Tips on Negotiating With The Seller

Negotiations are the focus point of any wholesale deal. This is the part that makes the new found property a deal. This is also the part where many new wholesalers get cold feet. Negotiating the price and terms of the new found property with the seller is where the the whole deal gets packaged up and ready for the next level... the sale.

When you are about to negotiate the price and terms of the property with the seller remember...

1. Always stay in control of the deal.
you have already run the numbers to get the MAO (Maximum Allowable Offer) and therefore you know what price you are willing to pay for the property. Explain why you are offering such a low price for the property to the seller. (repairs needed, current market conditions, ARV etc...) Stick to the price that you know will move the deal from you to an end buyer. Remember if you are not embarrassed by your offer than you offered to much.

2. Do not get emotional when meeting with the seller!
As a Wholesaler you will come in contact with many sellers that are in desperate situations, are dealing with a job loss or health issue or even some that are very intimidating and come off very arogant about what they are expecting to get out of the deal. Leave your emotions at home when dealing with sellers. If you get to involved in the Drama you might agree to pay more than your MAO and this will leave you holding a wholesale deal that you cannot move to an end buyer.

3. He who bids first loses!
Never be the first to name a price for a property. Always get the seller to name the first figure. You might say "If I offer you all cash and close in 30 days what is the least you will take". They may ask you to name the price you will pay but always figure out a way to turn it back around to the seller. Why? Because you might give a price that is actually higher than what the seller had in mind. Now who just lost?

4. Always be upfront about your intentions!
If you plan on wholesaling the property let the seller know that you are going to present the contract to your "Network Buyers". Let them know that you may not be the one they are going to settlement with. I believe in being honest. I have seen to many wholesalers get to the settlement table only to walk away with no cash because the seller walked out feeling deceived. Remember everything gets exposed at settlement.

5. A Deal Should Be a win, win, win!
Let the seller know that you are there to help them not cheat them out of their home. Answer any of the questions that they may have. If you don't know the answer than tell them you will find it for them. This goes for the buyer as well. Wholesaling a property should be a win, win, win for the seller, the wholesaler and the buyer. Your reputation as a Wholesaler depends on it.

Written by Carol Stinson. All rights reserved.

For the next wholesaling step check out Assigning A Property To Another Buyer