What Is The Best Way To Discuss Options With Sellers?
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What is the Best Way to Discuss Options With Sellers
Joe: This next question is about talking to sellers. “What do I say to a seller who has any objection?” And then this is a pretty good rule of thumb. Any objection that somebody makes it always goes back to what are options? What are your options? Because what they want to do and what they’re able to do are usually two very different things. You know, it’s like if you go to the doctor and the doctor says, “Well, you’ve got cancer. I’m really sorry to give you that news.” And you can say to the doctor, “No, I don’t want cancer.” But the doctor is going to say, “Well, you’ve got cancer so you’ve got to deal with it in a way that can, a solution that will actually work. You’ve got three options. You’ve got chemo, you’ve got surgery, we’ve got radiation. You know, which one makes the most sense to you? Here are the good and bad parts of each one of those things.”
Joe: And then you have to choose one of those bad options in order to survive. And you have to pay the doctor a fortune in order to survive and you’re going to thank that doctor when it’s all said and done if you survive, and say, “I really appreciate your doing this for me. You saved my life. Even though it cost me a fortune, I lost my house, and I lost my,” whatever piece of your body got cut off. So, these things, they don’t always want to do what we are suggesting. But what we’re suggesting is usually their best option and if you can figure out what their options are, that’s going to make your life easier.
Joe: Now the way to figure out what their options are is to understand what the zero down hierarchy is. The structures, and what’s possible there. But it’s also, if you go into the Automarketer there’s a button on the lead sheet that says Seller Options. And if you click it it’ll show up all the options. You know, list it with a realtor. Here are the pros here are the cons, here’s how long it typically takes. Here’s how much it costs to do that. Or, you can sell it on a short sale. Here’s what happens in a short sale. Here’s what happens to your credit, here’s what happens with the bank. Here’s when you can get your next property. Here are the pros here are the cons. You know, you can get rid of the property, you can stay there for a while, maybe, without paying anything. What if you sold it at a, dramatically below market value? Here are the pros for that, here’s the cons for that. You know, which, you know, and what if you sold it subject to? What if you sold it multi mortgage? What if you sold it on a land contract or contract for deed? What if you sold it for cash you know? What if you sold it on a lease option? You know, you have all these different options and you can tell them the options that you’re personally willing to do plus the other options they have that you can’t do.
Joe: Because when you do that, it builds your credibility. So, you know, you could list this with a realtor. You know, does it makes sense? You’ve got equity here. It could make sense for you to list it with a realtor. A realtor’s going to cost you, you know, 6%, 7%, for their realtor fee. It’s going to cost you another 2% for closing costs. It’s going to cost you maybe 3% for negotiation cost. It’s going to cost you another 2% for you know, repairs on the property. So you’re looking you know, somewhere between 7% and 15% in costs to sell your property. Also, in addition to that, it’s going to take you on average in this market 75 days to get the property sold if you list it right at the beginning. But one-third of all properties that go on the market you know, don’t sell. They become expired listings so you’d have to leave it on longer or lower your price, so you’re making even less because you have to lower your price if you didn’t price it right the first time.
Joe: And that’s all going to be determined not by your or your realtor but by the buyer because the buyer determines the price and then of course it’s got to appraise and so now you’ve got to get into the loan if they do buy it. So it’s got to appraise, they’ve got to qualify for the loan, typically it takes 45 days to close a loan with a lender these days. And a lot of times they fall apart because of inspections, because of appraisals, because of the credit of the buyer. So you’ve got a lot of headaches dealing with a realtor. But, you cash out of the deal and you get a lot less cash because it goes all different directions. But it might be the best way. Would it make more sense, though, if you wanted to make more money, to do a least option, for example?
Joe: Here’s how a lease option works. And then give them the pros and cons of that and maybe sell them on the idea of doing the for rent method and you can go and flip that property and make yourself a quick $5,000 or $10,000 and you know, get them a full price buyer that pays full market rent for that property and really solve their problem.
Joe: If you do that, and you show them their options, they’re much more willing to pick from a list of options than they are to do what you tell them to do. All right. Hope that helps. Good luck.