Originally For JohnMichael In The Bird Dog Beiginner Section...

Comments(2)

• 
  JohnMichael29th December, 2004

  Dealing with FSBO's has been one of the best training tools that I use with my students in teaching evaluation of a motivated seller and negation.
  
  Now I am not saying it is the best market to focus on but it is a market never the less.
  
  I have placed FSBO's in to categories:
  
  A savvy seller
  
  Or
  
  Some one who think they know what they are doing!
  
  What I like about FSBO's is no 3rd party to deal with! "NO REALTOR".
  
  We all know that buying a house with equity is what it's all about for us as investors and one way is to buy "for sale by owner" from a seller who is willing to comes down on the price because his overhead is less. This is an obvious with FSBO as there is no realtor fee.
  
  Let's say the house is selling for $100,000. And realtor commissions run an average of 6% or $6,000. The seller simply needs $6,000 less for the property to avoid having to list it. Up front you save $6,000 but with a mortgage loan you would save over $12,000 over the long term.
  
  I like to focus on empty homes and out of town owners, as it seems they have a greater motivation to sell.
  
  Most make grave errors when making an offer to FSBO's because they to get every small advantage they can; having the seller fix a whole list of small items, a bigger tax pro-rated credit, etc.
  
  Balance your deal/offer with your desire to get accepted! If repairs are required under the terms of your contract offer to due them on behalf of the owner this will simply put you in a positive light before your customer.
  
  I use a script when I phone them as follows:
  
  Hello, The purpose of my call is to arrange a meeting with you to discuss how I believe your property – which I have driven by on numerous occasions – is ideally suited for me.
  
  And I would love to see what it look like inside and make an offer to you. What would be a good time to meet with you?
  
  Truthfully, A family crisis is the only motivation that will cause a seller to make a quick discounted deal!
  
  Find Their Pain
  If possible try and find out the answer to why they are selling. It will give you insight as to what he is or is not willing to take. Although this sounds obvious, sometimes the reason "why" may not lead to the sales price you would expect.
  
  Look for key words in their add or in your conversation as to their pain "Motivation". However, when you see a real estate ad that mentions "divorce," "motivated seller," "relocation," or something to that affect, beware. Although the facts may be true, that does not necessarily mean the seller is motivated to make a quick and costly sale. Most likely, the ad is more designed to generate phone calls and leads rather than sell the home.
  
  I take word "clues" and prioritized in an order that to me indicates the biggest "don't
  wanter". For example, MUST SELL is very common and doesn't mean a whole lot
  unless another clue pops up along with it, but DESPERATE or FORECLOSURE means
  some real good potential to buy a property.
  
  This is just a small portion of the FSBO area of investing.
  [addsig]

• 
  frank_pat29th December, 2004

  excellent info johnM
  
  i will take and go after what you have shared and see what kind of results we can expect.
  
  take care