe burst in the home, the insurance company refused to pay because they weren’t notified the house was vacant and now the owner MUST SELL. Unfortunately, my original offer is GONE…Make sure you tell them that NOBODY wins in these cases. A home that weeks earlier would have taken me a 6 months to rehab is now WORTHLESS!
The information you are giving these people is 100% accurate…The GOAL is…They CALL their insurance company, find out everything you told them is TRUE…THEN they start thinking that the other info you gave them on PRICE was probably accurate too!!! AT THAT POINT THE GEARS START TURNING!!!
be sure to LEAVE a sales agreement with YOUR offer with the family. Tell them all they have to do is sign it, you will pick it up and drop it off at your attorneys office with the deposit and your lawyer will contact them the THAT DAY to schedule a closing.
This is how I do it…I’m buying with CASH so SPEED is very important to my sellers and I can close deals in 5 days if I need to. If you can’t do that…Make sure you’re financiing is lined up and ready to go BEFORE you need it.
PLANT the seed, let them WORRY a little and most IMPORTANT…EDUCATE THEM!! These people need to understand they are competing with every bust out foreclosure in that area. BUYERS do not care if it’s an estate sale or a foreclosure…REHABBING a KITCHEN and a BATHROOM costs the same in both houses!!!
REMEMBER…BE NICE!!! Watch AMERICAN PICKERS TV SHOW…Pay attention to how those guys APPROACH people…They are VERY LAID back…You want to leave this family having given them INFORMATION, in a very nice way. They need to understand the current market we are in…If they THANK YOU and REALLY MEAN it when you finish??? You know you hit the long ball and will probably hear from them!
GOOD LUCK and keep us informed.