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Posted on: November 19, 2020

Imagine working on a potentially lucrative deal and the seller becomes uncooperative all of sudden. It can be very frustrating to say the least. However, it is also reassuring to know there is a way you can save massive deals before they collapse.

In this episode, listen in as no less than Mr. TTP himself, Brent Daniels, gave valuable insight and guidance on how to snag a juicy deal when you are competing with countless others.

If you need a masterclass on what to do when a massive deal goes south, this episode is for you!

Key Takeaways

  • Why it pays to stay in front of the seller
  • The crucial question you need to ask
  • What you can do to stay in the conversation when you’re competing with others
  • What to do if the seller asks for a really ridiculous price
  • What an escalation clause is and what it’s for
  • Why the escalation clause is so important

RESOURCES:

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Episode Transcription

Matt:
Hello.

Speaker 2:
Matt.

Matt:
Yes, sir.

Speaker 2:
Hey, let’s go. So you’ve got a seller that’s ghosting you or have they reached out to you?

Matt:
Smidge, yeah.

Speaker 2:
Nothing.

Matt:
I guess the 30 seconds version is, the brother who’s responsible is in Hawaii. I’ve been negotiating with him for months now. And he was trying to get it settled to where he could sell the dad’s house. The brother who lives here locally, he’s kind of a dead beat, who’s let it go into pre-foreclosure. And so I’ve been working on this since August. And then the dude in Hawaii got COVID, yada yada. So I reached out to him and told him I’d increased my offer, last night. And then the brother calls me and says, “Oh, that’s what the other person said they’d offer. They’re coming tomorrow, do you want to come?” And I’m like, “No, I don’t want to come get up.”
And I said, “If I’ll give you 2,500 more, can we move forward with the contract tonight?” “Yeah, yeah. Send it to me and my brother. Here’s our email.” So sent it to him and then followed up with him, text. And calls last night, nothing. And so the dead beat brother here locally, sounds like he’s meeting with a local wholesaler, who I think is one of the the typical shark, say anything and get things done. So yeah, it’s a bummer.

Speaker 2:
Well, who’s on title? Who owns the property?

Matt:
The brother in Hawaii got legal work done, which is why it was taking so long, to where he could sell it. There’s three brothers, two of them have to sign off on it. And that took a while to make it happen.

Speaker 2:
What’s the address? I’m going to pull it up on Propstream. And that is, what’d you say? What’s the city. Yep, got it. Okay. Let me see. That’s a huge lot. Okay.

Matt:
You know what’s a bummer. Originally, we had agreed that I was going to get it for 110. So I was looking at a nice little-

Speaker 2:
You we’re looking at a nice deal. What did you end up with?

Matt:
Well, I told him last night, 1175, which is still going to be a great deal. I’d rather him tell me, “Piss off.” I’d rather get that than this gut punch of being this close.

Speaker 2:
Well, yeah, I know it, it looks like the property is owned in that trust.

Matt:
Right.

Speaker 2:
And let me see when it went into that trust. No, I mean, it’s been in there for a while. So it’s still in the… Now, is the father deceased?

Matt:
Right, father’s dead. The deadbeat brother has been renting it here, locally. And it’s the kind of guy who doesn’t even replace air condition or furnace, the tenant’s been living-

Speaker 2:
Listen, his estimated mortgage payment is $451 and he’s not paying it. You know what I mean? There’s some distress here, they need to sell this thing.

Matt:
I’m on your side, I mean, time kills all deals. I was trying to stay in the face of the Hawaiian responsible brother, but not piss him off. And it’s been just so slow.

Speaker 2:
Well, and that’s why I think that the door’s still open. Because if somebody local is meeting with the other brother, yeah, he could promise everything that he wants. But until the real decision maker comes around, I think that you need to focus your efforts on just staying in front of the brother in Hawaii.

Matt:
Right, that’s true.

Speaker 2:
Right. And you just need to buddy up and really just over-communicate. Don’t go crazy, but just over-communicate with him. Does he live in Hawaii or is he just on vacation?

Matt:
He does, he lives in Hawaii. I sent him a message at 2:00, which is 8:00 their time. “Hey, I know we’ve been talking for a long time. We agreed on this price in the past. And me and Steve agreed on a price. I’d love to buy it. I’ll help the current tenant move out, help with his moving cost.” And I tried to hit on his heartstrings. And he said, “I’ll reach out to my brother and get back with you this afternoon.” So I guess it’s not totally done.

Speaker 2:
Yeah. Stay in front of him and just talk to him. And you need to be… Because I guarantee you that if there’s a responsible brother, he’s really worried that he needs to take care of the brother that’s living there now. You know what I mean? So I think just reassuring him, “Hey, listen, I’m going to help the transition to help him get out and to do these things. I don’t know if the other people will, but I can help out with that situation. I can make sure that this goes as smooth as possible for you. You’re all the way across the world. You’re across a whole ocean. You don’t need to be dealing with this. What will it take for us to work together?” That’s the question I want you to ask, “What will it take for us to work together?”

Matt:
Yes, sir.

Speaker 2:
Right?

Matt:
I hear you. I thought it was money yesterday.

Speaker 2:
Right. And whenever you give them an offer, whenever you send them an offer, they’re going to leverage that, right? They’re going to leverage it with somebody else, especially if somebody is in there, that’s not paying $451. Anything more is going to mean a whole lot to him. He’s not going to hold his cards to the chest. You know what I mean? He’s going to talk about it.

Matt:
So like yesterday I should have said, “Oh, hey, I can meet you there in 15 minutes.” Or, “I can meet you XYZ, 15 minutes.” Would that have been the better play, I guess?

Speaker 2:
I love right now, meeting face to face. Just because inventories so low, interest rates are so low. The housing market is just booming. New construction is down a little bit because the construction costs are so much higher because we can’t get stuff out of China. So there’s just a lot of things that factor to it. So anytime that you can get in front of them, get in front of them. Right?

Matt:
Right.

Speaker 2:
But I don’t know, I’m still confused on who actually has to sign the contract.

Matt:
Two out of three brothers. So the Hawaiian brother has to sign and the local brother has to sign.

Speaker 2:
Got it, okay.

Matt:
They have another brother who’s estranged. And they’ve had to get some legal paperwork saying that the two of the three can move forward. So-

Speaker 2:
This is what I would do. If you’re comfortable with this, are you familiar with an escalation clause?

Matt:
I’ve heard of the idea, yeah.

Speaker 2:
So basically basically, “Hey, listen, brother that lives here. I’ll give you $500 more than anybody else. Just let me know. It’s got to be in writing. You’ve got to have a written contract. But I’ll beat any contract by 500 bucks or a 1,000.” Whatever you think. It kind of puts you in the position where you’re still in the conversation. And if it’s really about the money for them, they’re going to communicate with you.

Matt:
That would have been a good one yesterday to pull out.

Speaker 2:
Well, text him.

Matt:
Yeah. I’ll text him right now.

Speaker 2:
You know what I mean, just say, “I’m willing to, if you do receive another offer, I’m willing to put an escalation clause into my contract, that gives you $1,000 more than a written offer that you get from anybody else.”

Matt:
Nice,-

Speaker 2:
At least that might get him to pop his head out a little bit and communicate with you. At least open up that conversation so that you can start seeing what the other offers are and if the other buyer’s serious. Or if they rubbed him the wrong way, or if they’re in love with these new buyers. So it’s not just an unknown in your mind.

Matt:
When you do that, do you demand or request to see the other person’s written offer? Or do you just kind of have to go off of what the seller says?

Speaker 2:
If he puts something that’s just really crazy, some bananas price. All of a sudden he goes, “Well, this guy offered me 220.” Or something, be like, “Okay, I’d love to see that written.” And you can set a cap to it if you want, but I would just leave it open-ended for now. I’ll give you 1,000 bucks over and we’ll make sure that my offer is the absolute best for you, because I know if you work with me, I’m going to make this as smooth as possible for you.

Matt:
I like it. Yes, sir. I appreciate it. Yeah.

Speaker 2:
Yeah, you got it Matt. So text me and let me know how it goes. Let me know when you get in contact with him again, okay?

Matt:
All right, I appreciate it.

Speaker 2:
All right, brother.

Matt:
Thanks.

Speaker 2:
See you. Now you see that, the escalation clause, it is so effective. And it’s so effective at opening up the conversation again. Because all of a sudden, if it really comes down to money and you can’t really build the rapport with that motivated seller, it just gives you the chance, the little chance to be able to have that conversation. And to have them reach out and let you know, what the other offer is. And if you just beat them out by 500 or $1,000, you can get that deal. And that could be the difference between making 5 or 10 or 15 or $20,000. On this specific deal because I pulled it up through Propstream, I know that this is a big, juicy, fat deal. This is going to be a fantastic deal for him, if he can lock it up. He just has to open up the conversation. So use this in your business. Use this, if you are running into a situation where you are trying to get your offer accepted and the seller is just being completely silent. You’ve got this, I know you do. You’re the best, I love you. See you.
And for anybody interested in joining the most proactive group in real estate investing, it is the TTP family. Go to wholesalinginc.com/ttp. Wholesalinginc.com/ttp, check it out, scroll down. If it feels good in your gut, sign up for a call. It’ll either be with me or my right hand guy. And I look forward to that. So thank you guys again for listening. I encourage you always to talk to people. Love you, see you.

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