Sellers dragging their feet on my L/O proposals - Posted by RS

Real Estate Investing
1

Posted by JPiper on April 03, 1999 at 20:03:00:

Frank:

My main point is that persuasion doesn’t equal “hard sell”. We’re not selling vacuum cleaners here. We’re selling effective solutions to a seller’s problems, solutions that will result in a profit to us. We’re selling ideas. I’m not quite sure how you would “force” a seller to accept your solution. But to the extent that you can point out the benefits to the solution in an effective way, I think you should. Where you get the idea that this is “hard sell” is beyond me. I think it’s persuasion. If the seller doesn’t like the idea, and you have no others, then you walk?and he continues to market his property.

We don’t appear to be disagreeing regarding “weak stance”. Where we evidently part ways is that I don’t want to move in directions to create a weak stance?.I’d rather move in ways that either create a strong stance, or take the actions that will lead to a strong stance. I would rather try to “convince” the seller of the merits and benefits to him of my proposal, and failing that, walk away, as opposed to weakening my contract, my posture, spending time and money on a deal where I have agreed to a situation where I have very little control. I think newbies would be well advised to work on strenghtening, not pander to their weakness. But that’s just my opinion.

Either way, I don’t have a problem if that’s how you or others want to do your business. As you say, there are many ways to skin a cat. And if you’ll read back through the posts, you’ll note that I originally answered by saying to get it all in writing. I didn’t say not to do it with seller marketing. I only said that later when a subsequent poster came up with a problem concerning the solution that you suggested on seller marketing.

By the way, why don’t you come to the chat room anymore? As soon as we got the new and improved version you quit coming. What’s the deal?

JPiper

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Sellers dragging their feet on my L/O proposals - Posted by RS

Posted by RS on April 02, 1999 at 01:54:07:

The biggest problem I’m having with L/Os are sellers who want to wait"just a little longer" to commit to a L/O deal. They want to see if they can sell outright first. There must be a way of instilling a sense of urgency in them, you know, kind of like making an offer to purchase where they have to accept by a certain time, or lose the opportunity.Now in reality my offer’s not going anywhere. It will still be available two months from now if they haven’t sold. But I don’t want the seller to know this. Can you structure a L/O proposal like an offer to purchase? It seems this would force a decision much sooner.Thanks!

3

Use one of Joe K’s suggestions… - Posted by Frank [Pgh PA]

Posted by Frank [Pgh PA] on April 02, 1999 at 06:45:34:

while you’re stting down with them at the kitchen table working out the details of your L/O offer, tell them that they can still sell the property anytime before you find a qualified buyer and, if they do, the whole deal is off.
Then get out and market the he** out of it to beat them to the punch.

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Re: Use one of Joe K’s suggestions… - Posted by RS

Posted by RS on April 02, 1999 at 10:48:06:

Hey, that might be the solution I’ve been looking for: I can especially see this as viable if I have a substantial buyers list already going: the idea being that when I see a property, I’ll know if I can move it quickly or not. I guess in this scenario we’d just agree to all the terms, but not actually sign the papers until I find my T/B.

The other advantage I can see is that if I haven’t moved a property in a few weeks, well, hey, I’m not locked into the deal. If the property won’t move fast maybe I’m better off without it anyway. The costs of marketing pale in comparison to being stuck with a hard to move property or to the profits if I do find a good T/B. If I win, I win big. If I loose, I can live with it. Forgive me: I’m thinking outloud, but the more I think, the better I like it. Thanks a bunch!
RS

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Re: Use one of Joe K’s suggestions… - Posted by Bud Branstetter

Posted by Bud Branstetter on April 02, 1999 at 15:10:43:

Instead of the normal lease option, reverse the process and option with the ability to buy and lease.

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Don’t Do This… - Posted by JPiper

Posted by JPiper on April 02, 1999 at 11:41:09:

“I guess in this scenario we’d just agree to all the terms, but not actually sign the papers until I find my T/B.”

Don’t do what you’re suggesting. If you do this you have no contract, no formal agreement that the seller will do what he said he would do. You have no protection from your tenant/buyer going around you directly to the seller.

Put all of your terms in writing, have the seller accept, then go market it. If one of your terms is to allow the seller to continue to market, then put that in writing. DO NOT market without a written contract.

JPiper

7

…and it’s illegal? - Posted by Baltimore BirdDog

Posted by Baltimore BirdDog on April 06, 1999 at 12:19:41:

JPiper,

I’m pretty sure you need a license to market a house in which you don’t have equitable interest. Without a lease option contract, you wouldn’t have one. True or false? Thanks in advance for your dose of wisdom.

-Jeremy

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But what IF…??? - Posted by L.A.

Posted by L.A. on April 03, 1999 at 03:12:52:

But what if U allow…{in your contract}… the seller to keep on marketing & he has got his sign outside of the house…how do U protect yourself from your T/B from going around U ?
Let’s say, you BOTH have signs in front of the house?
What to do?

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Re: But what IF…??? - Posted by JPiper

Posted by JPiper on April 03, 1999 at 03:37:28:

I took this in the context of the original question which had to do with the seller wanting to continue to market for cash, while the optionee looked for a tenant/buyer. Obviously these are two separate types of transactions, and in one sense would make it seem that the seller is not looking for a tenant/buyer, but a cash buyer.

However, I agree with where I think you’re going with this. Your contract would have to define explicitly just exactly how the seller could market the house. Otherwise, the seller could just make a better deal with a tenant/buyer that you had drive by the house, thus deviating from his initial motive but improving upon his deal with you.

Between you and me, I think the technique of allowing a seller to continue to market is weak. Personally, I’ve never done this, and don’t expect to. I think this is one small step up from having no deal at all. When you’re sitting in front of the seller, and he hesitates, says he still wants to sell for cash?.he’s not sold on your proposal. Your choice is to overcome the objection and/or walk, or come up with this method of allowing the seller to continue to market. My choice would be the first method?.convince him or walk.

My feeling is that if the seller isn’t convinced by you, and you undertake the latter scenario, he may still balk when you have finally secured your tenant/buyer. And what’s your alternative then? A specific performance suit? I doubt that will pencil out for you.

But again, I was just trying to answer the question within it’s context. If you had a firm contract without the “seller marketing” type proviso, you have an enforceable contract and one that can protect by recording.

JPiper

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Re: But what IF…??? - Posted by Frank [Pgh PA]

Posted by Frank [Pgh PA] on April 03, 1999 at 07:21:50:

I too, understood the problem to be that owner wants cash but is not ruling out the L/O possibility and, yes, if you’re going to use this idea, you’d have to spell everything out in the agreement with the seller [don’t we do this on every offer?].
Is this technique “weak?” Yes, but what’s the alternative? “…one small step up from having no deal at all…” Hmmm…that word “small” is quite “subjective”, as opposed to “objective” in jhis context, isn’t it? For somebody who’s having problems getting a deal, I would say that a “small step” is better than “no step” at all.
In one of my former lives, I was a salesman. I have about as many books, courses, tapes on sales and closing techniques as I have on RE Investing. Now, in my present life, I have chosen not to try to “sell” or “convince” anybody what they “should” do. I find out as much as possible about what they need [not want], and then proceed to try to work something out that would satisfy their need and give me an opportunity to profit while doing it. If I can’t figure anything out for them, then I pass and go on to the next one. I consider myself to be a “problem-solver”, not a “salesman” or “convincer” because I, personally, hate it when anybody tries to “sell”/“convince” me that they know what’s best for me when all they’re thinking about is what they want.
Could somebody go “behind my back” and “steal” my deal? Yes…although it’s never happened to me. However, I don’t care how “tight” you write up an agreement, I could, if I wanted to, find some sharp “ambulance-chasing” lawyer who could find some loophole to get out of it [“members of the jury, as you can plainly see, the glove doesn’t fit”]. Same thing applies to a seller “balking” on a deal. There have even been cases where deals have been killed after everything has been signed, sealed and recorded. So, how do you protect against this happening? You don’t. You keep your word on your end of the bargain and hope that the seller will do the same. The chances of such a thing happening are much greater if you had to “hard sell”, or “convince” the other party to do what you want.
"…specific performance suit?'…No way, just get my money back [in a deal like this, that would be $10], and go on to the next one.

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Re: But what IF…??? - Posted by JPiper

Posted by JPiper on April 03, 1999 at 12:09:35:

Frank:

Sounds like we’re on opposite sides on this one.

One of the problems you seem to have with this is that you have linked the words “sell”, “convince”, “persuade” with “hard-sell”. As you say, you view yourself as a “problem solver”?.and evidently a “problem solver” does not need to “convince”. He merely needs to lay it out there and the other party is supposed to recognize the merits of it. You say in your post that you “hate” it when someone tries to “sell” you something?.which taken together with your other comments leads to a conclusion that your prior life as a salesman was quite unpleasant.

I doubt that I can “convince” you to the contrary?.so I won’t try. But I think we are all involved with persuasion in all aspects of our lives, every day. Persuasion, contrary to your view, is about determining the seller’s problem, and then solving it in a way that meets BOTH your needs AND his needs?as you have determined them. This can, and is often, contrary to what the seller WANTS. This often leads to “explaining” the benefits of what you are offering, showing the seller how your solution will fit his needs. This in my mind is persuasion?..the very thing you are against. To me, not taking the step to put your ideas out their in “convincing” and persuasive ways is a mistake?.and as we evidently both agree, is weak. I’m not going to spend my time or money marketing something that I don’t know for sure I have a deal on. To me I’d rather take that time looking for a deal I can make, than to HOPE the seller will come around to my way of thinking AFTER I have spent my time and money marketing HIS property. Even Realtors won’t do that?it’s called an open listing.

As to your other comments, we both agree that whatever you do should be put into writing, in detail. I think it would be more difficult to go around a contract with no contingency for seller marketing. And, I think it would be easier to enforce, if necessary. I expect to live up to the terms of my deal, and I also expect the seller to do the same. If he balks I’m going to take at least some initial steps to enforce my contract. But where seller marketing is permitted it’s going to be more difficult to define, and certainly more difficult to enforce.

The one point I find interesting is that these questions of “how do I keep the T/B from going around me” or “no one is accepting my deal” or “the realtor won’t let me show the house” all originate from having a weak stance to being with. To me, there is no benefit in showing someone how to work within that weakness. In mind my it’s better to deal from strength and “walk away” power. If you’re fearful of putting your ideas out their, persuading others that your ideas make sense, and then writing strong contracts that ARE enforceable, this business just got a lot tougher.

JPiper

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"Sounds like we’re on opposite sides "…not unusual… - Posted by Frank [Pgh PA]

Posted by Frank [Pgh PA] on April 03, 1999 at 18:11:27:

as a matter of fact, I don’t recall anytime over the past 2 or 3 years [my, how time flies when you’re having fun]that we’ve communicated, either by posts on the board or in the chat room, where you did agree with me…and that’s fine, because I believe that open discussion is the best route to learning and in this business, there are certainly a lot of different routes people can take and still be successful.
I’m sure you’re familiar with the old thing about the word “ASSUME”
“…conclusion that your prior life as a salesman was quite unpleasant…” This ASSUMPTION on your part is quite wrong!!! I remember hearing, a long time ago, that if what you’re doing is not both fun and proftable, you should change it…and, I follow that adage.
I also think that it’s very naive of you to again, ASSUME" that I don’t explain things to buyers or sellers when I’m in the process of trying to help them solve their problems. One thing I do do, is eliminate, as much as posiible, all the high-falutin’, legalese-sounding, RE, language and terms. i.e., In response to a recent post to a person who asked for help on explaining “Lease Option,” I suggested using “Rent to Own.” And, when I’m talking with a prospective seller or tenant/buyer I break it down to even simpler terms. Yes, another good thing I learned as a “salesman,” KISS.
Finally, where you attribute problems people new to the business are having as "having a weak stance to being with…"is probably correct. I don’t know of anybody who comes into this business, including myself, who didn’t begin with a “weak stance.” Perhaps you were more fortunate than the rest of us in this regard. What we did do, and continue to do, is learn new ways of doing things so that we increase the ways in which we can “solve” problems, rather than trying to force our own wishes on people we’re trying to do business with. And, sometimes, that means doing something different from what is called “conventional wisdom.”
If something is keeping you from doing deals, fix it. Ask your questions on this board and usually, you’ll hear a lot of answers…some good, some bad [not bad to have either, if you learn something from them] and some just a waste of time.
Read ‘em all…and pick out what works for you.
I will continue to avoid “convincing,” and "hard-selling,’ while others may choose this as their path.
It works for me!!!