Three Questions You Should Always Be Ready to Answer in Real Estate Investing?
Real estate investors face many problems in finding deals where they can make money.
When they get a prospective seller to give them an interview, the investor faces his next challenge - getting the seller to say "Yes" to his lowball offer.
If the investor doesn't make low offers he will not be in business very long.
Even rehabbers who create equity in a property by rehabbing it, need to get a low price to make their magic happen.
As the investor sits in front of his prospect, he should be making a presentation about why his offering price is justified.
This presentation can include repair estimates, neighborhood issues, market conditions and a myriad of other problems that make his offering price so low.
However, in the final analysis, the seller has three burning questions in his mind that are more important to him than the investor's justification for his offer:
The more questions you ask the more truthful and comfortable the seller will become.
Ask and you shall receive is not only a proverb, it is a truism.
This will usually be enough but sometimes it is necessary to talk about other properties in the immediate area that you are deciding on which ones to buy.
Secondly, the contracting can be signed now so the seller has a peace of mind until he has to leave - this can be critical.
In some cases I have allowed the seller to stay for months just to get the property under contract and make the transition as easy as possible for the seller.
Having the property under contract allows the investor to play the real estate market if it is rising, with only a modest deposit with the seller.
If the market in your area is flat or declining, a new price can be negotiated when the seller is ready to move and just before the closing.
When they get a prospective seller to give them an interview, the investor faces his next challenge - getting the seller to say "Yes" to his lowball offer.
If the investor doesn't make low offers he will not be in business very long.
Even rehabbers who create equity in a property by rehabbing it, need to get a low price to make their magic happen.
As the investor sits in front of his prospect, he should be making a presentation about why his offering price is justified.
This presentation can include repair estimates, neighborhood issues, market conditions and a myriad of other problems that make his offering price so low.
However, in the final analysis, the seller has three burning questions in his mind that are more important to him than the investor's justification for his offer:
- The seller will be thinking about why he should deal with you as soon as you arrive.
This is a trust issue and it has to be overcome from the very start.
If you are pushy or sarcastic, the seller may not say anything and just not give you an answer or simply say he will think about it.
Even if the seller doesn't say yes, you still have better than a 50/50 chance to get the deal if you follow-up until someone else gets it or the seller relinquishes it to you.
The more questions you ask the more truthful and comfortable the seller will become.
Ask and you shall receive is not only a proverb, it is a truism.
- The seller will also be thinking about why he should deal with your company.
This can be overcome by talking about the history of the company and your achievements in helping solve housing problems.
This is the time to talk about how quickly you can close because you are a cash buyer.
- Finally, possibly the most important question is "Why now?" If the seller is motivated, this question is not as important as it is to a semi-motivated seller.
This more properly defined objection can be confronted in a couple of different ways.
This will usually be enough but sometimes it is necessary to talk about other properties in the immediate area that you are deciding on which ones to buy.
Secondly, the contracting can be signed now so the seller has a peace of mind until he has to leave - this can be critical.
In some cases I have allowed the seller to stay for months just to get the property under contract and make the transition as easy as possible for the seller.
Having the property under contract allows the investor to play the real estate market if it is rising, with only a modest deposit with the seller.
If the market in your area is flat or declining, a new price can be negotiated when the seller is ready to move and just before the closing.
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