$200 offers for a house or land? Ridiculous! Post 142

Coach Mitch’s REFLECTIONS™

A Question

Hi Mitch,

Can i please ask you, if i offer to buy there property for $200 and they ask for more money, you say YES ($1 option) don’t they feel that you were first trying to trick them into selling a $100k property for $200 didn’t you like lose your true trust in their eyes?

My Answer

Intelligence in all things; that includes anticipating what the other side will feel, think, say, and do.

I don’t really anticipate offering $200 for a free and clear $100K property. That is either gutsy or silly. My intention is to find out what the seller is trying to accomplish, and then I try to give it to him – in a way that I can attain the amount that I need to profit.

It is gutsy (a good thing) to make the $200 offer if you base the offer on good information.

For instance, if the tax delinquent says, “I don’t care what I get, I just don’t want the county to get the property. I don’t care if I give the property away. Those no good %$!*&*% at the county made my life miserable and I don’t want them to get anything.” Test this statement. “But Mr. Owner, you have a valuable property here.” “I don’t care, they have made me so mad…” Don’t argue, whip out the quit claim deed and hope your pen doesn’t run out of ink. (Murphy lurks everywhere) BTW, this does happen – more than you might suspect.

OR

The property is not worth $100K. It is worth $10 to $30K and the tax sale is around the corner. This is the typical situation. The seller has tried what he knows to do, and it did not work. You are the only person showing some interest and he is disgusted with the situation; and he is disgusted with himself for not having successfully resolved the issue. The seller has divorced himself from the property. In his mind, he no longer owns it. When this mindset occurs, then the seller is open to a ridiculously low offer. BTW, most sellers who have property scheduled for tax sale have this mindset.

It is silly to offer $200 if the offer was made without information about what the seller needed, or what the seller was trying to accomplish. You don’t just say, “I’ll give you $200 for this $100K property.” That is a slap in the face. You must, must, must know the circumstances surrounding the tax delinquent’s situation. IF THE TAX DELINQUENT IS DESPERATE, then you can offer a ridiculously low number. Your example did not show any desperation in the situation.

Anything lower than a full price offer requires a good explanation as to why you offered that amount, if you have any hope of it being accepted. “The tax sale is in a few hours and I have not had any time to investigate anything about the property. I’m very sorry. It may be OK, but, for example, the property could have significant title issues; or something about the neighborhood might not be desirable. The company policy is to do a thorough investigation before buying an asset and we can’t do that in this case. I’m sure you understand. In order to protect ourselves, the only thing we can do is to offer you a small, token amount, like $200.” This is almost verbatim, what I said to buy a $40K house for $100, just hours prior to the tax auction. I later sold the home for $87K.

Use the $1 Option

The essence of using Coach Mitch’s “famous $1 Option.”™ is that: “I don’t want to pay you the amount that you ask, but, as long as I can make a few bucks, I will be happy to try and find someone else who will.”

Using the $1 Option is a great way to give a proud tax delinquent what he wants. Remember, to get what you want, the seller has to get what he wants; therefore, Coach Mitch says, – Just say, “Yes.”™

See Coach Mitch’s “Ridiculously Simple System…” ™ for details.

Is this more clear?

Mitchell Goldstein - Coach Mitch
518-439-6100 until midnight EST
www.CoachMitch.com