Have you ever gotten a deal you didn't have to work to find? Maybe an agent brought it to you or a wholesaler called you up out of the blue. Read next month's post to hear about another great deal that fell into my lap.
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A lead I wasn't sure would close turns into a nice check.
In early October I received an email from a person about a house in Adelanto, CA. This is strange for many reasons; I don't market to Adelanto and never have, the seller wasn't on my list, nor was he on title to the property. I wasn't really sure what to make of it. Follow the email exchange and see how a little salesmanship closed the deal. My emails to the seller are in green and his emails are in blue.
Thank you for submitting your property for a cash offer. I saw some pictures of your property from when it was listed back in 2009. It looks like a great house and you got a really great deal on it. Can you tell me what is going on with the property that you are interested in selling it to an investor? Is it rented? What kind of condition is it in?
It's vacant now.
Too far from where I live and we are tired to go that far.
We can sell anytime.
What's your bottom number? I just sold a rehab/flip house so I have cash on hand. I'm looking for some new rentals and this looks like a good one.
Give me your number.
At this point, some investors wouldn't know how to proceed. At least the "He who says a number first loses" investors wouldn't. I have no problem throwing out a number first. And why shouldn't I? I'm the one that wants to buy the property. I must have some idea what I'm willing to pay. So I emailed the seller back with a written offer. Then I got the dreaded "I spoke to an agent" email. Nothing will ruin a good real estate deal like an agent getting involved. However, I have some tricks up my sleeve to deal with that objection. Here is the email I received from the seller;
I have another real estate company gave me comps, the house can be sold for $120K (see attached). Why there is so much difference between your offer and their estimate?
He even sent the email with the subject line: $ 75K vs $ 120K. Well, I agree that $120K is better than $75K, but $120K wish is nothing like $75K today. It's like the 80s movie The Sure Thing. A young John Cusack is playing the part of a college student who decides to travel across country to California to meet up with his buddy and a bikini clad babe just waiting for him. It's a "sure thing" his buddy tells him. He drives across country with a fellow (and average looking) female student, the "real thing." The premise of the story is that a sure thing comes once in a lifetime... but the real thing lasts forever. That $120K is this seller's Sure Thing. It might happen, but not today. Meanwhile, my offer, or the seller's Real Thing is in writing and ready to close in 2 weeks. I typed up an email, waited a day, reread it, waited another day, then did my final revisions and here is how I went about closing him;
Real estate agents have no money and are trying to lure you into a 6 month contract. I have money and am going to close in 14 days. The big difference is in not what the value is or isn't, it is in what we are offering:
They promise to put a sign on the front lawn (which tells all the local vandals and transients the house is probably vacant and ripe for stealing copper, the condenser, the water heater, and whatever else can be salvaged for scrap metal), they'll put the listing into the MLS, and then they'll pray a buyer comes along to make an offer. We call that the "Put, Put, Pray" method. If it doesn't sell, they have other listings. You take all the risk.
I am offering to close escrow in 2 weeks, buy it as-is with no contingencies and I'll pay all the closings costs (escrow/title/transfer fees/home warranty/termite/home inspection repairs, etc.) you would be paying (plus commissions!) out of whatever sales price the agent eventually gets you... if he even sells it.
Essentially, you are taking a gamble on the market. Do you think the agent can sell it before the vandals attack it and make more money going that route? Or, would you be happy with what you have made on it and be done with it having zero risk?
Two days later I received this reply;
To be able to have a quick sale, owner will consider your cash offer with "SOLD AS IS without any repairs" for such a low price, but why you still have Contingent upon interior inspection?
Objection #2. Back to the think tank and time to come up with some more objection handlers in order to get this deal in escrow. I wrote up my best sales copy, waited 24 hours before previewing to be sure I was happy with the flow, then fired it off. Here is the final draft;
As for inspecting the inside, I just like to make sure the place isn't a complete wreck. If I'm writing a check that big, I like to know what I'm getting. I've had people try to sell me a house with fire/water damage, rat and cockroach infestations, completely vandalized with all copper plumbing and wiring missing, serious mold problems, etc.
Just to be clear, I have no problem with any of those issues. I've purchased some houses that probably should have been torn down. I just would like to know about any problems before I write a big check because once I deposit my money in escrow, there is no going back. Surprises come with the business, but I don't like nightmares unless they are disclosed beforehand.
Is there anyone nearby who has a key? If there is no way to get in, but it is vacant, I'll just peak inside through the windows. That will give me all the information I need. I saw pictures online and as long as it looks even remotely close to that condition, I will close and you'll never hear a complaint out of me.
If the seller can sign the offer and fax it back to me or scan and email it, I will open escrow as soon as I receive it.
The next day, I received this email from the seller;
OK, pls see attached offer signed by the seller. Let me know if you have any question.
Best, Michael (Joanne is my wife, her name is on the title)
I never did go up to Adelanto. I actually wasn't even sure who I was going to sell this house to because I don't know any buyers in Adelanto. It's too far for me and it certainly wasn't going to be me closing this escrow. I emailed my network and got one response. He had a few questions and then communication stopped. I thought about it and remembered an investor who said she was looking to pick up a rental property. I texted her the address, and she drove up to see the house. As it turned out, she had relatives in the area and was super excited to add this to her portfolio, so I wholesaled it to her for $85K. That was a total of 5 emails I sent and a payout of $10,000 on a lead I didn't have to pay to attract. Here is the Thank You card my buyer sent after we closed, which I thought was very nice of her.