Okay, so I made my first step in talking with a FSBO. We are going to meet tomorrow to look over the property and I already know that he is asking too much for it. How do I go about this conversation without insulting him (this is an estate sale)?
Any suggestions would be greatly appreciated since I have no clue how to handle FSBOs. I’ve done several deals on the mls with an agent, but none solo. Thanks again!
If you like I can send a script…
Michael ~ I would accept anything that would helpful. I appreciate your knowledge!!!
No Problem… I just cut and paste answers from Rob in Atlanta’s posts… lol j/k
Can you read a powerpoint?
Yeah, I have Powerpoint. But if you would like I can just search Rob’s past blogs. I don’t think he would mind…
If you already know he’s asking to much why bother eccept for the experience. Only DOM will change his mind or job loss, something of that nature. Herbster
Well, that was a fun experience! I don’t think I’ll purchase the house, but learned a lot from it. Especially what and what not to say.
Do you guys tell people from the start that you’re an investor? And later in the conversation that you know the market fairly well and their price is high? I didn’t come out and tell him that, but did mention the house a block away was sold for the same price he is asking a month ago. However, the sold house, had two times the square footage, new furnace, another bedroom, a second bathroom, newer siding, etc. Basically, he needs to drop his price in half, and then he would be competitive. He is not extremely motivated, but i could tell he is getting ready to sell this thing.
Also, how should I leave the conversation? “Hey, I’ll give you $20k to close on this tomorrow” or “Call me when you get serious.” I’m somewhat joking about these comments, but I really had no idea what to say when leaving.
I think it is counter production to find fault with the house. The seller gets insulted and that makes him resistant.
So I simply say I like the house, would like to buy it, but that all I can give for it is $xxx.
You can’t talk someone into selling for less than their low price, and you can’t hold a gun to their head to make them sign. Give them the price and they will accept it or not.
If you have good comps that support your price, take a copy and leave them with the seller, with your contact information and the price you will pay. But if you do that, make sure the comps are comparable.
I once had someone try that with me, and I drove around and looked at his “comps” and they were 40 year old mobile homes on unimproved lots covered in trash. Not exactly comparable to a nearly new custom built frame house with mountain views, an RV barn, and professional landscaping.
By the way, I find that the majority of FSBO houses are both overpriced and noticably run down.
You can occassionally purchase a FSBO, but you will have to look at a lot of them before you find one that is reasonable.
OK…you guys are too funny at times!! You can go back to many of my postings but I will give you a few ideas right here…insulting a seller is not the way to go. You need to do a bit of research around the neighborhood and find the problems that prevent a quick sale. Then list all of those problems very, very slowly to the seller. He already knows this ‘stuff’ but he needs to know that YOU know the problems. Just be empathetic and slowly list everything that will delay and prevent the sale.
It is also best, in my (not so) humble opinion to find empty houses so that you can add to the list of problems that he is paying an extra house payment on an empty house, not to mention insurance problems that will arise…like cancellation!
Anyway, I typically get the seller most uncomfortable with keeping the problems at the top of the conversation. Then, I tell him if he wants me to assume his position (filled with problems), then he will need to write me a check! Boy, that really backs sellers down!!!
After that, we usually can eliminate any thoughts of him getting a down payment and I continue to request a check for taking over his position. The end results will be a great price, no money down, and many times, I get a check from the seller too!!
Hope that helps.
Rob
A lot of owners trying to sell FSBO think they can get more than what it’s worth. The last time I talked to a FSBO seller, I took copies of properties we recently bought that were comparable to this house. I showed them the specs and purchase price to put things into context. That justified my offer price. I didn’t end up buying that house, but I can buy straight off the MLS and get good deals. If they don’t want to sell for my price, there are tons of other houses for sale here. Just move on. Leave contact information. You never know when you’ll get a call a few months down the road.
As mentioned FSBOers are selling to either save the money or that they do not value the services of a real estate agent… As for price and if you should go out to make a presentation… As long as they are in reality land or better then go see them…
Remember a lot of sellers are afraid that they are selling too cheap because of a lack of experience… Because of that they price their property too high and almost always are willing to reduce if you ask the right questions…
Here are both my Cold Call script for FSBOers and my Long seller questionnaire…
They should give you a good idea for what to ask.
BTW when determining value youll need to do a Six-Pac and chat with 3 solds and 3 listed home owners… That info will serve well with the seller…
Seller Questions
FSBO Script
Hi, I’m calling about the house for sale… My name is __________with I Buy Houses.
I bet you are bombarded with real estate agents calling you and trying to list your home for sale… And
I’m sure you’ve selling your houses yourself to save as much money on real estate commission as possible…Is that right. (It is) Terrific! / Really!
When would you like this house Sold? (Now)That’s exciting!
Do you have your next home picked out already? (You do) Ouch!
What do you think it will take to get the houses sold? (The right offer) Really!
Now you had it offered at _________ and it didn’t sell, right? (No) Really!
And your planning on lowering the price this time to get the house sold, aren’t you? (You are) terrific!
I buy houses… just like yours… all of the time, and I have found that if the seller is willing… we can come up with a solution that works best for both of us, is that okay with you? (Yes) outstanding
Sometimes the only way we can buy the houses we look at is to take over the debt and pay you your equity, That means the loan will stay in your name until its sold, assumed or paid off.
Sometimes even buy the house under a lease option… Is that a problem? Yes No
So if we can pay you your equity, guarantee and make your payments and be responsible for all repairs you will sell the home to us, right? Yes No
What time today would be better for me to come out and buy your house ___________ or ___________? () Terrific
Before I come out… there are just a few more questions… I need to ask about your house, is that okay? (It is) outstanding
Is the home Vacant or Occupied? Occupant Name?
_____ Bedrooms ______ Baths
How many Square Feet? ________________
Size of the Garage? ____________________
How did you happen to own the home?
What Kind of repairs does it need?
Carpet Paint Roof Cabinets Electrical Plumbing Plaster Sheet Rock
Cooler Heater Air Conditioner Window Landscaping Clean-up ______
What do you think the repair cost will be?____________
What are you asking for the house? __________________
Is that Fixed–Up or ‘As Is’
How did you come up with that Price?
How soon would you like to be sold? ____Days _________Date
Is there a Mortgage on the house? Yes No
What is/are the balance? 1st ________ 2nd 3rd
Are you in Foreclosure? Yes No Notice of Default or Trustee Sale…Sale Date _______ Arrearage Amount __________
One last thing…. When I come out… it is important…that all of the decision makers be there…. so I can come to an agreement to buy your house… Will all of the decision makers be there for the appointment? (If all of them are not there don’t go)
Well, ____________ I look forward in meeting you at __________…
I truly like dealing with homeowners the best!
IN this arena, you’re maybe one of a handful of prospective buyers instead of with the MLS where you are one of many.
I like to ask open ended questions such as :
what can you tell me about the property>?
What are you looking to get out of the property?
Find out what their needs are and seek to match your offer with their needs.
This creates a win win and you may get the price and terms you’re looking for.
Dennis
Make sure that you also ask them why they are selling the property.
Chris
That’s question number 13
lol
Michael
Definitely use these great questions provided by your peers here, especially that awesome list by Michael!
Here’s the key- get started!
None of these questions does a bit of good without implementing them.
There are no magic bullets here, just persistence and application.
YOu have to pay the piper, bite the bullet and actually start talking to the sellers.
ONce you do this, you’ll be able to develop a natural style for yourself and these questions will come naturally.
Dennis
I’m getting out there now. I’ve made four phone calls this week, had two conversations, and need to call back another one. It seems, with my little experience, some of these fsbo are wanting extremly high prices. But it sounds like this is a numbers game and I have time!
Thanks for all of your help!
I agree with Recoachdennis (once again, lol). I also like FSBOs better than MLS listings because I can deal directly with the owner.
I’ve found many times that when a realtor is involved, some of them like to make the decision for the seller they are representing. They don’t even give the offer to the seller as if the house is owned by them.
Don’t get me wrong, I do deals with realtors, but they have to be “on board” with the real estate creativity “game”.
Many are still stuck with the “old” days.
Anyway if you are talking with the owner, then you can offer what you feel as long as it is fair.
No offer is a “dumb” offer but as Rob says do not insult the owner.
Good stuff! Do you guys think is always best to accounce yourself as an investor in the beginning or at the end? What do you say when they start complaining about your long list of questions?