Some months ago, a seller called me in response to a postcard mailing saying that he was looking to sell a single family house. And yet he was waiting for his son to move out of the house and said it would need a lot of work.

Over the years I have purchased many wholesale house deals from parents who could not get rid of there non-rent paying children. I attempted to set up the appointment but he said he would call once he knew his son was vacating the property.

I waited a few days and did just that, a follow up call. Follow up calls for wholesale houses are a sure way to net more sales. He said he was out of town at the time of my call and had asked if I would call him back again. I did just that a few weeks later. It appeared at that time that he was not a motivated seller, so I put him in my “luke-warm file” for about 4 weeks.

A month later, he called me back interested again in selling. I asked him to let me pull it up on the computer, and I had said I would call him back shortly (thus, establishing further rapport with the second telephone call and, at the same time sort of taking the deal away.) I called him back after waiting for about 25 minutes and began to question him about repairs and other pertinent questions. I attempted to have HIM say a price first, but to no avail; he would not quote me a price. My question to myself then was, “Do I go out and see if I can make it into a deal, or is this simply a waste of my time?” For some reason he would not mention a price at all. At that time, I did not know what I was about to learn.

Finally, after keeping things light, I asked him, “If I come out today to look at the house, and it will work for both of us, are you ready to move forward and make the agreement today?” He said he was. I left to see the house with apprehension, oh my fickle seller!

I arrived, briefly toured the property and then sat down in the living room to ask his best price on a quick close cash deal. He would not give me a price, period. I knew the house after repairs was worth about 120-130k, and it needed about $8k in repairs. Realizing he would not state a price first, the thought came to me to make a game out of the negotiations and I said, “Okay, how about fifty thousand?” Saying this in a jovial tone. (Thinking the whole time if I could get it for anywhere under $75k it would be good.  He paused and said, “No, I don’t think I could let it go for that.” My reply was, “Okay, well I mentioned the first price (smiling), now it’s your turn” in a fun, friendly, yet “play ball with me” kind of tone. Kindly looking at him. He said, “Maybe 55-60 thousand.” Trying not to show mass excitement, I took a breath, looked around the place from my seat and replied, “Oh, (pausing) well I might be able to go like fifty eight thousand.” He agreed, and even though my insides were shaking, I played it cool on the outside and was able to walk him through my simple two page agreement. He signed, and I left a happy, elated man.

This demonstrates a few things in how to talk with sellers, especially those who won’t give you a price; how to calmly get the contract signed when you know you have a very profitable deal before you. Never become over anxious to close the deal and run out the door, as much as you may feel the impulse to. It teaches the value of follow-up and not discarding old leads with equity in them (key word being equity) until you see that there is absolutely no chance of getting the deal. Finally it also taught me to no longer assume what a seller wants for a house. As many times I felt the seller wanted much more than they were content to receive. I removed the price out of my thoughts totally, so as to operate with an open mind.

There is more to this story, and I feel it would be beneficial to share it with you. The seller called me a few days later and said he could not let it go at that price. I was not sure how to handle it, but I told him I had already given it to my partners the attorneys, (not one attorney, but attorney(s) or my team of attorneys) and was not sure how they would handle the situation. This put me in the picture as the good guy and the attorneys the bad guys. I then said, “Listen, I understand. Let me call and talk to the guys. No promises and they might very well hold you to the current agreement, but let me see what I can do, and maybe I can budge them up some.” Playing the Good Cop Bad Cop scenario.

Then I asked him what price would be his best and final number IF I could get the guys to work with us? He said, “$67 k.” I then said, “Hum, well that’s a $9k increase in price.” I knew we were still good, but if I caved in to his price too quickly, then he would ask for more again and again so I figured it best to get the firm and final, re-commitment out of the seller. I told him that I would talk to the attorneys and tell them that he was requesting $67k. I said that “the attorneys were likely to be busy running in and out of the courthouse that Tuesday between cases, but I would try to catch one if possible, and I would try to call him back later in the day or the next day.”

I knew the time would increase the sweat factor so I let him stew on it overnight. If there is one thing I do not like, it is when someone goes back on his word without a great reason. I also knew I was getting the house at a great price, so I did not want to take advantage of the situation as well as risk losing the deal.

Later, I called my partners to discuss the new price with them, and we agreed to the $67k. I called the seller back and said, “Listen, my partners will do the deal and they are only willing to split the difference between the original fifty eight thousand you agreed to and the sixty seven thousand that you last quoted.” The seller agreed to split the price and we settled at $62k. Still, it was a fabulous deal. Then I reconfirmed with him this was the final offer and I told him, “The last thing we want to do is get the attorneys involved in this again.” Let me repeat that sentence. “The last thing we want to do is get the attorneys involved.” “No one wants to spend money on those guys.”

Now, I did not tell him I would hire an attorney, or that I would sue. I just planted a tiny mustard sized, yet bitter seed in his mind. I planted it in a nice, calm, and non threatening manner. I have used that statement more than once on sellers who entertained other investors’ offers after we had a signed deal and shook hands. Usually it works like magic, but sometimes it doesn’t. Nothing works perfectly every time.

At the end of this deal, which I had my partner put the money up for and who did the rehab work, I alone netted around $14,000.00, not bad for a few hours of negotiation and doing my homework. I was able to do the deal with nothing down!

I always encourage new real estate investors to buy the right educational materials, get a good website, and finally do the correct marketing.

Happy Investing,
Bill Guerra

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