30 Days to Real Estate Cash 107
The response you get when you ask the question properly can bring the discussion around to the seller telling you what they owe. If it’s a $100,000 house, and they owe $90,000, then there will be no deal. There’s no room between value and what is necessary to pay off the loan to pay your fee and interest a buyer. You can politely stop the conversation and move on. If, on the other hand, the payoff is lower and they say that they may take the payoff to get rid of the property quickly, then you can ask them the amount of the payoff and maybe have a deal. The very best answer you can get to the payoff question is some- thing like, “ I inherited the property and it’s free and clear. ” Then there’s loads of room to negotiate! Once you determine the bottom price, try to work towards that number if it would be a good deal. Only make offers when there’s a high likelihood that they’ll get accepted at the low end. This provides negotiation room as well as profit for the investor and the wholesaler. When you make an offer, you can explain that your offer is re- flective of the funds needed for the rehab costs. This is the other negotiation tool you will use to justify the price other than just comparing their property to foreclosures. If you point out to the seller what they are competing against, they may better under- stand the basis of your aggressive offer. By the way, even after all of the mortgage and home price prob- lems that began in 2007, about 40% of all homes in the United States are owned free and clear. Therefore, there’s a whole lot of room for negotiation when there is nothing owed on these types of properties. Many times you can be more successful with completing deals by using these strategies than you can be in buying foreclosure properties.
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