Real Estate Investment: How to Make an Offer with “Terms” Versus Making All Cash Offers
Author: Michel Lautensack
After going through the Three Rs with the seller by starting with a range, developing the range, then you do the Realistic Technique. “What do you realistically expect in this environment? Nobody’s selling anything. What are you realistically expecting? It’s a tough market to sell a house in. You’re obviously not going to get full asking.”
You can even use data. I think the average price right is about 93% of asking price. You can throw that number out there if you want. Say, “The national average is 93% of asking. If you’re asking $130,000 then 93% of that is …whatever.”
Then the real estate agent technique is you can get another 6-7% off of that.
That’s how you would move that price down. Obviously you’d have to make a decision as to whether $115,000 is the right price. Hopefully you’ve done some homework before you went out to this house and you know what the house is worth.
Maybe the house is worth $150,000 or $175,000. If you haven’t done your homework, obviously you wouldn’t be there. You need to have some sense of what the house might be worth.
That is the money stage and how you work somebody down through the three R techniques.
The fifth technique is called Terms.
Terms
This is where you start to talk about deferred financing, no money down, and all the things we talked about last week. We’re not going to do in depth on those.
Let’s say he owes $100,000 on that property. Say, “Mr. Jones, what if we considered this?” Again, use a very soft approach. “If I gave you $100,000 now, that would pay off your mortgage, right? What I’d do is the other $25,000 I’d give you in the form of payments over 100 months at $250 per month.”
That brings in the call from last week. Then you might move into the various no money down techniques.
That’s it. Those are the five steps. You would start out with developing the rapport. Then the upfront agreement where you get some sort of commitment on their terms and whether they’re going to give you and honest yes or an honest no. It can be either one. You don’t care, but please don’t do this thing down the middle. Don’t waste our time.
Then you go to three, develop the motivation. Figure out what their motivation is. Why are they selling? What’s happening in their lives that it’s important to get this house sold?
About the Author:
I invite you to learn more about Private Money Lending and get my new FREE 20-page ebook titled “Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!” by clicking here http://realestatewealthtoday.com/FREE-eBook.html . Mike Lautensack is a full-time real estate entrepreneur and creator of the Private Lending Presentation Kit. To learn more about this kit go to Private Lending Presentation Kit.
Article Source: ArticlesBase.com – Real Estate Investment: How to Make an Offer with “Terms” Versus Making All Cash Offers
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