The joys of finding a L/O tenant - UGH!! - Posted by Scott (GA)

Posted by Tray Giddens on July 15, 2003 at 16:09:33:

you must try to prequalify their motivation before you even set up an appointment to show them the property .

ask them a couple of simple questions over the phone.
“if you like the property , would you be in a position to sign documents this afternoon?” then after showing the property and they like it, tell them you have two more appointments for the property that evening that you would be willing to cancel if they would commit to you now…

always ask for certified funds in the form of cashier check or money order…say that your accountant requires certified funds or whatever…

i had a real estate deal that dragged on for an additional three weeks because the title company failed to inform me that the $1000 earnest money check had a stop payment put on it as soon as it was issued… the buyers were still acting like they were buying but were completely bogus the whole time…

Tray Giddens
www.hudsandvas.com

The joys of finding a L/O tenant - UGH!! - Posted by Scott (GA)

Posted by Scott (GA) on July 15, 2003 at 10:03:02:

Okay - just a venting message.

Have a property that is being marketed as owner financed, however, they turn into Lease Option deals since the buyers do not have 10% down.

4 people in the past 4 days have all agreed to purchase the home on the lease purchase terms. We shake hands and agree to sign the papers later that night. In each instance, they “thought about it and do not want to make a move at this time due to finances”. ARGGGHHHH!!!

The house is right priced with respect to rent and option consideration (less than 3% of purchase price).

No, I didn’t have contracts with me that could be signed on the spot (my bad), but even if I did and they signed the contracts, they would still call back and decide it wasn’t for them.

Besides having them sign the contracts at the time of the hand shake - is there anything else I can do?

Jilted in Georgia (Scott)

“Lock In” question. - Posted by Sandy (NY)

Posted by Sandy (NY) on July 16, 2003 at 04:00:22:

I am not sure if this is state-specific, but isn’t there a law that gives someone the right to rescind (take back) an offer within 72 hours of signing a contract? If so, be careful so you don’t look like you are badgering people.

My .2

Sandy

Re: The joys of finding a L/O tenant - UGH!! - Posted by REIMentor

Posted by REIMentor on July 16, 2003 at 01:20:39:

Scott,

I will add one more thing that is VITAL when dealing with tenant buyers:

CREATING A SENSE OF URGENCY!!!

As several others have indicated, this is indeed sales we are talking about. As such you absolutely must have contracts there with you - period. But you must also convey a strong sense of urgency.

When I talk to tenant buyers about a specific house, the first thing out of my mouth is how I’ve already had 20 calls on it today alone. Immediately they’re going “Whoah, if I want this thing I’d better hustle.” I explain all the terms and am very straight with them over the phone about it. I ask them to tell me exactly how much they have to put down and go over the fact that maintenance will be their responsibility, etc. etc.

Then I do one of two things:

  1. A “Buyer’s Convention” in which I schedule an appointment with at least 3-5 sets of buyers on a Saturday - at the exact same time for all of them, but they don’t know it until they all show up at the same time. Schedule it for a wierd time like 2:20P - not only do they presume it will be one-on-one, but they tend to show up on time when it’s more specific. During the buyer’s convention (as I call it) I have them all sign in including putting down how much DP money they have so all of the others can see that as well. Needless to say, as they walk around it’s a bit tense for them because they know one of the other’s might get it before they do. I ALWAYS get a certified check from one of them that day - it has never failed.

  2. Or you can call a buyer off your buyer’s list (you do have one right?) who fits the house well and you know they have the money - create urgency for them to drive by this particular house, get them in there, etc.

ASK THEM TO BRING THE CERTIFIED CHECK WITH THEM - if they don’t like the house they’ll tear up the check.

It’s time to become a sales person. Don’t let these buyer’s jerk you around. Establish up-front expectations and you WILL see a difference.

All the best,

Ken Preuss
reimentor@yahoo.com

Re: The joys of finding a L/O tenant - UGH!! - Posted by Ben (OH)

Posted by Ben (OH) on July 15, 2003 at 14:19:25:

How well are you qualifying these folks before shaking on/agreeing to a deal? You need to nail them down in terms of their reasoning, finances, and decisionmaking process, cover all the bases and then you can close them. After that, tell them, 'ok, we’ve agreed to this, I want to know that you’re absolutely sure about this and that you’re not going to get home or call me later and say that you’re not interested. It’s ok to tell me you don’t want to move forward now, but I don’t want to have you get cold feet later. Is that fair?'
It’s sales technique vs. ‘pure real estate’ brute force. It’s the soft side of how people decide and feel good about their decisions. You might increase your ‘close’ ratio and decrease your invested time and remorse factors later on by covering these bases. And, in the spirit of working smart, you should do most of the qualifying (save the post-close stuff as I described until the actual time of post-close) before you show a house–can they afford it? who else is involved in the decision? why are they doing this and does this meet their needs/relieve their pain, etc.?

Each bad experience is a lesson, and I believe that good qualifying, providing a chance to back out, and for them to re-confirm their commitment to the deal can save you a lot of time and energy (not least of which is not showing the house until you get a commitment of sorts that if it meets their needs), they’ll do the deal and if it doesn’t, they’ll say no–avoid the no-man’s land of I’ll think about it or I’ll get back to you.

Re: The joys of finding a L/O tenant - UGH!! - Posted by Bill H

Posted by Bill H on July 15, 2003 at 12:00:20:

Scott:

You have experienced first hand the reason lenders want 10 to 20 percent down. Lack of financial commitment leads to lack of mental/moral commitment.

PLUS; lack of a signed legal document leads to unanswered questions, “What did he say?” etc. and that leads to buyer’s remorse and that leads to the phone call you got saying, “We don’t want to do it for finance reasons.”

Take your contracts with you, get them signed, leave on the POSITIVE note that “Mr & Mrs Joe Jones, you are now NEW HOMEOWNERS…CONGRATULATIONS.”

Good Luck,

=======>Bill

Re: The joys of finding a L/O tenant - UGH!! - Posted by Matt(MI)

Posted by Matt(MI) on July 15, 2003 at 10:42:22:

You have to HAVE the CONTRACTS on hand. Do you really mean business if you don’t? Your problem is you didn’t close the sale…you gave them an out. Let them think about it after they have signed copies in their hands. Then it’s solidified and they don’t back out without reprecussions.

Do it right the first time,and then you don’t have to grumble =O)

Plus, if they can’t come up with a full 10% down, do 5% down but increase the sale price a few thousand dollars. Give THEM the OPTIONS…people like to choose.

Hope that helps!

Matt

Re: The joys of finding a L/O tenant - UGH!! - Posted by Scott (GA)

Posted by Scott (GA) on July 15, 2003 at 14:24:54:

Excellent feedback - Thanks

Re: The joys of finding a L/O tenant - UGH!! - Posted by Scott (GA)

Posted by Scott (GA) on July 15, 2003 at 14:00:01:

Thanks for the comments Bill.

I’ll continue to chalk these “costly” lessons up to my RE college education.

Scott