Is Pricing Range On Offer Letters A Hit Or Miss?

Hey, it's Mark Podolski, the land geek with your favorite niche real estate website, thelandgeek.com and on this week's roundtable, we've got all the usual suspects. We've got the technician, Eric Peterson. Eric, how are you? I'm good.

I'm so happy everyone's here today.

I am too. I am too. I missed last week when I heard Terea knocked it out of the park to the point that she may become the new host of the roundtable podcasts.

And everyone has just unsubscribed. Unsubscribe.

Not at all. I think we just raised our subscribership. In fact, that should be something that just go ahead and post in the Facebook group, the my networks group, and just leave a comment. Terea. But while we're talking to Trea, Teria Harris. Trea putting in the ramsaries. How are you?

I'm well. How are you?

I'm great. I'm great. Good to see you. We got the master breathing in the mailing, breathing out, the marketing, Mike Zano. How are you, Mike?

Doing really great. Thank you for asking. I hope you're doing well as well.

I am, I am. Then we got dude Buddy, the nightcap OG Scott Bossman. Scott, how are you?

Great, Mark.

Good to be here.

Good. Good to see you. I love it when you call me big Papa. Tate. Litchfield Tate. How are things?

We're good. Really busy.

Great, great. And last but not least, the brain, the professor, your flight school Sherpa. Scott. Todd. Scott todd.net landmodo.com learn anything about anything investor ninjas.com Scott. Todd, how are you?

I'm feeling a little weird here that we're doing this in the normal order as opposed to the opposite order, but sounds good to me.

That's right. How did everybody like that last podcast Roundtable where we went? We did the opposite. It was very Seinfeldian. I thought it was a great idea. But when we looked back on the time, like, people were like, it was only 16 minutes. We kind of just sped through from backwards. It did not feel 16 minutes when we were doing it at all. So we might want to beat that record on this podcast because we have an interesting topic, but I don't know how long we can go on it. But, Scott Bossman, what's our topic for today?

Well, something we are all seeing a little bit more of is offers in the mail for our properties that we own. And instead of there being a singular dollar amount, there's a dollar range on the offer. So we just got an offer today on a property we own.

And the.

Dollar range on the offer was quite substantial. $5100 to $8100 on this particular property. So thought that might be something we could talk about.

I think that's interesting because now we were talking a little bit before. One of my favorite Dennis Miller lines is that actor has the range of a Daisy air rifle. So we got acting range, we got singing range, and now we've got pricing range. So I, I know he loves to start, so let's start with the Zen master. Anyway.

So I don't know how I feel about that. Part of me I have. I'll give you my immediate reactions. One is maybe they're just not good at doing the pricing matrix maybe, and they're just throwing out a range because they're unsure about, you know, how they did that.

That could be it.

I don't know. The other thing is, I feel like it's like a neutral letter. Like you're going to get. You send out a neutral letter with no offer amount, you're going to get a large amount of people responding, but you're still going to dial them in and then you're going to reduce it down so it's more work. Right. So I, I don't know, I would imagine that everybody's looking at that 8,000 number. And so now you're going to have to beat them down to the 5,000 number. Just not a game I'd want to play. I may not. I might be missing something here, but that's my initial thoughts.

I like it, but I'd love to hear what your cohort, the nightcap cohort, your partner in crime, the bromance of bromances on late night YouTube TV Scott Bossman thinks.

I had, I had similar thoughts as well. And I thought, you know, not only is it going to. Not only is this going to create a lot of work, but are you going to end up overpaying for this property? You know, that's a substantial amount. I mean, $3,000 we're looking at, you know, even if your bottom offer is 25 cents on the dollar, that top offer is significantly high, maybe closer to a wholesale number. So are you going to overpay and is that going to skew the market a little bit if we get a lot of people doing this?

Yeah. I mean, really interesting thought, but I'd love to know what the technician, Eric Peterson, thinks about this range issue.

I hate it.

I think it's a terrible idea.

Don't mince your words. No, seriously, what do you really think?

So Scott mentioned this today, and I happen to have two of those very same offers sitting in front of me. Mine offer an even larger range of basically 100% swing. And the other thing that I commonly see in these offers is they don't typically make an offer for like, the land as it is. In other words, if it's five acres, they don't make you an offer for the five acres. Instead, they say this range per acre. So now as. As the owner of the land, first of all, I gotta remember how big my property is.

Okay?

Then I gotta get out the calculator and do the math to determine, oh, what could I get for my property. And then after all that work, now I know what they're offering me. And, and I just, I think you're making the seller doing an awful lot of unnecessary work. If you want to offer a range, why not just put the real dollar amount on there? In this example, I was offered $125 to $240 an acre. So that's a range of 5,000 to $9,600 for this particular property. I mean, why not just offer me 5,000 to $9,600? Why do you have to say per acre? But I think ultimately the bigger problem, you know, besides asking the seller to do work, is that, you know, I mean, like Scott said, your. Your range is going to put you so that you're potentially purchasing retail or direct at a wholesale type value. And is that really what you should be doing? If you're mailing offers, you need to be buying closer to that quarter of its value, not half of its value. So I don't like it at all. I'm out.

Okay, so Eric Peterson wipes his hands of it like a. Like a blackjack dealer. He's out. Very Shark Tankish passion for me.

No.

Must be one of those days. I don't know. Yeah, I don't want to go next.

I'm glad I don't go next.

Eric, did you drink coffee today?

No coffee today.

No coffee.

The question is, how much did you drink today? Oh, yeah, Dinah, geez. It's just a question, Eric. Make it easy on the listeners.

Let me find the topic that sets them off.

There it is. Wow. I think we got next week's topic too.

Yeah, what's that?

But Teria putting in the reps. Harris, are you as passionate about Eric Peterson on this whole range business?

No, I'm not actually, because I've sent out an offer with the range, not $1,000 swing, but so normally we'll stagger our offer prices between 2 or $300. You'll see a difference. So we sent out a trial of just a range within that 3, $400 range. Nothing we were. We weren't comfortable going up and purchasing, and nothing that would take us outside of the yields we were trying to get with the property. And we let our intake manager know, like, hey, you know, we're going to try this, you know, so you may get, you know, people asking, and here's what we would qualify for that higher price. And here's what. We would not qualify at that higher price. And it was really in a county where we weren't as familiar. We were relatively new to the county. We weren't really sure we were playing around with different offers. And we thought instead of sending out 100 at this price and 100 at this price and 100 at THIS price, we would kind of encapsulate a range. And it actually worked out decently for us. We don't do that all the time. Just when we're uncertain in a new area.

So you're uncertain in a new area. And then. And it does work. Okay, but it's a tighter range.

Yeah. Yeah. I don't. I don't think $1,000 swing that. That will put us outside of our. Our margins that we're trying to buy within and sell within. So we couldn't do that wide range. Neither did we offer per acre, Eric. So maybe that is a little better. But it was just a range.

Sort of like the Sylvester Stallone acting range. Very tight.

Ouch.

Well, I mean, anyone who's sorry. I mean, I'm not sorry.

He's.

He's great.

I just unsubscribed.

Look, if you're. If you're a Rocky fan or a Rambo fan or any kind of, fan of, you know, guns and violence, you know, what you're getting with a slice of o movie. It's a range. It's a tight, tight range. Right. And we like it. Right. I don't want to see Will Ferrell shooting up people. What does he slice the loan doing it anyways? So it's a tight range. Big Papa Tay, Litchfield. What do you think about this range business?

I don't know. I'm not into it. I'm not feeling it. I just feel like if I went to somebody and said, hey, would you like $5 or $10? They're always going to ask for $10, right? Like always. So why even offer $10 when I really want to be buying at 5. Now, if you come to somebody and say, hey, we're going to offer you between five and six dollars, okay, fine, there's enough room. So I think the range could work. Personally, I'm not doing it. I'm not playing that game. I know how to run. I know how to create a really good pricing matrix, and I have confidence in my ability to do that. I have confidence in my team's ability to do that. So this range business isn't for me. Too much work.

Too much work. Scott Todd.

All right, Mark. I would just say, like, I'm not a fan of it. Like, I don't harbor anxiety or hatred. Like, Eric dies towards it. You know, like, I see it and I'm not, like, shooting at it or I'm not throwing down my rib that I'm eating. And, like, you know, that's it. That's it. We're fighting words. I'm not doing any of that. What I am doing, though, is I'm looking at going, why? And I think that it's a lot like what Tate was just saying is, you know, like, on my offer letter and on the default offer letter in LG Pass, it says, like, consider my counter offer. And what I have found is that if you offer something, even if it's okay, so if you offer something and they don't want to sell, then they're going to throw it away. But if you offer something that they might want to sell, then they may respond to you either at your accepted offer price or send you the counter back. Now all of a sudden, it comes back to my court. Right. You know, because like Tate said, I'm not.

Or.

Yeah, it takes that if I offered them $10 or $5, they're going to take the $10 every single time. Now we're negotiating and the powers back in my court, as opposed to me being in a weakened component that, oh, you said you would pay up to $10 for this property. Well, yeah, but, you know, now I'm on the defensive versus me being in the. In control of it. What I think happens is, I think what it comes down to is I do like the ranging. I mean, I like to go like, on this offer, let's say 200, next offer, 300, next offer, 500. I might have that range, but I'm never going to let the sellers know what that range is. I'm just going to, like, seed the market to see which one fits or works. But here's what I think happens. What I think happens is that sometimes land investors, they, they're looking at their response rate. And right now, because we've only seen this when the market's gone crazy, right now they're not getting the response rate. But I think everybody forgets this one thing. And that's what we teach at boot camp. We teach it in flight school, we teach it everywhere there is an acceptable response rate, right? You know, like you should be getting 3 to 5% response rate on your offers. Now remember, that's after six to eight weeks, somewhere in that range. And if you look six to eight weeks later on whatever you mailed six to eight weeks ago, not on your, all your mailings, but on what you mailed in that specific timeframe and you look at it, you go, well, I only had 1%. Well, that's telling you that the market is telling you that the offer is too low. So now moving forward, maybe the next week, you start to ramp it up again, right? Like I'm not telling you, go to a hundred percent, tweak it up a little bit, right? Like it's, it's a test. And the thing is, is that if you, if you're looking at this from the long term perspective, like, you know what, if I get it wrong on this mailing, I'm going to try them again in 90 days or 100 days, I'm going to try to remail those people again. You'll learn from what the market is bearing right then and there. So instead of working this range that puts yourself at a disadvantage, just be very strategic in your approach and chisel away at it. And remember, you're trying to keep your response rate in that 3 to 5% response rate. If you're not getting it, the market is telling you something. What's the market telling you? They don't like your price. Now if it's above 5%, they love your price and you should tweak it back down again.

I really love what everyone had to say, especially Eric. But if we go back to the Sly Stallone metaphor of having a tight range, right? I mean, think about it. Has anyone seen the movie Rhinestone where he goes outside his range? You know why you haven't seen that movie? It's one of the worst movies in history because Sylvester Stallone's paired up with Dolly Parton and he's, this is no joke. HE sings COUNTRY MUSIC it is an unwatchable movie and for the sellers, it is an unwatchable train wreck to get a range to Eric's Point, you're making it hard on the seller. Number one, you're making it hard on yourself. Number two, you don't want to be in the negotiating business. To Scott's, Todd's point, we have a metric 3% to 5% response rate, but you don't want to put much more. Sort of you want to tax your seller. You don't want to tax yourself playing games with a range on your offer letter. Because if I offer you a range and then I'm coming down to the low end of that range, I've lost all that goodwill, essentially. Especially if you own multiple properties, you kind of know what you're getting. With me, you think it's a gimmick. And me as the buyer, obviously, I want the lowest price possible. So why not just come in either to Taria's method, It's a new area, a very tight range that might up the response rate. Or just do what we do and give an offer and then see what your metrics come back at, and then raise them, which you can automate in LGPass, or lower them, which you can automate in LGPass or have your intake manager renegotiate if it's over 5%. Either way, it's a more efficient way of doing business because at the end of the day, we can always make more money. We can't get more time, which is the whole idea of this model in the first place. I don't know. I don't feel like I'm at the Eric Peterson end of. Of this whole range thing, but I'm certainly not Taria's end either. I think I'm squarely middle. Middle range, mid range. I think we've got an episode title up on the range.

How about Home on the Range?

Home on. That's what I mean. Home on the range. There.

I hate your range.

Open.

Open range.

Open range.

That movie. That's a great movie.

Who's an open range?

Is Stallone in there?

No, Stallone's not in it, but Kevin Costner is.

That's over the top.

Yeah.

Okay. Yeah, over and over the top. I. You know, how many times as a kid did you put your. Put your hat down backwards and get that extra power. Take someone down. I know I did. That's what I think you should do is get a hat like a trucker hat. Turn on backwards and make some offers, direct offers.

What is a trucker?

A trucker hat. It's like it says the name of the truck. What's the hat? You can see it on his thing.

Like Ford or trucker hat.

I don't know.

I mean, is Eric wearing a trucker hat?

No, he's got a camouflage hat on.

He's not wearing anything. Scott.

I don't know what a trucker hat is.

All right. There's like. Usually they.

They have like fabric in the front. They're very like. Well, when they're new, they're very square.

And then.

Yeah, they have mesh in the back.

This is it. Here is mesh.

There it is.

There's a trucker hat.

Okay. If you're not. If you're not.

And they're tall.

Video. Scott Bossman is putting a trucker hat on. It's fabric in the front, mesh in the back. And then when he turns it, his bicep gets really big.

Weird. Truckers wear those.

Well, I don't know. I'm not. I'm not in the trucker culture. I'm just saying from over the top, all the truckers had hats on. All look the same.

Okay, all right, all right.

Look.

I didn't know there was a truck.

Kenworth, you know.

Okay.

All right, Ken. There it is. Thank you. Kenilworth. The Kenilworth hat. There it is.

Kenilworth. I don't think that's it.

No. Kenworth.

God, we're terrible truckers. Peterbilt.

Peterbilt.

Yeah.

Peterbilt in the worst.

Kent. Kenworth. Peterbilt hat. That's what I meant. For those of you long range truckers that are listening.

We appreciate you keeping America going.

Yeah, we really do. And apologize because we don't mean any disrespect. If you're taking it that way. It's. It's the over the top movie. They know what I'm talking about. Anyways, enough of these shenanigans. Let's get to Taria and her tip of the week. But before we do so, I do think it's important that we talk about flight school. Learn in the next 16 weeks can literally transform your life. Start building up that passive income quickly, safely, efficiently. With Scott Todd as your flight school Sherpa. He's going to take you up there. Very well. And to the point that that flight school tuition guaranteed. You're going to make it back. It ain't going to cost you nothing. 180 days or less. Learn more. Go to thelandgeek.com training. Get on a call with the Zen master with a nightcap. OG See if this business is right for you. All right. Putting in the reps. Harris, what is your tip of the Week.

My tip of the week is actually a quote that my son and I talked about this last week. So this quote says, no matter how many mistakes you make or how slow you progress, you are still way ahead of everyone who isn't trying. And that is from Mr. Tony Robbins. So I know last week we had a long conversation about making things complicated and overdoing it. And it's okay to start your business. And it may not seem like it's going very fast at first, and you may not seem like everything is set up the way the coaches are all set up, but as long as you have momentum and you're doing something, you're doing better than everyone else.

I love that quote, Mike.

I love it.

I love it as well. I love a good quote.

Does Scott Todd. Scott Todd, did you like my quote?

Well, I will tell you that it beats Chris AI. Oh, no, thank you.

I will take that as a compliment or progress. Exactly.

I love it. Yeah. Another little fun tip is for those of you who are watching Netflix these days, I have been watching very little TV the last few months. Very, very little. But from when I was watching Netflix, there was a show called Money Heist. It's set in Spain and it's great. And now it just came out with their fifth season. And ever since watching Money Heist, I have been speaking in a Catalan accent.

Catalonian.

Catalonian. Anyways, I have been lifting because instead of saying Barcelona, let's say Barcelona.

Barcelona.

And they do it all throughout Money Heist. And I love it. It's really well done. Babylonian, is it Cat? It's Catalan. I looked it up. The king at that time was from this area, and he spoke with a lisp. And so the king, they just wanted the king's speech. Right. So Barcelona. Anyways, I thought I would just mention it. There's nothing better than an awkward silence on the podcast. A lot of people don't embrace it. I do. I mean, you can see the jealousy in Scott Todd's face, like, right?

Jealousy.

Yeah, that's jealousy.

It's hard to come up with some type of statement where no one wants to speak anymore.

That does take talent.

You know, Mark did it again, like, you know, twice in a row. Lightning does strike twice. There you go.

Well, I want to thank the listeners and remind them the only way that we're going to continue with awkward silences is if you do a favors. Three little favors. Follow the podcast. Rate review. Don't rate this one, but rate other past ones. Review the podcast, Send us a screenshot of the Review. To support the landgeek.com I'm going to send you a signed copy of Dirt Rich. And because it's in written form and not oral form, although you can't get the audiobook, but that one I can't obviously sign. There will be no awkward silences while reading Dirt Rich, so. And it really helps us, so please do it. Tree. Harris. Are we good? All good magazine. Are we good? Yes, yes. Very good. Eric Peterson, the technician. Absolutely. Anything else you feel like ranting about? Not at the moment. Scott Bossman. We good?

We're great.

Tate?

Yep. All good.

We good? We're good.

Mark.

All right, let's do this. One, two, three. Let freedom bring. Not bad. Not bad. All right, well, I guess I've offended people with a Catalan accent. And truckers.

And truckers.

And sliced alone. Sliced alone. I think. I think I'm gonna quit while I'm ahead.

Are you ahead?

There's more damage we can do. Don't worry.

Well, that's next week. Stay tuned for next week's episode of, you know, I don't even know.

Well, we made it longer than 16 minutes, that's for sure.

That's good. And that's really what we wanted to do. Yeah, we wanted a 17 plus minute podcast. Kaizen.

We got this, man.

Continuous improvement.

There's tips are improving, the time's improving. All good.

Now that I know you love quotes.

Oh, boy, oh, boy. Listen, I drove Mike Zaino.

I'm so happy.

I drove Mike Zano off of quotes, and he got to the point where he had to ask me to, like, hide my camera.

Yeah.

Because he couldn't deliver the quote looking at me.

Could not. Very true.

True statement.

Notice I won't fill the air. The silence.

Todd just pulled off that silence. How do you guys do this?

I was able to do it with my kids the other day. Really, really good, too, because I hit them with, like, the probably the worst, best dad joke ever. And it basically goes like this. Hey, you guys know who I saw today? And they're like, no, who? I'm like, everybody.

Like that. Oh, boy.

Wow.

There was. There was silence in my house. And everybody went to their rooms and pondered that wisdom.

Is that what they did? They pondered?

That's what I'm telling myself, at least. Right? And that's what Mark's telling himself. Like, I delivered some wisdom. And everybody was quiet.

Yeah, yeah. Absorption, Absorption, absorption. All right, well, thanks, everybody. See everyone next week.

Yeah.

See ya.

Thanks for listening to the Art of Passive Income podcast. Start your journey at www.thelandgate.com and www.scotttod.net. read and review the podcast and email Support support@thelandgeek.com your screenshot for a free passive income launch kit.