Posted on: July 03, 2020
WI 463 | Sell Homes At Discount

 

For some people, the whole idea of homeowners selling their properties at deeply discounted prices can seem too good to be true. However, wholesalers can attest that some people really do sell at a discount. Why? That’s what our very own Cody Hofhine discussed in this episode!

Cody knows wholesaling like the back of his hand. Over the last six years, he’s already done over a thousand wholesaling deals. That being said, he can confirm that many people really do sell their properties at deeply discounted prices.

At first glance, selling at a discount just doesn’t make any sense. After all, homeowners have the option to fix things up or list their properties with a realtor so they can still get the retail market price.

In this episode, Cody discussed 2 of the biggest reasons why people sell their properties at a deep discount. In addition, he also shared beneficial negotiation and mindset wisdom, so make sure you tune in!

 

WIP 463: The 2 Biggest Reasons Why People Sell Their Homes At A Massive Discount With Cody Hofhine

Episode Transcription

Do people really sell at a discount? Yes, people do sell at a discount. Why is it? Why are they willing to sell at a discount? I’m excited to break this down for you so you can understand that every one of us has the opportunity, no matter what state or city you live in, to find deeply discounted properties, properties that you can purchase for $0.40, $0.50, and $0.60 on the dollar.

You might be thinking, “Really?” Yes, really. We have done over 1,000 of these deals over the last couple of years. Yes, I’ve also seen each one of my students that go through the course and are out there taking massive imperfect action, making offers, and going on appointments that they too are coming across properties all across this great nation at $0.40, $0.50, and $0.60 on the dollar, and some of them even less than that.

Why would people be willing to sell at a discount if they know they can get more money for their property and they could do something that allows them more like if they clean their carpets, they could get $20,000 more, or they’re like, “I can list with a realtor,” and they could get X amount or they could get a retail price? These are all true options. People could fix them up and they could get more money. If their home is in disrepair but they’re like, “I might as well fix it up. I might as well do the things that I need to that cost repairs, and then I’ll get more money for it,” they can. Could they list it with a realtor? They could.

Any one of us know 5, 6, 7, 10, or 50 realtors. We could all list our homes with a realtor and hopefully get a retail market price on that. Why is it then when people know that they can list it with a realtor or they can do some small repairs that will drastically change how much they can sell their home for, why would they be willing to sell at a discount?

WI 463 | Sell Homes At Discount

Sell Homes At Discount: There is a percentage of people where you’re going to be a phenomenal option. You’re not always the option, and it’s okay. This should be a business of service of just listening.

 

There are three things that come to negotiation that I want to tell you about that. I want you to jot this down, so if you have a pen and a paper, I want you to write these down because these are the three points of negotiation. You’re willing to give them two of those, and they’ll give you a third in return. These are the three points. You’re willing to give them speed and convenience, and they’re willing to give you your price.

What do speed and convenience look like? Let me tell you about a deal that I’ve done over the past few years where an individual lived in Utah and he moved to Arizona because of a job transfer. They told him he had two weeks to get down there. They were like, “We’re giving you a new job, but you have to be in Arizona. You got to be down there in two weeks.”

They also provided some money to help with that house purchase that they’re going to do. He calls me up. He’s like, “I need to sell quickly.” I’m like, “Okay. Have you thought about listing these with realtors so you can get it for a retail price?” He’s like, “I can’t. I need the money now because I’ve got to be in Arizona, and I’ve got to be there in two weeks.” I’m like, “Okay.”

The realtor was not an option. A normal real estate transaction, just so you know, is going to be about 30 to 45 days if everything goes perfect. You put it on the market, and the same day it goes under contract. It takes between due diligence and people getting qualified for a loan and then closing on it, let’s say, for about 45 days, but it could be 2, 6, or 8 months. No one knows. That was a situation where I was able to give him speed so that he could give me my price. He was like, “You can close in two weeks. I will do it at this price because I need to be out of here quick.”

Always listen to the seller and understand their struggles, challenges, trials, and problems because that’s all we are as real estate investors. All we are are problem solvers.

What does convenience look like? Let’s say in this same house, not only is it that he needs to be gone in two weeks, but let’s also say I know there are going to be a few things that pop up that if I sell it to a traditional buyer like someone that goes through a realtor, the MLS, and it’s on the market and a realtor comes and shows the property with their client, I know there are things with my house that a retail buyer is going to ask to be repaired.

My roof, for example, only has one year left and it’s already curling the shingles. I have a leak in the basement that has now stopped and is fixed, but the sheetrock has not been repaired. I have flooring that’s missing or I have carpet that’s old and it has urine smells in it because I have a dog. There are all these little conditions that they’re like, “I don’t have the time or the money to repair the roof, all the flooring, or the leak downstairs.” What we as investors can do is say, “Don’t worry about that.” Not only can I give you speed where I can close on your timeframe you tell me when you want to close, but also convenience where I will take it as is.

I don’t need an inspector to come through here and say, “This is bad. The roof’s bad. There’s a leak in here. The carpet’s bad.” I would have them fix that as part of your contract. I’m saying as an investor, I’ll buy it as is. If I can give you the speed and convenience, they’re willing to say, “This helps solve my problems. If I don’t have to fix that and do all these things and I can leave here in two weeks or less, I’ll give you your price,” and that’s how you get a discounted price.

Don’t overthink this. I don’t want you to think that, “I don’t get it. People don’t sell at a discount.” You’re right in that as well. Not everyone sells at a discount. If I’m selling my home, I’m not selling at a discount, but I don’t need to be gone in one week. I don’t have things going on in my house that I can’t fix myself or have repaired because I lack time or money. I’m not going to sell at a discount, but that doesn’t mean everyone.

WI 463 | Sell Homes At Discount

Sell Homes At Discount: Focus on the right people. You will never convince someone that wants the full price to sell at a deep discount. It won’t happen, but those aren’t the people you’re supposed to be working with. There are people out there that legitimately need your help.

 

There is a percentage of people where you’re going to be a phenomenal option. You’re not always the option, and it’s okay. This should be a business of service of just listening. When people call you and say, “I need to sell my house,” I hope you’re not thinking about the house. I hope you’re thinking about the seller and listening to what their struggles, challenges, trials, and problems are, and see if you can be a problem solver because that’s all we are as real estate investors. All we are are problem solvers.

The better you get at solving problems, the more contracts you get that allow you to buy individuals’ homes at a discount. That’s what this business is all about. I want you to think about that more than anything and not, “How do I get this at a deep discount? How do I do this? It’s a three-bedroom and two-bathroom.” I don’t even care about any of that. It’s genuinely solving people’s problems when they call me, “I’m going through this, this, and this.”

I have an individual that we did where they were going through a divorce. They wanted to split their assets up and they needed to do it quickly. I suggested to them, “You can get more money if you go through a realtor.” They were like, “We don’t want to go through a realtor. We just need to go through this quick.” I’m like, “Okay. Have you thought about keeping it as a rental?”

They’re like, “I don’t want to be a landlord.” Most people don’t, and so I was like, “Are there any other thoughts besides me? I’m not a retail buyer. Is that going to stop us from doing business today?” They were like, “No. What can you do?” We started the negotiation. I was like, “Not only do I get this price, but I’ll be able to give you the speed and I’ll give you the convenience.”

The better you get at solving problems, the more contracts you get that allows you to buy individuals’ homes at a discount. That’s what this business is all about.

Focus on those things and on the right people. You will never convince someone that wants the full price to sell at a deep discount of $0.50 or $0.60 on the dollar. It won’t happen, but those aren’t the people you’re supposed to be working with. There are people out there that legitimately need your help. There are people out there that you can legitimately serve at a high level. Love like it is your parents or a sibling if you were talking to them and they were going through a struggle.

If my mom came to me and said, “Son, I’m going through a divorce,” I would never say, “Mom, how many beds and baths does your house have?” I would never do that. I’d be like, “Mom, I didn’t know this was going on. How do I serve you? How do I help you?” That’s how you have to look at it. If someone was going through a divorce, you’d want to sympathize and empathize with them. You’d want to sit there and help them.

You don’t want to be someone that’s like, “How many square feet is it? Has everything been fixed up? Is there anything that’s not fixed up?” I wouldn’t. I’d be like, “What best serves you? What helps you the most? How am I able to serve you where if we do X amount of things that it helps you so you can get out of this situation and you can move on to plan B?” That’s what I’m going to do. I don’t care about the house. I care about them and solving their problems. The by-product is we get contracts that allow us to buy their houses.

Don’t focus on the how or the why, like, “Why do they sell at a discount?” Who cares? Just know they do, but again, it comes down to it’s because you’re giving more to them than they’ll be giving to you. You’re giving more in value than you ever charge at a price. You’re giving speed and convenience. They’re giving you the price that you want.

Get out there. I want you to take massive imperfect action. Don’t think about this anymore. Don’t think about, “I can’t get in the game because I don’t believe people sell at a discount.” They do sell at a discount. Not everyone, but there are individuals that need your help, so get out there, take action, find them, serve them at a deep level, solve their problems, and this will allow you to get more contracts. If you need help building your real estate business, head on over to WholesalingInc.com where we’d be glad to hop on the phone with you, see if it’s a fit, and then get you into the tribe. Until next time. Get out there and take massive imperfect action. We’ll see you in the next episode.

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