Your Offer Isn't Insulting Your Pitch Is | Seller Objections

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Transcript

Why Offers Feel Insulting

SPEAKER_00 0:02

If a seller says your offer is insulting, the first thing you need to understand is this the offer is not insulting. The math is the math. What is insulting is when you throw out a number with no explanation, no context, no logic, and expect the seller to just accept it. That is where most wholesalers mess this up. They run their numbers in their head, they know what the property's worth, they know what the repairs are needed, they know what the in buyer needs to make, they know there's holding costs, closing costs, commissions, risk, and profit that have to be accounted for. But then they get on the phone with the seller and just say, Yeah, I can do $115,000. And the seller is sitting there thinking, What? Are you kidding me? Zillow says my property is worth $220,000 and my neighbor sold for $240,000. Do you think I'm stupid? Now they're offended. Not because the math was wrong, but because you did not explain the math.

The Emotional Seller Objection

SPEAKER_00 1:09

What's up, everybody? RJ Base III here, and in today's episode of Overcoming Objections, we're talking about one of the most emotional objections you're gonna hear from sellers. That our offer is insulting. Sometimes they will say it exactly like that. Sometimes they'll say, Oh, that's way too low. You're trying to steal my house. You must think I'm desperate. I would never sell for that. That number is ridiculous. You're just lowballing me. However, they say it, the emotion behind it is the same. They feel disrespected. And this is where amateur wholesalers make one of two mistakes. Mistake number one, they become defensive. They say, Well, that's just what it's worth. No, it's not. It's not what it's worth. That's what you can pay based on your investment strategy. There's a difference. Mistake number two, they immediately start negotiating against themselves. They say, Well, what number would you take? And now they've lost control of the conversation because they never explained how they got their number in the first place. So today I want to break down how to handle this objection. Your offer is insulting. And more importantly, how to prevent the seller from feeling that way before you ever make the offer. The first thing we have to understand is this our offer is not personal. It is not a judgment of the seller, it's not a judgment of their memories, it's not a judgment of what they paid for the property, it's

Two Amateur Mistakes To Avoid

SPEAKER_00 2:40

not a judgment of what they think the property could be worth. It is simply the result of math. Math, not magic. That's it. When we make an offer, we're not sitting there saying, How can I insult this seller today? No. We are looking at the property and asking, what can this property realistically be worth after it is renovated? What is it going to require in repairs to reach that value? What are the holding costs? What are the closing costs? What are the what's the risk? And what does the end buyer need to make in order for this investment to actually make sense? That is the conversation. The offer is not pulled out of thin air. At least it should not be. But here's the problem. Most wholesalers do not know how to explain that. They know how to say a number. They do not know how to walk a seller through the reasoning behind the number. And when you do not explain the reasoning, the seller creates their own reasoning. They assume you are lowballing them, just like the competition. They assume you're trying to take advantage of them or assume that you're playing games. They assume you're just throwing out the lowest number possible to see if they will bite. And honestly, because a lot of wholesalers do exactly that, I understand why sellers feel that way. Let's look at it from the seller's perspective. Most wholesalers are not investors. They do not think about ARV, rehab, holding costs, closing costs, selling costs, private money, risk, or profit margins. They think about value differently. They think my neighbor sold for $250,000. Zillow says my house is worth $235,000. I paid $180,000 for it. I put a new roof on it eight years ago. This house has been in my family for 20 years. I know what homes are going for in this area. So when you come in and you offer $130,000, it feels like an insult. But that is because you and the seller are not having the same conversation. The seller is talking about potential retail value. You're talking about as is investor value. Those are not the same thing. Retail value

Retail Value Versus Investor Value

SPEAKER_00 4:55

is what a fixed-up house might sell for to an owner-occupant after it has been renovated, cleaned up, marketed, listed, inspected, appraised, negotiated, and financed. As is investor value is what someone can pay today in the current condition, while taking on the repairs, the risk, the holding time, the closing costs, the selling costs, and the uncertainty. Those are two completely different numbers. And if you do not explain that difference, the seller is going to think that your offer is disrespectful. Here's the big lesson of this episode. Do not just give an offer. Explain the math before the offer. This is where amateur wholesalers lose deals. They're in such a rush to get to the number that they forget the number needs a runway. If you drop a low number out of nowhere, it feels like a slap in the face. But if you slowly walk the seller through the logic, the number starts to make sense. They may still not like it, they may still not accept it, they may still want more, but they are much less likely to feel insulted because now they understand how you got there. That matters. The goal is not always for the seller to love your number. The goal is for the seller to understand your number. And there's a big difference. Before I give the offer, I want the seller to understand. Here's what the property could be worth fixed up. Here's what I'm seeing in repairs. Here's what the investor is going to have to spend. Here's what it costs to hold and resell the property. And here's why there has to be profit for the person doing the work. Here's how that backs us into the offer. Now the offer is not just a random number, it is the conclusion of the conversation. The formula is simple. After repair value minus repairs, minus holding costs, minus closing costs, minus the selling costs, minus the in buyer's profit equals the investor's maximum allowable offer. What we refer to as where in buyers buy. That's it. Now the exact numbers will change depending on the market, the property, the exit strategy,

Explain The Math Before Price

SPEAKER_00 7:10

and the buyer. But the framework does not change. So let's use a simple example. Let's say the property is worth $250,000 fully fixed up. Not in its current condition, fully fixed up, updated, clean, functional, ready for a retail buyer. Now let's say the property needs $50,000 in rehab to achieve that value. That brings us down to $200,000. Then the investor has closing costs, holding costs, utilities, insurance, taxes, money costs, potential surprises. Then they resell it. They may have agent commissions, seller concessions, more closing costs, and time on market. So maybe that's another $25,000 to $30,000. Now we are around $170,000 to $175,000. And the in buyer still has to make profit because no investor is going to put up the money, take on the risk, manage the rehab, deal with contractors, hold the property, and resell it just to break even, they need to make money. That's not greed, that's just business. So if the in buyer needs to make $40,000 to $50,000 for the deal to be worth doing, now the actual investor offer may be around $120,000 to $125,000. Now imagine if you just told the seller, I can offer $125,000. Of course, they might feel insulted, but if you walk them through the math first, they can at least see how the number was created. Again, they may not like it, but now it is logical. Now here's another mistake. Wholesalers apologize for the offer. They say, I'm sorry, the best I can do is stop doing that. Do not apologize for math. You can be respectful, you can be empathetic, you can be calm, but you do not need to apologize for giving an offer that is based on reality. Because when you apologize for the offer, you make it seem like you did something wrong. You did not. If your numbers are real, your comps are real, your repair estimate is real, and your logic is real. So stand on it. The offer is not insulting, it is simply the number that makes the deal work. Now, how you present it can be insulting. If you are arrogant, dismissive, lazy, or condescending, well,

A Simple Offer Breakdown Example

SPEAKER_00 9:40

that's insulting. If you say your house is a dump, I can only give you this, that's insulting. If you make the seller feel stupid for wanting more, that's insulting. If you throw out a low number with no explanation, well then you deserve to say you insulted me. But the actual offer itself, no. The offer is math. It's that simple. So let's talk about the actual response. The seller says, your offer is insulting. Do not say, well, that's all it's worth. Don't say, good luck trying to get more. Don't say, you clearly do not understand investing. Do not say, well, what number do you want? Instead, slow the conversation down. Say, I understand why it might feel that way at first. And just to be clear, I'm not trying to insult you at all. The offer is not based on what I think of you or even what I think of the property emotionally. It is based on the math of what the property could be worth after repairs, what it needs to get there, and what an investor would have to spend and risk to make the project work. Then walk them through it. Let's say the property is worth around X after it is completely renovated. To get that value, based on what we discussed, it looks like it needs around Y in repairs. Then there are closing costs, holding costs, utilities taxes, insurance, and the cost to resell the property. And then the buyer doing the work still has to make a profit for taking on the risk. So when we subtract those things, that is how we get to the offer. And then you say, I completely understand if that number does not work for you. But I do want you to understand it was not pulled out of thin air and it was not meant to be disrespectful. It is just the number that makes the project make sense. That is how a professional wholesaler handles it. Calm, clear, logical, no defensiveness. The best way to overcome this objection is to prevent it. And the way you prevent it is by setting the framework before you make the offer. Before you ever say the number, you should say something like, Before I give you my offer, I want to explain how we're looking at it so the number makes sense. We're not basing this off the prettiest house in the neighborhood. We're basing it off of what the property could be worth after it is fixed up, what it could cost to get there, and what an investor would need to account for to take on the project. That sentence changes everything because now the seller knows what conversation they are in. You are not debating what the perfect house down the street sold for. You're analyzing what this house is worth in this condition to an investor. So then you can say, if a fully renovated version of this house could sell for around X, and this property needs around Y in repairs, then the investor has to work backwards from there. They have to account for repair costs, closing costs, holding costs,

Respectful Delivery Without Apologizing

SPEAKER_00 12:55

resale costs, and profit. That is what backs us into the offer. Now, when you give the number, it lands differently because you did not surprise them with it. You prepared them for it. Here's a line I want you to remember. Stop selling the offer. Start selling the logic. Most wholesalers try to sell the offer on the number. That's hard because sellers usually want more money. Instead, sell them on the logic. Make the math make sense. Because when the math makes sense, the offer becomes less emotional. If the seller disagrees, now you can have a productive conversation. They may say, I don't think it needs $50,000 in repairs. Great. Now you can talk about repairs. They might say, I think it could be worth more than $250,000 fixed up. Great. Well now we can talk about the comps. They might even say, I do not think the buyer needs to make that much profit. That's rare, but great. Now we can talk about risk. And that's a much better conversation than you're lowballing me. No, I'm not. Yes, you are. No, I'm not. That conversation goes nowhere. But when you explain the math, you move from emotion to logic. And that is where you want the conversation to be. This is another huge teaching point. The seller is usually comparing your offer to the wrong number. They're comparing your cash offer to retail sales. That's not a fair comparison. If the seller wants retail value, they can pursue retail value. They can clean out the house, make repairs, list with an agent, allow showings, negotiate inspection repairs, wait on the buyer's financing, pay commissions, closing costs, risk the appraisal, risk the buyer backing out, sit on the market, reduce the price if needed. And maybe they get a higher number. That's a real option. And I'm not against that option. But that option is not the same as selling as is, without repairs, without showings,

The Exact Script And Key Question

SPEAKER_00 15:05

without commissions, without waiting, and without taking on that work. Convenience has a cost. Certainty has a cost. Speed as is. The seller does not have to choose your offer, but they do need to understand what they are comparing. A retail listing and an as-is investor offer are not the same product. One is maximum exposure. The other is maximum convenience. Those are different lanes. So here's a clean version you can use on the phone when speaking to them. The seller says, your offer is insulting. You say, I understand why it might feel that way at first. And I definitely do not mean it that way. The offer is not personal. It is not based on me trying to disrespect you or the property. It is based on the math of what an investor can pay and still make the project work. Then pause. The way we look at it is pretty simple. We start with what the property could realistically be worth after it is fully renovated. Then we subtract what it could cost to get it to that condition. Then we have to account for holding costs, closing costs, resale costs, and the risk involved in taking on the project. And then the end buyer still has to make a profit for putting up the money and doing the work. Pause. So if the fully renovated value is around X and the repairs are around Y, and the cost and profit needed are around Z, that is what backs us into this offer. I completely understand if it does not work for you, but I do want you to know it was not pulled out of thin air. This is just the number that makes the deal make sense. And then ask, which part of that math do you see differently? And that's a powerful question because now you're not arguing emotion. You're asking them to identify the part of the logic that they disagree with. Do they disagree with the value, the repairs, the cost, the profit? Now you know what to talk about. This is one of the best questions you can ask. Which part of the math do you see differently? Because if they say your offer's insulting, what most wholesalers do is immediately jump to price. They start negotiating, but the price is just the end result. You need to know which input they disagree with. If they believe the ARV is higher, then discuss those comps. If they believe the repairs are lower, then discuss the condition. If they understand holding costs, explain them. If they do not think the buyer should make a profit, then ask and explain the risk involved. But do not just randomly raise your offer because the seller did not like the first number. That's amateur behavior. If the math changes, the offer can change. If the math does not change, the offer does not change. That is how you stay disciplined. And this is why your emotions are not a strategy. The seller getting upset does not automatically mean that your number is wrong. It may mean your explanation was weak. So improve the explanation, but do not abandon the math. Now let's be honest. Sometimes the seller's right. Sometimes your offer is too low. Sometimes you miss the ARV. Sometimes you overestimated repairs. Sometimes you use bad comps. Sometimes you did not understand the neighborhood. Sometimes

Discipline, Preparation, And Closing

SPEAKER_00 18:45

your buyer's margin is unrealistic. Sometimes you just threw out a number to see if they would take it. And if that is the case, the problem is not the seller being offended. The problem is that you were not prepared. That is why you have to know your numbers. Cannot use math as a shield if your math is garbage. If you're going to tell the seller the offer is based on math, then you better actually have the math. Know the comps, know the condition, know the exit strategy, know the repairs, know your buyer's expectations, know the cost, know why the number is the number. Because if you do not know, the seller will feel it. Confidence comes from preparation. The real lesson here is simple. An offer without context feels like a low ball. An offer with logic feels like a business decision. That's the difference. The number may be exactly the same, but the way it lands is completely different. If I say I could give you $125,000, that may feel insulting. But if I say based on the renovated value being around $220,000, the property needing roughly $45,000 in work, the holding costs, closing costs, resale costs, and the risk, the number that makes sense for us is $110,000. Well, that's different. Again, the seller may still not like it, but now they understand it. And that's the goal. You're not trying to bully them into accepting the offer. You're trying to help them understand why the offer is what it is. So the next time a seller says your offer is insulting, don't get defensive, don't panic, do not immediately raise your offer, and do not apologize for the math. Slow the conversation down. Explain the logic, walk them through the value, walk through the repairs, through the costs, walk through the profit needed for the person taking on the project, and then ask, which part of the math do you see differently? Because our offer is not designed to insult anybody. It is designed to make the deal work. If the math works, we can make an offer. If the math does not work, we cannot. It is that simple. The seller does not have to accept it. The seller does not have to like it. They should be able to understand it. And if you can explain the offer slowly, clearly, and logically before you ever give the number, you will stop creating unnecessary objections. Because many sellers do not think you are lowballing them because your number's wrong. They think you are lowballing them because you never explained how you got there. That's the difference between an amateur and a professional. Alright, guys, that's our episode of overcoming objections. Let me know. Do you agree? Let me know in the comments. Regardless, show me some love. Like today's video, and we'll see you guys tomorrow.