Mitch Goldstein | Coach Mitch | June 15th, 2007Coach Mitch’s REFLECTIONS™
Step 5 – Make your best deal – Close the transaction
The marketing is successful and sellers are contacting you.
Now you do your due diligence. There are many ways to research the property if it is local and almost as many ways if the property is remote. The research is key.
If the seller responds to your marketing with a return postcard, after conducting some level of due diligence, you can speak with the contact. If they call you directly, do certainly speak with them but understand that you must do the research prior to closing.
This next step is the most important.
After all, you have spent some time, money and effort in locating this motivated seller. You do not want to have located a great potential deal, only to lose it because you did not get along with the seller.
None of the gurus speak to the part of the sale after the initial contact. They all just assume that once the motivated seller is found, that the seller will simply roll over and “give” you the property. Not so!
Don’t forget, you are dealing with someone who is behind the eight ball. They are very aware of the potential that they might be taken advantage of. Sellers will cut their noses off to spite their faces. They think, “If they cannot benefit, then why should you benefit, especially at their expense?”
This makes sense to me.
Therefore, I deal very carefully with any seller, but especially so with sellers of tax delinquent real estate.
I employ many tried and true sales techniques, including Neuro-Linguistic Programming (NLP). I am aware of my body language and facial expressions. I never lose my temper. I listen carefully and intently. I parrot or mirror statements. I question intently but not in an obvious way. Where necessary, I appeal to a higher authority. I extensively utilize the sales techniques entitled “feel, felt, found” the “push away” and the “Ben Franklin.” They seem to be the most effective in manipulating peoples emotions.
If anyone thinks that all you need do it to send a letter, make an offer and sign a deal – you are in for a shock. Anyone who tries this approach will not be very successful, although the law of averages will allow for some low level of success.
People must be romanced, even lulled into thinking that you are the white knight that will save them. I practice this approach. People believe me and cleave to me. I can teach this and my successful students will practice good sales techniques.
Make your best deal.
Tax delinquents come in only two flavors: those whom I can deal with easily and those whom I choose not to deal with now or ever. You will notice that the choice is entirely mine.
Of the tax delinquents that I choose to deal with, there are only three ways that I construct a transaction.
1 High Price
Sellers who insist on getting a high price, something over 50% of Fair Market Value, FMV, I use Coach Mitch’s famous $1 Option.
2 Great Price
Sellers who will sell at something under 50% of FMV, I use cash or cash with a note or Coach Mitch’s famous $1 Option.
3 Give-A-Way Price = $100 – $5000
Sellers who NEED to move on with their life will allow me to take over their property for a ridiculously small amount of cash money.
Coach Mitch’s famous $1 Option can contain many different clauses that will make the seller happy, but I am still only putting out $1. That $1 is my total investment risk, excepting marketing cost. I have created hundreds of options at the same time and I have never paid more than $1.
Incidentally, while many have asked for more than a $1 Option consideration, my argument or rational for not giving more than $1 has been so convincing that I do not recall ever losing an option because the seller insisted on getting more than $1.
I concentrate on using emotions to get people to like me and to trust me, and I use logic for them to understand how I propose to do the transaction. It is a powerful combination.
Close the transaction
Now you must legally take control of the property. Either you will own it outright via deed or you will control it through Coach Mitch’s famous $1 Option.
Typically, there is no reason to do anything other than a Quit Claim Deed. A Warranty Deed is the typical deed used in real estate transactions but for expediencies sake Quit Claims are fine.
Understand that a motivated seller in a tax delinquent situation will usually not consult an attorney and therefore you can easily use a Warranty Deed. There is no real reason to use it and, if there are title defects, and you sue, these folks have no assets to compensate you, so it is a futile action and the Warranty is useless and could negate a deal if the seller understands that they are warranting the language in the deed.
If you are doing a remote transaction, then use a real estate broker to close the deal or a para-legal. The Realtor will be engaged to list and sell the property. Let them start earning their commission.
See Coach Mitch’s “Ridiculously Simple System…” ™ for details.
Good luck,
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