Why Would A Seller Accept A Lower Offer? | Wholesaling Real Estate

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Chapters

• 0:05 Understanding Seller Motivation for Lower Offers
• 13:33 Maximizing Seller Motivation for Lower Offers

Transcript

Speaker 1: 0:05

Why would a seller accept a lower offer? I get asked this question all the time by newer wholesalers. It kind of makes me laugh, because what do I talk about all the time? If you're talking to a seller, you need to get better at deciphering what their motivation for selling a property for a discount is. This is how you get to understand why would someone want to sell their house for less than what someone else is offering them. See, we want to make it all about the money, right? Why? Because that's where our brains go. Our brains are thinking like, hey, we need to get it at X amount, so then we can sell it at this amount, so then we can make a spread. We're business operators. That's what we're doing. These people are in some sort of distress Now. Sometimes their decision process is about money. Other times there's other factors that come in that would dictate whether or not they would accept a higher or a lower offer. This comes down to credibility, trust, timeline and, ultimately, all of those come down to their motivation. This is why it's critical to get great at asking questions in regards to their motivation and really understanding why would they want to sell their house for a discount?

Speaker 1: 1:43

Now let's use some examples of when I've been able to get a signed contract for a lot less than someone else's offer. Now, one of my most famous or, I guess, famous in my eyes, probably my favorite close of all time is when I was able to get a property under contract for well below $100,000 less than what Open Door was offering the exact same seller. Now why was I able to get that property under contract for so much less? Because of the convenience factor. There was other things going on there than just the dollars and cents that was going to go into her bank account on the close of this transaction. She needed to move across state lines. She needed help with that. She also wanted the timeline to be on her timeline, not open doors. That's one example.

Speaker 1: 2:38

Another example that has come up quite frequently recently has been wholesalers or real estate investors coming along and offering a higher amount to a seller because they were going to do a novation. They weren't going to wholesale the house. Now, to most people that are not thinking about the seller's motivation, this sounds like a great fit. Mr or Mrs Seller, you want $100,000. Well, what if I told you I could give you $120,000? Well, that's great, let's do it.

Speaker 1: 3:21

Unfortunately, sometimes what is needed to do innovation is extra time or more showings. Right, we need reasonable access to show our buyers, and then we're going to need somewhere between 90 to 120 days to do this transaction. Now, the value that we're adding to that seller is that we're going to give them more money, but if you don't truly understand their motivation and what they need out of this transaction, that might not be the best fit for them. They might be willing to sell their house for a lot less if the transaction can be quick and easy and not a ton of showings. This is where wholesaling has a place in the marketplace. This is why I sit here and I say, guys, novation is not always a better solution. And I say this until I'm blue in the face. And then I get told examples of where the novation did work. I'm not saying novations don't work and I'm not saying they don't have a place in the marketplace. I know that they do.

Speaker 1: 4:28

However, if you're trying to change every single transaction into a Novation, you're going to lose out to wholesalers on specific transactions. Now I just had one in Ohio where I talked to a seller live on this YouTube channel and he thought he was selling a deal to a wholesaler. Well, come to find out it was a Novation offer and that's where he really got upset, because there was a lack of transparency, there was too much time and there was going to be too many showings. He was like the house is basically just going to be listed on the MLS. That's what I'm trying to avoid. I'm willing to accept less money, to not have to go through that process, and because of that, I was able to get the property under contract for less money.

Speaker 1: 5:23

Again, when you talk to sellers, you have to understand all of the reasons why they're wanting to sell the house. We want to make the assumption that it's always about money, but again, it's not. If it were, a lot of these people would just always call realtors and list it on the MLS. So this is where you have to really understand where you are. Their solution. Now, another reason why you could get a property under contract for a lot less than a higher offer is because of how you navigate that conversation and the trust that you can build and the credibility that you can give that seller through your process. Now, this is important. If you're using the closer's formula, this is one of those areas where the majority of people, when they're new, kind of want to glaze over and not put as much importance on it. Reverse report. How we do that is building the credibility through our process at the end of the conversation.

Speaker 1: 6:28

So you start off, mr and Mrs Seller, would you like to sell 123 Main Street? You would Awesome. How much would you like to get for that property? $100,000. Okay, tell me a little bit about what you got going on. This is where you need to live.

Speaker 1: 6:44

Open-ended questions. You really decide what is that seller's motivation? Now you've decided you would like to attempt to close the deal? Reverse rapport. This is how we do this.

Speaker 1: 7:01

All right, mr Seller, if I were to come along, we were to come to an agreement on price today. I do want to explain how our process would work. I'm going to send you over a simple two-page agreement. Once you sign that, we're going to come out and we're going to do our inspection and we're going to walk through the property and we're going to verify that the property is everything that you said it is today. And if it is, then we're going to be good to close at your price and on that timeline.

Speaker 1: 7:29

But if it's not, then we are going to have to revisit price and timeline. Does that make sense, mr and Mrs Seller? It does. Okay, now here's why that's important. It's a very simple statement. It's not really over the top, but when you look at what our competition does, right Again, remember, I believe our competition is very weak and they suck. It's very lackluster when they explain what's going to happen next, mainly because they've stumbled and bumbled their way into even attempting to get to where a contract could be signed or even presented to the seller. So when we get down to this point, the fact that we even do anything is somewhat better than what our competition does, but it clearly identifies in very simple terms what the seller can expect moving forward.

Speaker 1: 8:26

Here's the other thing that I like about it. We're also being honest and transparent in the fact that, just because you said the house is in good condition, we are going to do an inspection and we're going to find out if the property is in good condition and if it's not, we are going to have to revisit price timeline. Now you might be thinking of certain scenarios in which this came back to bite you in the ass and a seller said well, you need to come out and you need to do your inspection or your walkthrough now. Great, this is where we are openly opening the door and saying let's overcome all of the objections right now, before we get into a short-term marriage. I love this. I love it when that objection comes up because no, no sir, this is my process and my process is the process in which I purchase houses. If you do not want to, you know, go through that process. I don't have to be your buyer.

Speaker 1: 9:31

The power of being in a seat of strength, right, this is how you build true credibility and rapport with a seller. See, our competition is not doing that. They want to go talk to Billy the Friend, the imaginary friend. And now I'm finding out that this is rampant throughout our industry. So now I'm going to get even louder about. This is how it should be done, because we're opening up any objection that comes up and for the sellers that accept it and say I completely understand it stands out from the masses, and then you walk them through getting the contract signed. This is how you could get someone to sign an agreement and accept an offer for less than your competition.

Speaker 1: 10:23

Look at the difference here. Say, I come along and I ask all these questions and I identify everything that's going on and why they're truly motivated to sell the house. And I offer this seller $90,000. Competition comes along. The competition says I need to go talk to my imaginary friend over here, but I'm going to fight for you, mr and Mrs Seller. They come back and they say Mr and Mrs Seller, I got you $95,000 and I fought tooth and nail thousand dollars and I fought tooth and nail. Now, if the true motivation here is not money related, we stand a very solid chance at getting that signed contract over the joker who is lying and manipulating and, quite frankly, the majority of sellers see right through it. Sellers see right through it. I mean, it's not what's getting them the deal. So, again, with the way that we are coming with credibility and a place of strength and being the shot caller and the authority in the conversation, this makes them trust us more than the competition that offered them more.

Speaker 1: 11:39

Here's the other thing Always ask the seller. They tell you I've been offered $95,000 and you're the only one to offer me $90,000. Ask them point blank why didn't you accept that higher offer? It's such a powerful question because that's where you will find out why they truly didn't accept it. Is it money related or is it because they truly didn't trust that other person? And what you will find out more often than not is that it had something to do with lack of credibility and lack of trust with our shitty ass competition. Lack of trust with our shitty-ass competition. This is how we regularly get properties under contract for far less than our competition, by simply just asking questions and really finding out. What position are they sitting in right now? You had a higher offer. You didn't accept it. Why not? Oh well, because, yeah, they're willing to give me more money, but they need 90 days and I need this done in 30 days. Oh, why did they need 90 days? Because they're doing a novation. They're just going to list it on the MLS. They didn't listen to you.

Speaker 1: 12:55

Mr and Mrs Seller, let me explain how my process could work. Yeah, it'll cost you five grand less, but I can take care of all of your needs. Are your needs worth taking $5,000 less? Think about the 10 types of sellers that we have. There's going to be the tired investors. There's going to be the tired investors, the ones that are really logical and money-based. Those are going to be the ones that are going to be a little bit more difficult to get under contract for less than a higher offer.

Speaker 1: 13:33

But think about all of the emotional type of sellers the probates, the inherited properties, the divorce, the physically distressed properties, the owner occupants right, the elderly and now have a physically distressed property that are owner occupied and they can't take care of the property anymore. When we're talking about an insignificant, small amount of money difference a couple thousand, maybe 10,000, 15,000. This is where that extra motivation and us understanding why they truly need to sell the house can make a big difference. So ultimately, when we think about why would a seller accept a lower offer, it comes down to two things One, you asking questions and truly understanding what their motivation is for selling that property. And two, being the authority coming from a place of strength and building that credibility and trust with them. Because I can promise you, your competition, my competition, sucks at doing that. We can beat them every single day and we do it and that is how we get sellers to accept lower offers. Let me know if I missed something in the comments. Make sure you give me a like. We'll see you guys tomorrow.