In real estate investing, you must have all the number to evaluate a deal properly and to make a good offer that both gets accepted and makes you a profit. Usually I find that when I talk to motivated sellers, they are reluctant to disclose some information. Mortgage balance is one of the things they are not willing to discuss. So how do you overcome these objections and get all the information you need?
Over the years in my real estate investing business, I have come to learn to deal only with sellers who are really motivated.
By being motivated, they must be willing to provide most of the information I need without pressure. I am not interested with sellers who are testing the ground so they can consider if to sell their house to me.
Most deals from motivated sellers are submitted through my real estate investor website. In this case, I only need a few minutes to evaluate the deal and make an offer because my website does the job of pre-screening them and pre-negotiating with them.
Let us look at a few objections and how to overcome them:
Mortgage balance: Once in a while when you talk to motivated sellers and ask them their mortgage balance, they might tell you it’s none of your business, or if they are polite “why do you need to know?”. You can clear this up with a simple statement:
“In order for me to able to evaluate the deal and make a fair offer that makes sense both to you and me and pay off the outstanding mortgage when I buy it, I must know the mortgage balance owed on it.”
Then I go completely silent… say nothing!
Usually they will consider it and give the information.
They have to understand that unless they provide the mortgage balance, you cannot make an offer. They will provide this information if they are motivated. You have no business talking to them further if they cannot provide this information.
A motivated seller will provide any information in the world to help you buy their house.
Repairs: The seller will always estimate repairs conservatively. I have learned that I have to fix bathrooms, kitchen, replace carpet and paint it.
Before I ask for repairs my conversation goes something like this: “How long have you lived in the house?”
“Have you done any remodeling on it?”
“So what repairs does the house need?”
I will always ask about carpet, paint, kitchen and bathrooms. You will get more reliable answers if your line of questioning goes this way.
Asking price: Asking price is the toughest and most important part of your conversation. Before you can ask this question, you must know the mortgage balance. My question goes something like this:
“If I can buy your house all cash and close quickly, what is the least you can take for it?” After they give their answer, I just say “Hmm…”.
Then I say nothing.
Not a word until they speak.
Usually they will talk their way down without me saying anything.
Sometimes I will still follow up with “Is that the best you can do?”.
This technique usually works like a charm.
Good luck in your next real estate investing deal.