There is a reason behind every rejected offer you submit. Instead of throwing your hands up in disgust and asking why someone would not sell to you, take a closer examination. Most investors will quickly move on to the next deal when their offer is rejected instead of seeing it through. What you may find is that your offer could have been higher than the final selling price. If this is the case, your problem may be with your delivery, personality or something on your contract. Instead of trying to focus on the numbers when you make an offer, try establishing a relationship with the seller. Developing chemistry with a seller is perhaps the best thing you can do as an investor.
Your seller is a living, breathing human being. Even if you are trying to buy a bank owned property, you are dealing with a negotiator who is a real person. It is much easier to deal with homeowners you can sit down and talk with and discover their motivation. Instead of viewing the property and the homeowner as just the means to get another deal, you should take the time and find out why they are selling and what they want out of the deal. You may find out that they don’t want to sell to an investor or sell to an investor who is looking to rehab their property. Whatever their motivation and logic is, you can find it out by sitting down with most homeowners.
Regardless of the sellers situation, you need to know that they don’t have to sell to you. For many distressed homeowners, by the time you meet, the worst is already behind them. They know they have damaged their credit and the possibility of retaining the property is gone. The only thing left for them is to avoid foreclosure and save some face. At this point they will think about selling, but they will have multiple investors beating down their door and will choose the one that they feel the most comfortable with and understands what they want out of the deal. This could be just a few months more until school is over, relocation assistance or to try to salvage some money from the lender. Whatever it is, you need to listen to it and cater your offer around it.
It is always beneficial to meet the homeowners at the property and to spend time explaining the process to them. If you roll up to the property in a fancy suit talking about what changes you will make to the property and asking them how quickly they can get out, you probably won’t get them to sign a contract. Even if you do you can bet that as soon as another investor comes along they will work with them instead. You can be upfront about your intentions with the property, but do it in a way that shows compassion for their situation. Yes, your goal is to make money, but convey to them that there is significant risk association and you will try to keep their goals in mind throughout the process. You may lose a deal at their dining room table, but that is better than four months later at the closing table.
If you acknowledge and understand the seller’s situation, you will gain their trust and ultimately get the deal. Often times, the little things matter with sellers. The more you can find out, the greater your chances will be at success.
