How To Entice Absentee Owner To Sell?
I found a vacant property in a decent neighborhood. It was a rental and needs mostly cosmetics. It is smaller than most of the houses on the block but on the same size lot. Looks like some squatter have dragged some mattresses along side the house under an awning.
I contacted the owner who now resides in another state. He said he was thinking of selling so he can buy a rental where he now lives, but that he has not given it much thought. He threw out a price that is about 40% over market value in it's as-is condition but which would be about right once the cosmetics have been done. I've talked to him several times and seem to get a polite brush off - don't have time right now, etc.
Any one have ideas of how to approach this or what to say to entice or encourage him to think about selling now? I don't want him going to a realtor to put it up for sale when I can get him probably close to the same as it would take for him to pay commission and fix it up.
BTW: I believe it is owned free and clear.
I had somewhat of a similar situation, homeowner out of state, house was in total disrepair, and the owner did not want to part with this shack.
After several attempts to talk him into selling, I decided to take pictures of the house to show him the sad condition it was in. I explained to him that I lived in the neighborhood that had this eyesore of a house was bringing other property values down.
Finally, after about eight months of talking, he decided he would sell it to me. Of course this was after he was to "have a realtor friend of his verify the value".
So, my advise to you would be to take a picture from the worst angle you could possibly find and send it to the owner. Explain that the people in the neighborhood refer to the house as "Oh, that's Mr. Smth's house" using whatever the owner's name is. That should get a response. Good Luck!
Offer cash. From what I've been reading it seems to be the best way to get people to pick up the phone and call you.
So along with the pictures include a note saying "I will buy your house for $X cash"
He'll probably call you this time
I like that technique Worf...infact you just won my "today's lesson of the day" award, lol, doesn't mean too much except that I print out this post.
I'll have to try this one. There is a vacant house in my city I got the owners address from the tax collectors office website, then had to use find a free way to find a phone number, reverse look-up type website. Finally I found him, I gave him a call, asked if he was the owner, and I asked what he was planning to do with the house, and before I knew it, he said "It's not for sale".
The house is in a neighborhood with a lot of old properties, close to downtown, not a run down neighborhood, but it's not the upscale side of town, but it's a house that I see a deal in (if I can convince him to sell).
So I just might try this technique...and of course I will offer "CASH"
Thanks Guys
JB
[addsig]
You do not have a motivated seller if he is asking 40% over FMV or ARV.
As has been suggested send pictures to the owner showing its present condition and he may become motivated.
I agree with Steeler19 - make him a cash offer in writing, fast close. Money talks, Cash is King......all that stuff. If he still goes on about the inflated price, move on. He may come back at some point if he changes his mind especially if it is in writing.
Good luck,
Noel
[addsig]
Here's another method I have used when the owner is unrealistic about value. Print out a bunch of comps and mail them to the owner. Of course only include the conservative ones. Tell them it looks like homeless people are getting into it. Send them a cash offer as option #1 and a lease option as option #2. If you have capital to perform rehab on your own you will lower costs and can effectively offer a little more. I have even sent a letter explaining all my costs (inflated of course) and how I arrived at both options. I may even offer an equity split for a resale over a certain price. Lets say the owner thinks it would sell for 90K and you are trying to convince him it will onlt sell for 75K. As a way of getting past that gap say OK if after rehab my agent can supply me with a market analysis saying we can sell at 90K we will put it on the market for that much. If after 14 days there are no offers we will start reducing the price as we see fit. If we sell it above 75K we split anything above that.
The one best thing about negotiating with an owner of a vacant home is most times your the only one talking to them and you can attempt many things to sway them to see things in your light. Just keep after them and if they don't first accept find out why not and key in on that and solve their issue.
The place is vacant!!!! If you can find a way to reach an agreement why wouldn't they sell. It just sometimes takes some work to bring them into reality
Thanks
TBarber
Great ideas from everyone!. I agree that the seller is not motivated...yet. I will do the photos. Already have put together comps and rehab costs. Also, I will stay in touch with him so if it takes him 6-8 months to "get ready" to sell, he will still think of me at that time. Offering CASH is a great incentive and I will have to consider that option too. And the equity split, as a last resort, I like that idea. Thanks for giving me a lot of ideas to try to structure this deal.
Tbarber, you said this:
"The one best thing about negotiating with an owner of a vacant home is most times your the only one talking to them and you can attempt many things to sway them to see things in your light. Just keep after them and if they don't first accept find out why not and key in on that and solve their issue."
EXACTLY. More dialog.
Thanks, everyone!
Send him a cash offer with some comps to justify your offer. I am sure there are some fixer-upper comps you could send.
Then follow-up with him every couple weeks. Dont get tunnel visioned on just this one deal. Keep looking.
Best Riches,
Jeffrey Adam
[addsig]
After you have spent some time courting this guy to no avail its time to turn up the heat. Call your local building department and start compaining about the homeless guy and the code violations and you're worried somebody's going to torch the place. They'll slap a code enforcment case on the out-of-town owner. This may help his motivation. But make sure you've talked to him enough that he'll remember you and not his buddy the realtor.