Posted by chris on April 05, 2000 at 02:14:55:
With a number that exact it makes it look like you spent a lot of time calculating the price. This makes it less likely that you will be second guessed and counter offered.
-Chris
more on those FAQs for sellers, along with a success story - Posted by Matt B
Posted by Matt B on April 04, 2000 at 14:11:02:
I’m sure that by posting this, I’m probably setting myself up for another barrage of e-mails, but here we go.
I posted a few days ago about creating a Frequently Asked Questions list for sellers to help explain to them what a lease option was and how it benefited them. Well, I just signed 2 new lease options this weekend, thanks to that list. I had a seller who had to “let their attorney take a look at the contract” and was hesitant about going with the lease option, especially because I was asking them to pay $478 of the payment each month because it was too high. ($1,478 payment on a $132,000 house.)
Well, she e-mailed me earlier this week and asked if I could provide her with some references of people who I had done this with, because she was still a little unclear about how it would work. I e-mailed her back and told her I would make some calls to see if some of my sellers would allow me to give their number out, and in the meantime, she could read my frequently asked questions sheet. Well, she e-mailed me the next day, before I had even given her the references, and said they were ready to sign! The sheet had cleared up the questions they had.
By the way, I have also made it a policy to be completely 100% brutally honest with sellers, even if it means I lose the deal. The sellers said that it looked like they would only have to pay the $478 for about six months. I wrote them 3 paragraphs that I could not guarantee that my tenant/buyer would refinance in 6 months, and wanted them to be aware of that. I am also writing up the agreement for a 12 month term, renewable (at my option) for 3 more terms of 12 months. I told them that the possibilty existed that they would have to pay that $478 for 4 more years. It is really amazing how much people appreciate the fact that you are being completely honest with them. It really blows away any objections, because they realize that you obviously aren’t trying to hide anything from them.
The interesting thing is that the sheet has exactly what I tell sellers when I see them. I guess it’s because people tend to forget a lot of what you tell them, and because a lease option is a foreign concept to them, they are left with questions.
What I’m going to start doing is giving the sellers the sheet as soon as I pitch the lease option. I did that with the second deal that I got. As I explained the lease option to this seller, I pointed out each point on the sheet. It was the easiest deal I’ve ever done! It really is funny that all sellers ask the exact same questions. Always!
I also signed up an option this weekend on a $203,000 house. I’m optioning it for $188,273. (I love odd numbers. Another little trick I learned from this board.) The only problem was that I had to type out an explanation of what the option was and how it worked in an e-mail to the seller. Man, that was too much work! I think that I am going to work on creating an FAQ list for all types of deals to give to sellers. It seems to be working wonders.
By the way, before I get another thousand e-mails requesting the FAQ sheet, it is posted down further on the board. Not to be rude, but you can copy it from there. I’m still happy to answer individual e-mails, though.
Hey, Matt! - Posted by J.P. Vaughan
Posted by J.P. Vaughan on April 04, 2000 at 22:52:50:
Congratulations on your deals! Is it okay if I put your
FAQ on the Money-Making Ideas page? That way, everyone
can see it. Thanks.
Why do Odd Numbers work? - Posted by messerb
Posted by messerb on April 04, 2000 at 22:39:43:
Matt,
You mentioned that you are optioning a home for $188,273. What’s the insight on the use of odd numbers?
Thanks for sharing your FAQ!!
Monique
Re: more on those FAQs for sellers, along with a success story - Posted by Dewey (NJ)
Posted by Dewey (NJ) on April 04, 2000 at 17:15:59:
Matt I think that is a great idea and a good letter. However, are you at all concened that some of your comments in the FAQ sheet may be perceived as activities that require a real estate license?
When you say “we are selling your house” or “we don’t just work for commissions” as well as indicating you will handle all marketing, advertising, screening and showings I believe you are sounding very much like a Realtor.
Just my 2 cents. Be careful and good luck.
Dewey
Thanks Matt - Posted by Dan_nc
Posted by Dan_nc on April 04, 2000 at 16:23:26:
I grabbed that FAQ post as soon as I saw it! I think it will be very helpful. Going to pitch a L/O deal tomorrow afternoon & will take it with me. Are you going to post the Option FAQ you came up with? Maybe an “Owner finance FAQ” will be your next offering?
Thanks for sharing with us, Dan
Already gone from this page… here is the URL. - Posted by Brandi_TX
Posted by Brandi_TX on April 04, 2000 at 16:04:55:
This is the FAQ that Matt posted a few days back.
FAQ flyer. Sign of the times. - Posted by Brian Mac
Posted by Brian Mac on April 04, 2000 at 14:38:30:
Matt
This such a great idea being borrowed from the internet. Here’s another example:
A small local restaurant I frequent started one of those “Frequent Diner Card” programs offering discounts, free meal on your birthday, etc. Apparently they were constantly being asked the same questions from patrons as to how it worked, what they were entitled to, etc, that the restaurant recently created an FAQ flyer regarding the card.
Thanks for sharing
Brian Mac
Re: Hey, Matt! - Posted by Matt B
Posted by Matt B on April 05, 2000 at 08:00:10:
Absolutely fine with me.
Re: Why do Odd Numbers work? - Posted by Rafael_FL
Posted by Rafael_FL on April 06, 2000 at 17:45:27:
Odd numbers such as those described (9893) in the event of most sales such as automobile sales give the impression that a number has really been thought out and worked. A common technique used in auto sales is after negotiating back and forth, you will get a number such as $9432.16. Man, they worked that deal to the penny…no more room left. Also, it is not always how much you give, but how many times. For example, you might give up 10k first go around. A better technique might be to give up 2 or 3k, then succeedingly smaller increments. After a few rounds of negotiations you may have given up 5-7k, and saved a few for yourself.
Rafael
Re: Car Dealers… - Posted by chris
Posted by chris on April 05, 2000 at 13:02:54:
Monique-
I’m sure there are some psychological(?) studies of pricing that have been done. Look at most car dealers,etc.-the price shown is always something $–,995 instead of an even $–,000.
I guess something trips in a person’s mind that makes them feel a sticker price of $19,995 is a deal, but if they saw $20,000 they would not bite.
Experiment with this yourself next time you sell a property. Place an ad for(example) a sale price of $100,000 and it just looks like a plucked from air figure. Now, place an ad for $99,871 and see the difference in responses. I would say $99,995 but that just seems too obvious to anyone and may bring back a flashback of a bad experience at a car dealer in the past;-}
-Chris
Re: Why do Odd Numbers work? - Posted by Stacy (AZ)
Posted by Stacy (AZ) on April 05, 2000 at 02:16:25:
The way I learned it, odd numbers give the impression that you’ve worked the numbers to great detail, and have a good reason to ask for that particular amount. So, if I set a sales price at $129,000, it probably appears that I have just come-up with that number without much thought. But $128,872 looks as if I have analyzed the heck out of it, and know the value of the property.
I have no proof that this is true, however, in any of my deals.
Stacy