Re: Anyone doing Lease/Options? - Posted by Jim Kennedy - Houston, TX
Posted by Jim Kennedy - Houston, TX on July 09, 2002 at 01:27:30:
Scott,
“Should I have put the monthly amount in the ad?”
It depends upon your objective. If you only want to deal with buyers for the specific property you’re selling at the time, then, yes, put in the monthly amount. By doing so, you’ll significantly reduce the number of calls, but they’ll be more qualified for that specific property.
If, on the other hand, you’re trying to build a “buyer’s list”, then leave the monthly amount out. I generally don’t do this, because for most of the homes that I sell, buyers are a dime a dozen.
“How do you bring up the subject of option consideration?”
During the telephone interview, I will ask, “Mr. Prospect, how much were you thinking of putting down on your new house?” Frequently the prospective buyer will “dance around” the answer. The most common response is, “It depends.” or something along the lines of: ?Well, how much do you want down??
My response: ?Well, Mr. Prospect, what I do is try to tailor each situation to fit the needs of the buyer. I try to be as accommodating as possible to develop a plan that works for both of us. Obviously, the more money you can put in up front, the more flexible I can be in other areas. What range were you thinking of for your initial investment??
Once I have a figure from the prospect, I basically have three ways to go:
- If the figure is higher than I wanted, GREAT! My response (with a slight pause before answering and while restraining my enthusiasm): ?I think I can work with that.?
- If the figure is close to the amount I was looking for, same response, ?I’m pretty sure I can work with that.?
- If the figure is lower than what is acceptable, ?Mr. Prospect, is that the most you can afford up front??
By doing it this way, virtually every prospect ends up with different figures based upon THEIR needs and capabilities. Last year I had a house that I was selling for $168K and I was looking for anywhere between 3% to 7% up front on a lease/option. A prospect came along and when we got to the question of the up front $$, I asked my standard question, "How much were you thinking of putting down on your new home?? Keep in mind, my minimum requirement was $5K, I expected somewhere around $8,500 and I’d have been thrilled with $12K (3%, 5%, and 7% respectively). When she said, “Would $20K be enough?”, I really had to restrain myself from jumping up excitedly and shouting for joy. Instead, I very calmly replied, “Yes, I’m sure I can make that work.” Her $20K represented almost 12% up front non-refundable option consideration. If I had quoted her a figure of 5%, I’d have left over $11K on the table.
“Do YOU name a figure first?”
NEVER!!! Every once in a while, I get a caller who knows how to play the game fairly well. They’ll be as evasive as an Enron executive about answering the question. We’ll go back and forth three or four or five or six times. Finally, it’ll come down to them asking something like, “What’s the least amount of down payment you’ll take?” At that point, I’ll put a smile on my face and a slight chuckle in my voice and say “All ya got!!” This generally breaks the tension and then I’ll explain again how I can structure a deal that best fits their needs if I know what kind of up-front money we have to work with.
Hope this helps.
Best of Success!!
Jim Kennedy,
Houston, TX