Asking Sellers The Right Questions - A quick Primer

Asking sellers a few specific questions is your key
to identifying potential deals quickly.  

Whether you are on the phone or standing at the
front door,  a few concise questions can get you
all, or most of the information you need to make
an offer.  
  
 In order to get this information consistently, I always 
use my "Check List for Leads" form as a guide.

I want to know what the property is worth, the
repairs, and the total debt on the property. 

Those 3 facts can tell me all I need to know in 
most cases. For example, if the sellers house is 
worth $100,000 but he tells you he will take 
$55,000, then you can be pretty sure that  you 
can make an offer that the seller will accept. 
When you find a deal this obvious, you want to
jump on it and make an offer immediately. 

On the other hand, let's say that the house is
worth $100,000 and the seller is asking $90,000. 
On the surface there does not appear to be
a potential deal. But knowing the Payoff tells
you how flexible the seller can or cannot be. 

When I check the mortgage records, I find that    
this seller actually owes $50,000 on the house. 
So, while he is asking a lot, the key now becomes
how motivated the seller is or how flexible he
is willing to be on terms. 

The point is, there are only a few critical pieces
of information that you need to assess the
potential of a particular lead. I use a form 
called a "Check List For Leads" for this exact
purpose. It keeps me on track and helps me
insure that I ask the right questions every
time. 

I Start by chatting a bit with the seller, to
get a little rapport going and get a feel
for the sellers disposition and level of co-
operation.  Then I simply ask the seller the 
questions on my form in a normal, straight 
forward manner. 

 Generally the more motivated the seller is, 
the more details they will readily provide. 
Sometimes they will tell you before you ask. 
If the seller is just "kicking tires" to see what 
someone will offer, he will usually be much less 
forthcoming with information. 

If they ask why I want to know something, I
simply tell them the truth. "I have to have
this information in order to find out if 
 I can make an offer that will work
for both of us". (I try to make it sound like 
I don't want to waste any of their time on
offers that they can't accept, but I am actually 
trying to protect MY time.)

Once you have an After Repair Value, and a
decent ballpark repair estimate, you can solve
for the Maximum Allowable Offer.  

ARV X .65 - Repairs = MAO

Then make the offer and see what happens. You
don't really have to know anything except the
ARV, and approximate repairs in order to make an 
offer on any property simply by use of the formula. 

You will have other due diligence issues to attend
to, but this is the method that many pros use to 
submit an offer quickly. You can always use inspection
contingencies or other contract language to protect
yourself. But really good deals go quickly.  

When you have a number of leads  you are working
with, such as when you are locating properties for
a professional investor or an investment company, 
The "Check List For Leads" form will help you determine
quickly whether you should eliminate a particular lead
or make an offer.  

You collect the needed info. Then fill in the blanks
provided to run your formula. You can put an offer 
together in minutes in many cases.  

Click Here to get your FREE Copy of this Form
Just right click on the form and choose "print". 
Feel free to make as many copies as you need. 

Now you can email me with more good leads!

The "Check List For Leads" is part of a course I
developed to train property locators for one of 
Atlanta, Georgia's largest wholesaling companies. 

The course includes detailed insider information on
how to search for  leads, how to evaluate those
leads accurately and quickly, and write an offer. 
It includes 3 hours of CD audio to walk you page
by page through the manual and help you get
started quickly.  

Click Here To Check Out The Course.  

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Is it a good idea to get my realtors license? 
-- "To be or not to be...that is the question."

A reader has asked me to address the issue of whether it
 would help her investing activity if she became a realtor.  
 
I actually did start my real estate career as a realtor.  
When I decided I wanted to get involved in real estate 
investing,  I did not really have any idea how to get started.

My only exposure to the investing world had been the 
Carleton  Sheets course, which I bought back in 1994.  
Still not feeling comfortable with the myriad of questions
 I had, I decided that any action was better than no action, 
so I got my real estate sales license. 

On the positive side, I learned a lot about real estate in
general. How to write solid contracts, different forms of
title, how to crunch numbers for buyers and how 
important is was to go out every day and get listings. 

Huh? get listings? I did not realize that being a realtor
was it's own full time business. My broker was adamant
about all her agents going out and getting those 
listings. After all, brokers make their money with
listings, so that is what most brokers want you to do. 

Investors are more interested in locating properties
that they can buy, not properties they can list. 
It soon became a clash of ideology with my broker. 
Her disdain for investors did not bode well for my 
investing career. I ultimately decided not to renew
my license. 

But I certainly came out of that experience knowing
 a lot about real estate. It was a great foundational 
education. But a rather expensive lesson in choosing 
a business model.

All in all, taking the courses for real estate sales
licensing was a big leap for my understanding of the
principles of real estate, but the fees and costs 
associated with being a realtor were a definite 
burden to someone who was not really interested
in functioning as a realtor day to day. 

If I were considering that decision today, knowing 
what I now know, I would take the realtor training
but I would not plan to get licensed.   
There are advantages both ways.  In making
your decision, keep in mind your long term objectives 
and don't do anything that will pull you off track.   **********************************************

I am looking for your questions. If you have a topic 
that has been burning in your mind, and you would like
 an answer, email me and I will try to address your 
question in the newsletter. As long as time permits, 
I always try to answer all of your email questions.

send them to drobinson@reihelp.com

Donna Robinson is also available for consulting and 
deal evaluation.

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Copyright Donna Robinson 2004 All rights reserved.

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