Weekly Video Blog #128 - How to Make a Low Offer With Integrity

Hi, this is Dean Graziosi, and welcome to this week's blog. Or should I say school still in session. You know, I walked into the whiteboard. This is our conference room, and this was still up from last week. If you didn't see last week's blog, you should go check it out. I talked about, you know, retail comps or after repair value comps, and I talked about how that flowed and then the foreclosure comps, so you can find that balance of where it's selling after it's repaired in retail or where are the investors paying. So I did this last week to give you kind of that quick snapshot. I told you, I went over with Matt Larson, one of my top students. This was great because there's a lot deeper way to get these numbers, but the real quick way is the retail comps and the foreclosure comps. So we got a lot of feedback and some emails and some calls with people saying, well, if someone calls me, how do I make low offers? Well, there's a lot of strategies we teach. And if you're in my success academy or here@dg.com or you had somebody like Matt Larson or one of our top students go to your house to help you, you know, we give you a process on how to make offers. But let's just use an example here. Again, this is what we talked about last week. So how do we get down to this $55,000 price that we want to lock it up or purchase it for? Well, there's a lot of ways, like I said, but one way we know. Let's take for example, how to grab a new pen. That red one wasn't working. So let's take for example that you do a bandit sign that says, we buy houses, any condition, right? And then you have your local number or, you know, a number of 4, 8, 0 here in Phoenix, right? And then xxxx, there's your number, right? So somebody sees these signs, you get out there and put 25 bandit signs out. If you haven't heard of the bandit sign strategy, it's one of the best way to find great deals in your area before the MLS or someone who is already sick and went through the mls. It's just a great way to find deals. If you don't know about the bandit sign, you can go back to conference calls. We did one. I don't know if it was Matt or Greg or I did it on how to use this strategy. Okay. Bandit signs are amazing. If you want to comment, if you're using them and the success you've had or not, let us know. So say someone calls in on a bandit sign ad. We buy houses, they're going to call in, you're going to get. Listen, across the country we're averaging three calls a day. Some people are getting 10, some people are getting one. Three calls a day is what you should get. And very qualified leads. Now when someone calls in again, they might be looking at this retail of $100,000 for their house. But do they know they can get that? No. In today's economy, they know they can. They already tried. Or they don't think they can. But that's their dream, right? We need to buy it down here. But here's the biggest thing. The reason I'm sharing this today is a lot of you feel like you're insulting people by making a low offer. Now here's how you would insult somebody. Somebody calls you off a bandit sign says, I have a three bedroom, two bath house and it's brick and it's in XYZ neighborhood. And they say, I'm hoping to get 100 grand for it. And you say, ah, you'll never get 100 grand. The house is probably not in good shape. I'll give you 55 grand. Take it or leave it. That's when you feel bad. That's when you have somebody hang up on you. I've never had anybody hang up on me when I negotiate. Mats never have. Our top studies students have never. Because we speak intelligently. So if someone's asking here, there are key triggers that you can ask that can get somebody down to this area. First of all, I want you to realize something. When you get to negotiating, when you know this number, the foreclosure number, the foreclosure comps. When someone says, I want 100 grand, you say, well, before we get there, let's ask about your house. So you can go through the whole, where is it, where it's located, what condition is it in? And you can ask them if you needed to repair it, how much do you think it would cost to repair? Most people guess so let's just say someone throws out 20k, right? Well, if they throw out 20k and this is an example that's used over and over because I hear it over and over right now. You know, if they were hoping for 100, it's already down to 80 because they already told you that their house needs 20,000 in repair. Now when you start talking to somebody and you're feeling them out and getting the information and why they want to sell. Remember when you talk to somebody, guys, you don't want to talk to somebody who thinks they might want to sell. Or you get somebody on the phone, they go, oh my God, we just did the house over. It's in perfect condition. It's in a great location. We're just thinking we might want to move to another state. We're not sure yet. That's not the person who's going to give you the deal when you find out why they want to sell. When someone says, we got a new job in a different city, my wife's already there and she's got a new house, or I lost my job and we need to sell, or I'm going into foreclosure, or someone passed away in my family and left me this house and it's kind of a burden. They're the kind of people that are motivated. They need to sell. You're doing them a service by taking this property off their hands. So when you have a motivated person who calls you and you find out the information on their house, before you go into looking at the house or even you want to find how low they would go, one is understanding how much it's going to need in repairs, or at least what they think in most cases. I've seen people overestimate what it's going to cost. But here's the reason I taught you this last week, the foreclosure comps that are in here, and why I'm sharing this lesson today. When somebody simply says, I want too much money for my house, you could say, you know what, I'm sorry to hear that. Maybe you need to try to get a real estate agent and sell it in retail. Because the hard part is you're competing with foreclosures in your area and the average foreclosure is selling significantly lower than what you're already thinking. So when you say that automatically, is it you making them a low offer to piss them off? No, you're just relieving the facts. Retail is up here, but you're competing with foreclosures. So think about this. If they're at 100 and foreclosures are at 65 and they told you that there's $20,000 in repair, you, you're already at 45K. And that's based on what? You trying to just low ball them because you want to steal a deal? No, it's based on facts. They're competing with foreclosures. And you told me there's $20,000 in repair, you're already at 45 grand. So you see, there's a way to go about it. There's so many of you who are scared. If someone calls you with a great deal, you feel like you're going to get confused or feel bad that you're making a low offer. Remember, people are as motivated to sell as you are hungry. As you're hungry to lock it up and pass it off to an investor. Because if you lock this up at 45, the end investor has to do those repairs and that end investor wants to make money and there's going to be closing costs. Right? So at the end of the day, I just wanted. I can't teach you everything in a five minute blog, but I wanted to give you the confidence in knowing that, that no one gets mad at you for low offers if they're done right. I've never once trashed somebody's house. I've never gone to a house or even been on the phone and said, oh, you're in a horrible neighborhood. The house sounds like it's run down. That doesn't work. You're dealing with, in a lot of cases, somebody's home. You don't want to poke them. You want to just be open and transparent. I'm a buyer who needs to buy at a great deal. But let's run through the numbers. You're competing with foreclosures and you said it needed 20,000 in repairs. We're starting at 45,000. What do you owe on the house? Can you even go that low? What you owe on the house is a really good way to find out. They might say, I owe nothing. Well, then you know you got room. If they say they owe 90,000, you say, I'm sorry, I can't help you. You're going to have to go retail. All these little things just build up to the confidence that gets you in your first deal. I'm having a really crazy day today. I've been running around all day doing this blog for you, so if I seem a little antsy or angst up, I can get that way. And I don't drink coffee. So anyway, Dean Graziosi, thanks so much for watching this week's blog. Hope that all made sense in my speedy way to go through it. And I'll talk to you next week.