Here is “weird” (as she says) question from one of my new aggressively motivated, letter sending, phone calling, door knocking, grab the seller by the ear, persistent student I’d like to share with you.

Questions: Glen, This may seem like weird question, but I need to ask. I was reading a book last night and it says the following sentence that bothers me: “Conversely a low ball offer may not be taken seriously by the seller. Unless he is highly motivated to sell, He will probably be insulted by an obvious attempt to steal his property.”

Hmmm. Let’s see here. I was going to call you but let me try to answer this now. It’s a little long. The answer basically lies right in your statement. “Unless he is highly motivated to sell.”

First of all, we don’t just go out and make “low ball” or LB offers. Our offers are what they are for a reason. A calculated formula for entitled profit for investing our money.

I explain many times to homeowners why my offer is what it is. I buy it, fix it up and resell for profit. It offers two solutions. Getting the seller the cash they need quickly without any fix ups or paperwork hassle, and me making a profit for my efforts of buying, fixing and selling. If both solutions don’t work, or one side is not happy, there is simply no deal and we both move on.

Remember, if a seller is not motivated, any offer will seem like a LB offer to them. These are not our potential profitable deals nor the type sellers we seek. Otherwise you can go through the real estate section of the paper and offer every FSBO an offer of 50-60% of their asking price. Now that can be construed as LB offers just to see if anyone bites on it. Not a good way to try to buy houses.

Back to your question. As an example, I guess you can consider an offer being a LB offer when your house is worth 300K, nothing wrong with it, nice neighborhood, not behind on payments, and it’s just a “peach of a house” and someone comes along and offers you 190K just because they want to own that 300K house for 190K.

But, if the house needs work, or the owners are facing foreclosure, or they inherited the house and it’s become a burden, or are going through divorce, and any other reason they need to sell quickly, they become our motivated sellers. And usually, only real estate investors can buy quickly and take on a house that doesn’t look so great and needs attention. Investors buy and fix and sell.

That’s why we offer what we offer. Retail buyers usually don’t want to do fix ups and would rather look else where and that leaves very little buyers for the house at retail value. But homeowners rarely see this point and continue to “hope” for a buyer. But an offer is an offer and if you don’t like the offer of 190K, you don’t take it. Here again, there is nothing wrong with offering a person a price you are willing to pay. They may not like it, but there is nothing wrong with it.

A house, or anything for that matter is only worth what someone is willing to pay for it. And that price depends on the condition and location of the house. You are an investor, or wholesaler of houses. An example is like when you trade in your car. Ouch!

The dealer or wholesaler, only wants to give you 8K when you think its worth 12K. They need to clean it, fix it up, pay for their costs and resell it for a profit…what’s the word?…Profit! That’s why they are in business. And even if it’s a creampuff, they are still going to offer you less so there is room for…..yep, their profit! So you can do what homeowners or FSBOs do. Try to sell the car directly to the retail buyer to get the highest offer. If you have time and your not motivated to sell and your car really is a creampuff, you’ll probably sell it close to your price. If not, back to the wholesaler for a quick sale to solve your situation of needing cash without spending any money on fixing your car to get top dollar.

Questions: Is this why my out of state offers don’t get a counter offer? Do they think I’m trying to “steal” their house?

Some times out of state owners just like instate owners are simply not motivated (although it’s a great market usually with motivated sellers because they can’t keep an eye on their property and do fix ups, etc.). Here again, motivation is the key. But in time, when they don’t get their price, they can become motivated. This is why a good follow up system can get some good deals.

And yes, as you said, marketing to people in these overvalued communities is a tougher market. Usually they are people who can support their out of state house and are not in a distressed situation and just “eat” the losses each month until the house sells. There is nothing you can do about people in that situation until they just get fed up and sell at a discount to just get rid of the property after it being nothing more than a nuisance to them. But marketing to out of state owners with houses in a less expensive community is still a great marketing tool. There are a couple of guys in our association who do this and do quite well.

What does it mean to “steal” their house?
Offering a lesser amount and it being accepted by its owner is not considered stealing a house, a car or anything. People use that term in lieu of saying, they want it or got it at a discounted price. If it’s an open offer, through a contract, that one is willing to pay, it’s not stealing. Stealing is stealing. Stealing is when you offer a price, the owners say no, and you get the house anyway by using unscrupulous tactics, fraudulent documents, signatures, etc.

Questions: Also, I received another lead today, I guess its going to be the same old story “I do this for a profit yada yada yada”. LOL Not looking forward to speaking with them because the offer won’t be close to what they want.

Here again, if they are not motivated, your right…yada yada yada! Same ole, same ole. But don’t get discouraged, as it happens to all of us. I could fill up a garbage can of some of the requests I get from people who want to sell me their houses, from all over the country! Yep, Texas, California (talk about a tough expensive market) Maryland, Mass, CT, NV, NC, SC, etc.

I basically tell them I am an investor. I buy and sell houses to make a profit. If they need all that money they are asking, they should continue to try to sell it themselves. But think about this, why are they contacting me? They see my website, know what it’s about. But they are having trouble selling at their price and start to search the internet in hopes of finding someone who will “overpay” (of course not in their eyes) for their unwanted house at that price.

But once in a while, one comes in that almost makes sense, I make an offer and Bam! Both seller and I are satisfied, hence, a good deal for both of us.

Hope this helps, keep hanging in there. It is a little tough times right now for everyone. But through your efforts, I’m sure a good deal will come along.

This is just a sample of the questions and other real deal situations that I cover in my monthly newsletter.