14 Tips For Choosing The Right Real Estate Agent For Your

The whole process is enhanced by a good real estate agent who knows the ins and outs of the market. But with so many brokerages and agents out there to choose from, finding a perfect fit may be more of a challenge than you expected. Working with a top agent who is experienced and trustworthy can go a long way in

I have found a block of land that I want to buy, but it is not for sale. How should I go about wording a letter that entices a positive response?

I have found a block of land that I want to buy, but it is not for sale. How should I go about wording a letter that entices a positive response?

Disclaimer: I’m not a lawyer, so this isn’t legal advice.

Gordon and Mark provided some interesting answers . . . with which I absolutely disagree.

First: Never, ever, ever, ever give a check directly to the seller for any amount. Send it to your lawyer or settlement company. You can make a copy of it (if you’re doing a physical check, rather than a wire transfer) and include it in the letter you send to the seller. But that language in the letter is not going to protect you if the seller simply wants to cash your check. I could go on for several more paragraphs on why sending money directly to the seller is a horrible idea. But, look: Ask your real estate lawyer.

Second, it helps to determine what the owner’s motivation might be to sell. You might not hit it exactly, but the closer you come, the more effective your communication will be. As an investor, I come across people who have many different motivations for selling. However, that means there are many different ways I can structure an offer that works best for them. Remember: It’s price and terms.

Here’s just a quick example. Assume the house, if listed, might sell for $400,000 after 90 days on market. Fixed up, it would sell for $550,000, but it needs $70,000 in repairs. Let’s look at the offer based on the motivation.

Motivation: Wants to sell quickly for whatever he/she can get. One solution: An all-cash offer with a quick (14 day or less) close. Offer $300,000.

Motivation: Wants to sell for $450,000. Won’t budge on price. One solution: Owner financing: $1,250 a month for 30 years.

Motivation: Wants to sell for $700,000. Won’t budge on price. One solution: Owner financing: $1,945 a month for 30 years.

Motivation: House hasn’t been lived in for 2 years, and there’s mold throughout the basement. One solution: Offer $300,000 cash. (Mold is just another repair.)

Motivation: Tenants haven’t paid rent in more than a year (and you’re in a jurisdiction that isn’t too tenant-friendly). Offer $300,000 cash if the house is delivered vacant. Or offer $290,000 cash contingent on you being able to remove the tenants. Then you either offer the tenants $10,000 or less to move and pay for the moving van. Or you hire a good eviction lawyer.

Motivation: Wants to pay for grandchild’s education, which is going to cost $50,000 a year for 4 years. One solution: Offer $100,000 cash up-front and $50,000 a year for 4 years.

Motivation: Wants to sell the house, but is looking for a good return on investment. The 1% (or less) that banks are paying isn’t enough. Offer $280,000, owner financing, 30 year term, at 7%.

Motivation: A couple just got divorced. The court directed that the wife sell the house and divide the proceeds with her ex. She hates her ex; the divorce occurred because he cheated on her multiple times. She wants to stick it to her husband; financially, she’s doing OK. Offer her $200,000 cash.

Motivation [for a block of land]: a couple bought the land decades ago, planning to build a house on it. They never got around to it, and the husband died 5 years ago. The land itself isn’t costing her much except for the rather high annual real estate taxes. One solution: Offer 50% of the value of the land in cash.

Every seller has a different motivation. You can’t guess at them all, nor should you. You should make an attempt to find out what the seller’s motivation is. Then tailor your pitch and your offer to their specific motivation.

I’ve run into some of those situations above. I personally know investors who’ve run into them all.

You can’t cover all those situations in a single marketing piece or effort. However, if you choose your lists or neighborhoods properly, or you do the right sort of marketing, you can narrow you leads down substantially—to people who’ve inherited homes, to people with residential lots they never built on, for people who won’t budge on price (Tip: The MLS Expired Listings is a compiled list of overpriced properties), and so on. You target market; then you tailor your offer to the motivation.

Now: Back to the original question. (Sorry for the time it took to get here but, frankly, the information above is far, far more important than precisely what you say in the letter.) As I mentioned above, at least try to guess general areas of motivation. A good Realtor can help. But here are some tips:

If it’s in a residential area, with houses built 30–40 years ago, it’s likely the situation I described above. Someone bought the land, planned on building, and never got around to it. From there, check the tax records to try to confirm that. Was it bought 30–40 years ago? And there are other clues to look for, too . . . a bit too complicated to go into here.

I might write something like:

Dear Mrs. Smith:

The other day, I was driving through Centreville and I saw your lot at 123 Main Street. In fact, I happened to be looking for a lot near Centreville and yours seemed perfect. I understand that you’ve owned the lot for 40 years, so perhaps your original plans for the land have changed.

I’d love the opportunity to talk to you about your plans for the lot and whether you might consider selling it. I know Centreville is considering raising its real estate taxes, so it might make sense to sell before your taxes go up again. Centreville’s building inspectors also have gotten tougher on vacant lot inspections—making sure the grass is mowed, etc.

Please contact me at xxx-xxx-xxxx anytime—day or night, whenever is most convenient for you—so you can tell me more about what you’d like to do with your lot.

Yours truly

John Q. Investor

P.S. I’m not a real estate agent, so if you sold your lot to me you wouldn’t have to pay any real estate commission.

That’s just a very rough attempt, but the elements are there:

  • Not a hard sell
  • Guessing at a few possible motivations
  • Making the potential seller “feel the pain”
  • Adding the sweetener of no commission

 

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