This month’s tip is so critical to your success. There will be many times when you put deals out and instead of getting an offer, you get feedback from your Buyer. If it is constructive, and oftentimes it is by people who sincerely want the property, listen! Buyers, especially experienced Buyers can provide a wealth of knowledge for you on your deals. They oftentimes have the scars of rehabbing and know many things you may or may not have thought of. You want to take advantage of this information!
Some things they may share with you:
What is the real cost of the rehab (very common) to attain the ARV advertised
What the actual ARV for that area is. Remember, if they work that market hard, they oftentimes know several fine nuances that wholesalers rarely consider.
What is the real-time frame of the project. Example: historical properties almost always take longer due to increased rules that have to be followed during the project duration.
They don’t get too excited about the word ‘Hot’ or ‘unbelievable’ in your ad. If it’s a hot area, they usually already know it.
They hate highest and best. This is not the way to build relationships with Buyers. If you want the highest and best, that’s fine, but advertising it as such is a real turn off to serious Buyers. They want to know they can work with YOU to get the deal done.
They love building sincere relationships with people that put themselves in their shoes. In other words, it isn’t just about the wholesalers check. It’s about a win-win-win for Seller, Wholesaler and Buyer.
All of the above can be invaluable to you! Whenever a Buyer makes an offer, take the time to talk to them and get the reasoning why. It is a valuable opportunity to learn so much!
Now it is all too common for the deal to be simply overpriced. So let me give you a tip to never forget.
NEVER, and I mean NEVER argue with your Buyer. Easily a quick way to lose credibility in a hurry. Especially if you don’t have the experience they have rehabbing. They will see through you very quickly at which point you are toast. Don’t sacrifice a potential relationship just to be right! It’s not worth it. Admitting you made a mistake is a great way to build credibility because it shows transparency with your Buyers. They will respect and more importantly, remember that.
So what do you do when the deal is overpriced? Simple. You go back to the Seller and renegotiate! Too many people do not do this simple tip out of fear, ego or both. You have to give it a shot. I will tell you I have renegotiated many deals with Sellers to get them to the table. You leverage your Buyers feedback to provide quality feedback to your Seller as to why the deal doesn’t work and what it will take to make it work. In many cases, they will go for it if you present it professionally using concrete evidence.
Your Buyers will take note and appreciate this! When Buyers know you have their sincere best interests at heart, you will be amazed at what they will do and pay for. You’ll build a relationship. You’ll make money. Your business will grow. Everyone wins. So talk to your Buyers because you never know what piece of information they will give you that will jumpstart you to another level!