A long while back I spotted a vacant run down house in my area and sent a letter to the owner asking if they wanted to sell it fast cash. They just called me from that letter a little while ago and left a message with their email. I sent them an email inquiring about the property to see if they were interested in selling it. They responded back that they were interested in selling as-is and to make them an offer.
I hate making first offers. I mean they never work out…I usually offer 60 cents on the dollar minus repairs minus my profit. The owners always seem to be shocked at the low price. For some reason they think that their property is good enough to pay full price for. I live in South Florida which is one of the most depressed markets right now.
Any advice on how to approach this? I would like to respond to this email by tomorrow.
Ask them what is the lowest amount for cash with a quick closing they will accept. Then you can accept their number or tell them that you were thinking of a lower number and state the amount.
If you are not embarrassed about your offer, it’s not low enough. You can only offer higher, you can’t take back a number and go lower.
Get a good book on negotiating. I see so many want to be investors who think that they can just read a course on investing and they are all set to go. You also need a really good education that is equally intense on negotiating. Anyway, that said my number one rule when dealing with sellers is to never be the one to name the number first. Never. From a negotiation standpoint if you spit out a number first, you as the investor are the one at the disadvantage. For your calls, I’d advise working with a very detailed call processing proceedure where you capture the caller’s information. Towards the end of the questioning I’d ask ‘do you have to have all cash, or would you be open to taking payments?’. They will come back with a number of responses. No matter what they come back with, your reply could be ‘ok, we just ask that question because if you are able to take payments over time, I’m would be able to give you a much better price. If we have to come up with all cash, it does have to be a very steep discount from the appraised value. But if you’re willing to take payments, I can give you a price that’s much closer to the appraised value. That’s why we ask that question’. By wording the questioning this way, the seller picks their poision so to speak, and you aren’t simply blirting out an offer that they reject. You also accomplish something else. I read a book on negotiating where they talked about the concept of getting the other side to commit time to you in some way. The idea being people generally hate the idea of wasting time. If you get the seller in this case to commit their time, they will want to see some sort of thing become of it. This means it is more likely they will want some kind of result of their time in which they’ve invested. Anway, hopefully this gives you some ideas.