Educating Sellers Without Pushing Them Away

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Transcript

Why Seller Education Closes Deals

SPEAKER_01 0:03

Welcome back to seller call film room, the series where I'm going to show you a live seller call and give you one specific tactic to take away from the close. And today we're going to be talking about how to properly educate the seller. Now, what you guys are going to see during this live seller call is that the seller doesn't want to give me her asking price up front. However, as I start asking multiple times, it kind of becomes apparent that she's not withholding the information. She truly just doesn't know what she can get for her property. She doesn't know what the asking price is. And so she's like, I don't know how you guys do it. I don't know if you go look at the tax assessed value and give me like 75% of that. And the moment that she gives me that opening, I kind of walk through the door at that point in time and just full-on go into the education process that we normally do in reference to the four-seller buckets when we're talking to someone that's highly motivated with the incorrect price. Well, in this case, the reason why the price is incorrect is because we don't have one. And so I don't normally like just to shoot out a blind offer, but at least in this case, I'm finding out that the seller doesn't have an asking price and really she just doesn't know how to come up with it. She knows that her property needs to be sold for a discount. She just doesn't know what that right price is. So I take that opportunity to then educate her on how I'm coming up with my numbers and then make my offer and then explain the rest of the process. So I build the credibility, explaining, hey, this is what's going to happen. You're going to sign the contract, we're going to come out, we're going to do our due diligence. If the price is incorrect, we'll let you know. And she appreciates that. And so one of the key takeaways is that the end of the conversation, she actually thanks me. She thanks me for walking her through this and explaining this and making sure that we can close on her timeline and we're not pressuring her to close on a specific date. That is how you close these types of sellers. And this is going to happen, especially when it's when you're dealing with someone that is elderly, maybe they haven't had many real estate transactions, and they just don't quite understand what price their house needs to sell for. So enjoy this live seller call film review with a seller that needs to be educated. Hello,

Seller Wants An Offer First

SPEAKER_01 2:41

this is RJ. Yes, hello.

SPEAKER_00 2:44

Uh, I just missed your call. Uh, this is Julie, uh, calling regarding the house that I want to sell that I live in here on Corey Street.

SPEAKER_01 2:54

Yes, ma'am. How are you doing today?

SPEAKER_00 2:57

Oh, I'm keeping busy and then we have a nice weather, so um, yeah, I'm interested in selling. I have a two-story house, and I'm interested in going to a one-story house. So um, I was trying to one half of what real estates and showings, and so I thought I'd make an inquiry and see what you had to offer.

SPEAKER_01 3:16

Gotcha. Uh, do you have a number in mind that you want to get for the property?

SPEAKER_00 3:22

Yes, I do. But I still want to know what people like you offer.

SPEAKER_01 3:29

Well, I'll be honest with you, I don't necessarily like to come in and just blindly offer stuff. Um, you know, I don't know anything about the property outside of the little bit of information that you've given me here.

SPEAKER_00 3:42

Um look it up online if um, you know, like the auditor site or something like that for information.

SPEAKER_01 3:51

Well, yeah, I mean I I can look up the information, but normally what I like to try to do is is in your case, see what you're looking to get for the property, and then from there kind of explain what the options are to get you as close to that as possible. You know, I don't know anything about the condition of the property or anything like that. So um how long how long have you owned the property?

SPEAKER_00 4:14

I'm the only one who lives here, and so it's just a matter of um of a senior citizen that's looking to you know get uh a single story home over the two-story because I really don't go up and downstairs very much. Okay, now as far as I know, like if you were to look at the tax thing, it's got an evaluation of $120,000.

SPEAKER_01 4:40

Right.

SPEAKER_00 4:42

And I I mean, I mean, I don't know if you offer like on a percentage basis or whatever, you know, and so I mean that's about the guideline I can give you. I do I have a property that sold in the area a month ago, another one sold with similar square footage for $120,000. So, but I mean, I I understand you people have to make money on what you buy. So I just want to know do you offer like a percentage of 75% of that, or what what kind of percentage do you offer?

Explaining Comps And The 70% Rule

SPEAKER_01 5:19

So normally what we do is is we try to find like the nicest property with similar square footage, similar bed and bath count, similar style, you know, age built, um, and then say, okay, well, that's what it could be worth if we fixed it up to that degree, you know, and then we'll offer 70% of that minus the repairs that it would take to get to that. So if you say, hey, a house sold for 120, maybe it wasn't fixed up. Maybe if we could find something that sold for 175, but it was fixed up, then we would offer 70% of that minus what it would cost for us to make the house look like that. Um, so that's why I'm saying, like, go ahead. Um, no, not necessarily. I mean, I normally when you say, hey, it's you know, it's been lived in, and you know, I have a pretty good idea of what that means. You know, I do this all day, every day. So normally that means, you know, it's it's livable condition, but it's probably not been remodeled um in the past couple of years. So, you know, if we can find something that's completely remodeled and it's sold for a high dollar amount, then that's great for us because that means we could come in and say, hey, that's what we can make it into. So that's what I'm looking at right now in my system is to try to find something that sold for a much higher dollar amount. Um, so looking here, um there's a couple that are like, for example, there's a property on Fraser Street, um, which is just a couple of blocks away from you. That's how familiar Fraser is, yes. So that's there's a house there listed for 200,000. Um, and it is less square footage than yours. So what I'll do now is is I'll go look at the pictures of that. And yeah, so someone like me came in, they put all new flooring, painted it, new fixtures, new kitchen, bathrooms. I mean, they did a full remodel of this, um, and it's been on the market for 28 days. Um, so that gives us a general idea of what potentially a house could could go for. Um so in that case, if we said 200,000 and we multiply that by 70 percent, that's 140. And then we say your house is 1670 square feet. Say we you know we spent 45,000 and repairs on it, then we could be somewhere in like the 90, 95,000 range.

SPEAKER_00 8:16

Okay. So how do I go about making arrangements with you to do what you need to do to make uh our offer?

Making A Conservative Offer

SPEAKER_01 8:28

So the way it works with us and our company, by the way, I'm I'm the owner of titanium investments, so I'm the owner of the company. So the way that we we do things is is I can say, you know, based off the information that you provided me and the general idea that I have, I would feel comfortable saying 90,000. I could send you the contract for 90,000. When you sign that contract for the 90,000, we open up title, we wait on the title report to come back. I'm assuming you know you're the sole owner. Um, do you have a mortgage on it or is it free and clear?

SPEAKER_00 9:08

No, it has a mortgage at this time, right? So yeah, yeah.

SPEAKER_01 9:13

So the title company would, you know, call to get the payoff for your mortgage, and then we would come out, we would want the property, inspect it, come up with a is forty five thousand dollars going to be the number that we need to be at rehab-wise, and if it is, then we close later that month. Um, if it's not, then we come back and we say, hey, you know, Judy, we we thought we could do this for $45,000, but it's really $55,000. So we need to come down $10,000 on the price. And you can either say, you know, take a hike, or okay, I'm willing to accept that, and then we close later that month. So that's kind of our process there. I'll be honest with you, we do not like to do price drops because I I that's why I'd

Contract, Title, And Due Diligence

SPEAKER_01 9:58

like to be conservative up front and say I feel pretty confident about the $90,000 number.

Flexible Closing Dates Without Pressure

SPEAKER_01 10:04

Um, the the flip side of that also is is like I know that you need to find a place to go. So we can also work around your time schedule. So if you say, hey, RJ, I need like 90 days to go find a property to live in, then we can also work around that schedule as well. So it's not like we have to close later this month. That's just what we normally do. But if you need time, then we can also work around that as well.

SPEAKER_00 10:31

Yeah, yeah. Well, I appreciate your explaining everything because you send a copy of the contract then.

SPEAKER_01 10:37

Yes, ma'am. Um, let me verify I've got your email correct. I have you know what, that is pretty pretty crazy, Judy. I've been doing this for a long time. I've never heard just mail dot com. That's pretty uh that's pretty unique.

SPEAKER_00 11:10

I've had it for like 15 years and and I don't like Gmail anything.

SPEAKER_01 11:16

That's that's crazy. I bet you you get people that send stuff to gmail.com all the time, don't you?

SPEAKER_00 11:23

I always emphasize it is not Gmail.

SPEAKER_01 11:26

Right. I I almost asked you, like, is this Gmail? Did you typo that? But no, I I appreciate you saying that. So yeah, what I'll do is is I'll go write up the the agreement now. It's two and a half pages, so it's not anything crazy in there or anything like that. It's pretty straightforward, but yeah, I'll send it to you. Um, the subject line will just be purchase agreement and your address, and then at that point in time you can click in it, you can review it, and whenever you're ready, you can sign it right there. Okay.

SPEAKER_00 11:58

Oh, fantastic. All righty. Uh look forward to receiving it from you, and I'll read it over, check things out. When is there any other do you want pictures or information?

Photos, Closing Date, And Next Steps

SPEAKER_01 12:10

Yes, we would love to get pictures from you. Um, you don't have to send those until you sign the contract. Um, but yeah, you can send us pictures. And then uh the question that I have for you is when do you want me to put a closing date on there? Because do you need time or do you have a place to go?

SPEAKER_00 12:28

I don't have a place to go yet, but I would think as a closing date, 30 to 60 days, whatever's convenient for you, because you like you said, you'd have somebody come out and we think so.

SPEAKER_01 12:40

Normally we put 30 days on there, but I just don't want to to pressure you, you know. So why don't I just put the end of July and it's on or before the end of July? So if you're like, hey, I'm ready to close and title's clear, then uh we can close before then, okay?

SPEAKER_00 13:00

That would be excellent. I really appreciate your doing that.

SPEAKER_01 13:03

Absolutely, Judy. Okay, well, I'll send that over to you here shortly. And uh feel free to give me a call back. This is my office phone number. And again, my name's RJ Bates, so you can call back and ask for me anytime, okay?

SPEAKER_00 13:16

That's that's what I did too. And thank you for your interest and concern. Thank you. Yes, ma'am.

SPEAKER_01 13:23

All right, thank you, ma'am. Bye bye.