Selling Houses Fast
by Ron LeGrand
One of the most common things people fear about getting into real estate is
they're afraid they can't sell the house and somehow they'll get stuck with it.
I can understand why this would create anxiety for a beginner because they
simply don't have enough facts to overcome the fear. However, if you're not a
beginner and this is still a problem, there's no excuse for it. So let's get it
fixed right now.
The truth is . . . selling should be the easiest part of your business
Are you not buying because you're waiting to sell what you have first? Is your
income suffering because you haven't plugged the hole in the back end? Are you
so afraid of selling you quit (or never started) buying?
In this article, I'll discuss the reasons why some people have trouble selling
and how to fix them. In addition, you should know we now have a live, two-day
boot camp I teach focused on the same thing...Selling Houses Fast.
I've identified 14 reasons here. Pay close attention to numbers 4-7 because
combined they equal about 80% of why houses don't get sold quickly.
Most of the time it's a people problem, not a house problem. So here we go, in
no particular order.
Why houses don't sell quickly...
1. Not ready to sell.
2. Poor area.
3. Over-priced.
4. Salesperson's personality problems.
5. Inflexibility of seller.
6. Salesperson's lack of knowledge about financing programs available.
7. Salesperson's lack of knowledge about attracting & prescreening leads.
8. No follow-up system in place.
9. Functional obsolescence.
10. House very small.
11. Salesperson loses control of the loan process.
12. House located too far away from the city.
13. House is in high price range where few buyers can afford.
14. Only one bath.
Notice the majority of these problems are directly related to the person in
charge of making the sale...and the rest should be fixed before you buy.
1. Not ready to sell.
2. Front appearance - Would you want to see the inside?
3. Roof - Does it need to be replaced?
4. Exterior paint - Is it at least 2 colors and looks fresh? Are the colors
pleasing or gaudy?
5. Interior paint - Is it two colors or does it look like a white tornado went
through it?
6. Interior trim - Is there color, paper borders, blinds, bath and kitchen
accessories, lever door handles, shower curtain or door, etc.?
7. Carpet - Same old lifeless, ugly brown or have you tried hunter green? Would
you want this carpet installed in your home?
8. Central heat and air - If you're in the southern two-thirds of the country,
it's not an option. Do it.
9. Kitchen - Does it have plenty of cabinets or just enough to get by?
Customers won't complain about shoddy repairs. They just won't buy.
If it doesn't look good enough to satisfy your wife, your buyers won't like it
either. Spend a few more dollars and make it a house you can be proud to sell
and know your buyer will rave to others about.
If you do, amazing things will happen.
1. It will sell quickly.
2. It will appraise for more.
3. You'll sleep good at night.
4. Your buyers will send you customers.
5. Your good reputation will spread quickly.
6. The neighbors will send you customers or sell their houses to you.
7. Your attitude will improve and you'll enjoy dealing with buyers more because
you know you have a great product.
8. You'll save the extra money you spent in holding costs. So, in reality all
these benefits are free.
9. It'll probably even improve your sex life. Think about it. More sales means
more money. More money means happier spouse or significant other. Happier spouse
means more frequent and better sex. I heard that on Oprah the other day.
10. Poor area.
11. Is it a war zone? If so, you must learn to sell low income houses or don't
buy there if you intend to retail.
12. In low income areas it's critical you master the art of financing. You will
not survive if all your sales must be to a buyer or sold for 100% cash out.
Get educated or get out.
The good news...
A. You can make some large spreads on these houses because you can buy them dirt
cheap.
B. Most of your competition won't touch them.
C. They're easy to find and easy to buy.
D. At today's interest rates buyers can qualify with small incomes.
E. Financing is plentiful. Some with no down payment.
F. You can always wholesale if rehabbing isn't feasible for you.
The bad news...
A. Vandalism is normal.
B. You'll have to screen out a lot of buyers.
C. You'll be tempted to break the law by falsifying down payments because most
of your buyers are broke. Don't do it.
D. You'll have to take back a lot of seconds and 50% or more will default. So
what? It's all free money anyway.
If you're going to work the low income or war zone areas, just be sure your exit
is clear and you don't get into any traps. Don't rehab in a war zone unless you
know where to get the buyer financed. You'll find a buyer who wants to live
there and you can live with vandalism.
In addition, you must be flexible on terms, not expect to get cashed out 100%
and clearly understand you will be prescreening one of the most uneducated
segments of our society. It will take patience and practice.
3. Overpriced Is Not What You Think
Just for the record, all my houses are overpriced. And I'm proud of it, in case
anyone asks. You should always set your sales price higher than what the house
appraised for. If you don't ask for more I can assure you, you won't get it.
But there is a limit. You can't go nuts on me here. Putting a $125,000 price on
a $100,000 house is pushing the envelope. However, putting a $109,900, or maybe
even a $114,900 price on it may work fine.
Your market will tell you quickly. If the buyers all complain about the price,
you know you have a problem and you may want to lower it a little.
Warning!
Make sure the price is the problem before you go fixing what isn't broke. Only
your buyers can tell you the price is too high. Not your spouse, your neighbor,
your brother-in-law or even your Realtor. If I had $100 for every time a Realtor
told me my price was too high, I'd be in a higher tax bracket. Actually, that's
not true. They don't get any higher.
You can always lower the price. You can't raise it once it leaves your lips. I
don't know for sure but I bet I haven't lowered the price on more than 15% of
all the houses I've done to get them sold. As a rule, a 10% above appraised
value or good comps is the upper limit. You'll have to decide the price based on
the area, condition, salability and heat of the market. Just don't be giving
away money because you're listening to morons.
4. Salesperson's Personality Problems
Have you ever talked to a seller or a Realtor you didn't like? A mean-spirited,
grouchy, personality perhaps? How about someone who just won't shut up long
enough for you to ask a question? Maybe you've encountered the prescreened type
who treats you like the enemy until you pass their qualification test.
How about all those times you got the wife on the phone and she was afraid to
speak without her husband's permission, or vice versa. That doesn't even count
the ones who do talk but never say anything. Then there's the clueless spouse
who can't even tell you the asking price, much less the other details. Sometimes
I wonder if these folks ever talk.
How about the couple in the middle of a divorce who talk to you like you're the
one who just slept with their spouse? Then there's the know-it-all. You know,
the kind who wants to do a seminar for you on the phone to impress you with
their intelligence in the art of real estate. They can't sell their own house
but they can certainly tell you how to do it.
Of course we can't forget all the thinker brains trying to sell to the reptile
brains, and vice-versa. Or the sellers so in love with their house it takes them
30 minutes to describe every little detail while you're trying to stay awake.
Gosh, I'm getting depressed just writing this. I don't want to ever talk to a
seller again. Just kidding.
The key for you is not to become like one of those people I just described. If
you already are, you can fix it once it's identified. Here's a hot tip. Record
your calls and listen to yourself selling your house. If there was a moron on
the call you'll probably recognize his/her voice.
5. Every Single Time You Talk to a Buyer You Must Sound...
Friendly, Flexible and Excited
If you can't, get someone else to sell your houses, which is a whole other
subject I'll cover next month.
Inflexibility of seller
That means most sellers can only see one way to sell a house and if that isn't
happening the house will sit and sit until that perfect buyer comes along.
Finding an A credit buyer to cash you out isn't the only answer. This is
especially true for the low-income houses where A+ buyers are scarce.
The more you know about different exits, the easier it will become for you to
get flexible. If you don't have your money in the deal and you can live another
week without the cash from the sale, it frees you up to get creative and look at
other alternatives.
Here's a news flash for you . . .
It's your job to find a buyer who loves your house . . . then make it work!
That means sometimes you must be flexible. It's not a perfect world. Bend a
little. Here's a short list of selling methods.
A. Sell to a qualified buyer and cash out now.
B. Lease option and cash out later.
C. Sell with owner financing and help buyer get refinanced later.
D. Sell with owner financing and sell the note at closing for 93% of its face
value. We spend a whole day on this in the Paper Power Boot Camp.
E. Get the buyer an 80% - 90% loan with a secondary loan at a higher rate and
take back a second for the difference.
I bet you didn't know you could be that flexible did you? Sorry, I can't go into
these in detail here but I think you get the message. There's always another
way.
6. Salesperson's Lack of Knowledge About Financing Programs Available
No, this is not the same thing I just said. If you're going to master your craft
of selling houses you must learn a lot about financing programs.
What will kill loans? What programs require little or no down payment? What
credit can be fixed and what can't? What will the lender want fixed before
closing? Who will let me take back a second and who won't? And 40 or 50 other
questions you'll get the answers to as you go.
You don't have to know all there is about financing to sell a house, but the
quicker you learn, the easier it gets. Make an appointment with 3 or 4 mortgage
lenders and pick their brain. Let them help with what will work and what won't.
Then when you get an interested prospect it's simply a matter of getting the
buyer's information to the lender of your choice and letting them tell you what
will work.
That's the best way I know to learn the ropes about financing. But you know
what? A lot of veterans won't even take time to do this. I guess they feel
they're too good or too smart to humble themselves and actually ask for help. My
friend, what you knew about financing a year ago is not what you should know
today. It changes monthly. You must stay on top to be the best.
In the next issue, I'll finish my list of reasons why houses sometimes won't
sell. In the meantime, read over these pointers I've given you and start
developing your own selling strategies.
Here's hoping all your houses sell faster than you can buy them.
Bio:
Ron LeGrand is a nationally recognized real estate expert and trainer with 25
years experience in both residential and commercial properties and a 20 year
history of hard money lending and brokering. His experiences include personally
buying and selling over 1,600 single family houses and completing over
$300,000,000 in Commercial Property deals with student partners all over
America.
He’s obtained current real estate developments across America with market values
exceeding two billion dollars, all under his control. His properties include
office buildings, industrial, commercial, mixed use and residential land
development, luxury condominiums, marinas, etc.
Mr. LeGrand is a highly sought after platform speaker whose addressed audiences
as large as 20,000 and as small as 100 in hotels and convention centers across
North America, sharing the stage with leaders such as Donald Trump, Robert
Kiyosaki, Rudy Giuliani, Tony Robbins, Larry King, Dr. Phil, Suze Orman, and
many others. For the last 20 years he’s been helping thousands of ordinary
people take their lives back and create financial freedom by implementing his
systems for success as real estate investors. Today he’s considered the
country’s leading expert and is referred to by many as the “millionaire maker.”
His book is in stores and online and over the years he’s created dozens of home
study products, held live training events on various real estate related
subjects. He spends much of his time passing on his experience at those live
training events, held in various parts of the country, while simultaneously
running over ten different business he owns and controls.
Ron LeGrand's 41 year marriage to his wife Beverly has produced four children,
nine grand children, and two great grand children.