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 6 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 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!
- Three points of negotiation
- What speed and convenience looks like
- How you can get properties at a discount
- What you should be thinking about when negotiating with sellers
- What the wholesaling business is really all about
- People you should be working with and serving
- Why you shouldn’t focus on the seller’s how or why
If you are Ready to Explode Your Wholesaling Business, Click here to Book a Free Strategy Session with me right now!
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Do people really sell at a discount? Yes, people do sell at a discount and why is it? Why are they willing to sell at a discount? So my name is Cody Hofheinz, by the way, and I’m excited to just break this down for you. So you can understand that every one of us have the opportunity, no matter what state you live in, no matter what city you live in, to find deeply discounted properties. Properties that you can purchase for 40, 50, 60 cents on the dollar. And you might be thinking, “Really? Like really, really?” Like, yes, really, really. We have done over a thousand of these deals over the last five or six years. And yes, I’ve also seen each one of my students that go through the course and are out there taking massive imperfect action and out there making offers and out there going on appointments that they too are coming across properties all across this great nation at 40, 50, 60 cents on the dollar. And some of them even less than that.
Now why? Why would people be willing to sell at a discount? If they know they can get more money for their property, if they could do something that allows them, or if they just clean their carpets, they could get $20,000 more or, “Hey, 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. So if their homes in disrepair, but they’re like, “Hey, I might as well fix it up, I might as well do the things that I need to, the cost repairs. And then I’ll get more money for it.” Yes, they can. Could they list it with a realtor? Absolutely, they could. Any one of us, we all know five, six, seven, 10, 50 realtors. And we could all list our homes with a realtor and hopefully get retail market price on that.
Yes. So 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? There’s 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 really the three points of negotiation. You’re willing to give them two of those and they’ll give you a third in return.
So these are the three points, you’re willing to give them speed and convenience and they’re willing to give you your price. Now, what is 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. And they told him he has two weeks to get down there, two weeks. So, “Hey, by the way, we’re giving you a new job, but you have to be in Arizona and you got to be down there in two weeks.” And they also provided some money to help for that house purchase that they’re going to do. So he calls me up, he’s like, “I need to sell quick.” I’m like, “Okay, have you thought about listing with the realtor, you can get just retail price?” “I can’t, I need the money now because got to be in Arizona and I’ve got to be there in two weeks.” I’m like, “Okay.”
So realtor’s not an option and a normal real estate transaction, guys, 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 like due diligence and people getting qualified for a loan and then closing on it, let’s say 45 days. But it could be two months, it could be six months, it could be eight months. No one knows. And so speed, that was a situation where I was able to give him speed so that he could give me my price. You can close in two weeks, I will do it at this price because I need to be out of here quick.
Now, what does convenience look like? Convenience could be, let’s say in this same house, let’s say not only he needs to be gone in two weeks, but let’s also say, “Hey, I know there’s 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 and that goes through the MLS and it’s on the market. And a realtor comes and shows the property with their client, that a retail buyer, I know there’s things with my house that they’re going to ask to be repaired. My roof, for example, only has one year left and it’s already curling, the shingles, and I have a leak in the basement that now it’s stopped and it’s fixed. But the sheet rock has not been repaired. I have flooring that’s missing or I have carpet that’s old and it has like urine smell because I have a dog.” There’s all these little conditions that they’re like, “I don’t have the time or the money to repair the roof. I don’t have the time or the money to repair all the flooring or to repair the leak downstairs.”
And so what we, as investors, can do is say, “Don’t worry about that. Not only if I just give you speed, where I can close on your timeframe, you tell me when you want to close. But convenience, where I’ll take it as is.” I don’t need an inspector to come through here and say, “Oh, this is bad, the roof’s bad. Oh, there’s a leak in here. Oh, the carpet’s bad. Oh, this is bad.” I would have them fix that as part of your contract. I’m saying as an investor, I’ll buy it as is. So if I can give you the speed and convenience, they’re willing to say, “You know what? 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.
So don’t overthink this. I don’t want you to think that, “Oh, 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 on my house that I can’t fix myself or have repaired because I lacked time or lack money. So yes, me, I’m not going to sell at a discount, but that doesn’t mean everyone. There are a percentage of people where you’re going to be a phenomenal option. You’re not always the option, it’s okay. It’s okay, this should be really a business of service of just listening.
When people call you and say, “Hey, I need to sell my house.” I hope you’re not really thinking about the house, I hope you’re thinking about the seller and really listening to what their struggles, their challenges, their trials, their problems are. And to see if you can be a problem solver. Because that’s really all we are as real estate investors, all we are is just problem solvers. The better you get at solving problems, the more contracts you get that allows you to buy individuals homes at a discount. So that’s what this business is all about, I want you to think about that more than anything. Not, “Oh, how do I get this at a deep discount? How do I do this? It’s a three bedroom, two bathroom.” It’s like, “I don’t even care about any of that.” It’s just genuinely solving people’s problems when they call me, “Hey, I’m going through this, this, this.”
I have an individual that we did where they’re going through divorce and they wanted to split their assets up and they needed do it quick. I suggested to him, “You can get more money if you go through a realtor.” “We don’t want to go through a realtor, we just need to go through this quick.” “Okay, have you thought about keeping it as a rental?” And they’re like, “Don’t want to be a landlord.” Most people don’t. And so you think, “Okay, any other thoughts besides me? Because I’m not a retail buyer, is that going to stop us from doing business today?” And they’re like, “No, what can you do?” And we start the negotiation, “Not only if I get this price, but I’ll be able to give you the speed and I’ll give you the convenience.”
So focus on those things and focus on the right people. You will never convince someone that wants full price to sell at a deep discount, 50, 60 cents on the dollar. It just won’t happen, but those aren’t the people you’re supposed to be working with. There’s people out there that legitimately need your help. There’s people out there legitimately that you can serve at a high level. Love like it is your parents if you were talking to them, or a sibling, like if you were talking to them and they were going through a struggle. If my mom came to me and says, “Son, I’m going through a divorce.” I would never say, “Well, 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. 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.
So if someone really was going through divorce, by the way, my parents are not. If someone was really going through divorce, you’d want to sympathize with them, empathize with them. You’d want to sit there and help them. You wouldn’t be like, “Okay, so 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, “So 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 really helps you, so you can get out of this situation so 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. And the byproduct is, we get contracts that allow us to buy their houses.
So guys, don’t focus on the how or the why. Why do they sell at a discount? Who cares? Just know they do. But again, it comes down to, it’s because you’re given more to them than they’ll actually give to you. You’re given more in value than you ever charge in price. You’re given speed and convenience, they’re giving you the price that you want. Now get out there and I want you to take massive imperfect action. Don’t think about this anymore, don’t think about, “Oh, I can’t get in the game because I just don’t believe people sell at a discount.” They do. They do sell at a discount, not everyone, but there’s 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.
And 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 and we’ll see you on the next episode.