One of the biggest reasons for failing to put a contract together with motivated sellers is that they’re not realistic on price. For one reason or another, they feel that their house is worth much more than it is.
At the end of the day, you really can’t blame them. They are most likely uninformed and looking out for their own best interest–to get the most money possible.
Maybe the city’s assessed value of the property is higher than what it’s actually worth, and they’re basing their price on that. Or maybe “the guy up the street” is asking $xxx,xxx, so they think they can get that, too.
Maybe there’s a family member in their ear telling them what he thinks it’s worth–even though they’re totally unfamiliar with the market. (You know how family members can be complete know-it-alls.)
You need to combat this in a tactful way that doesn’t involve a big debate with the sellers.
Okay, What’s the Secret?
Remember, making a good deal with the sellers has a LOT to do with creating a good rapport. If you’re engaging in “debate-like” behavior, it’s impossible to get that rapport and will cause them to put up a defensive guard as they deal with you. NOT GOOD!
Over the years, I’ve fine tuned a few strategies to get them to a realistic price range, but for now I want to give you one simple and effective strategy that brings most sellers to reality really quickly and has allowed me to put together deals that many other people couldn’t: You bring over printed comparable sales!
Sounds Simple, but It Works – Here’s Why…
Let me explain the exact process for how I go about this. There’s a sequence I use that makes a lot of sense. Again, I’ve finely tuned this over the years, and it works really well.
It starts on the phone when I set up an appointment to look at the house. I ask them for a rough idea of what they have in mind for price.
I don’t care too much how high it is knowing it may come way down when I use different strategies. I simply want to gauge where they’re at. Based on our conversation, I’ve already concluded that they’re motivated to sell. Once I know they are motivated, I know I have a chance of bringing their price way down.
When they tell me the price range they want, I ask them if they’d be flexible on the price, considering that houses around them have sold for less. Usually they say they can be “a little” flexible.
So, I tell them that I’ll do some research, print off some of the sales around them, and I can show them the actual sales when I look at the house.
Time to “Get Real”
I go to the appointment and look at their house. Once we’re done with that, I’ll sit down with the sellers and go over the comparable sales. I’ll show them that the surrounding homes are selling for less (sometimes much less) than the price they’re looking for.
I show them the sale price and the dates they sold. I also highlight how much people were asking versus how much they actually sold for. I show them how many days the house had to sit on the market.
It makes your case for paying cash and closing quickly without a commission look much more appealing and highlights the help you can give them.
(I also go into the rehab costs with them and do some math, but I’ll go in depth about that in another article.)
The bottom line is that I get them to see: 1. What realistic prices are and 2. The estimated costs of the construction. It works because you’re letting the data do the talking and negotiate for you instead of the sellers negotiating against you, which leads to defensive language and behavior.
In fact, this whole business revolves around human nature and psychology, and when you start to crack that code, I promise you, you will close many more deals.
Once you’re done showing them where things stand and that your actual opinion of price is removed from the equation, they become much more receptive to a realistic price. Their defenses are down, and a fair deal is much more likely to be on the horizon.
Try this out on your next few deals, and you’ll see some awesome results. Leave your comments here…
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