In Part 1 of this series we talked about the lessons learned when my personal Client was negotiating with the seller to buy the house. Now with the house under contract – it was time to get it sold.

What I recommend to all my Clients when wholesaling a property is to build a list of buyers; build trust and rapport; send out sufficient information about the deal so that an interested investor could literally make a buying decision right from their desk.

My Client is just beginning to build his list so we advertised on many different internet sites driving all traffic back to his web page about the deal. Bam! He found a buyer and went under contract to assign the deal to him.

Unfortunately, just before closing, the buyer notifies my guy that he doesn’t have the funds to close. No way around it. And now the contract with the Seller was about to expire. My Client was sure the deal was lost at this late hour.

Luckily, though, he had followed my advice and collected $2,000 non-refundable earnest money deposit. What I have discovered over the years is that most real estate problems can be solved with time and money. In this case what do we need? More time. Who can give us more time? The seller. Why would the seller give us more time? To get money. I had my Client apologize to the seller for the missed deadline and offer $1,000 to restore her faith and extend the contract 30 days. This is totally an extra $1,000 to be paid right now – not additional earnest money – not paid IF the house closes. It is paid right now as soon as she signs; which of course she did right away.

He continued to advertise to his small list and on the internet sites I suggested. This time around, nothing happened. He continued to send out emails and advertise and finally he had someone offer that could put down half of the purchase up front, but needed two months for the balance. We pursued this buyer further, but then his ability to have the balance in 2 months became questionable.

At the same time, the Seller was getting anxious about getting to the end of the closing period. Finally she threatened that she had another buyer and if a closing date wasn’t set immediately, she would go with the other buyer. My guy was devastated, but I told him it is not over yet.

Something in her story just did not ring true. My advice: call her bluff. Tell her that you are having problems getting investors interested in the deal. If she needs to take the other buyers offer you understand – and if not you’d be happy to keep working to find an investor for your deal. Not only did she agree to work with him – she agreed to drop the price if that would help get it closed! Never under-estimate the power of a strong motivation!

We continued the marketing and the original buyer came back and said that he could do half down and make monthly payments on the balance over 12 months. Perfect. We just needed the seller on board. The approach: tell her what is in it for her. She would get a significant cash down payment at closing (remember, my Client’s Assignment Fee needed to come out of the initial down payment). She would receive large monthly payments AND she would not have to reduce her price. She would be done with the house by the following week, and not have any further expenses.

She jumped at the offer. Here’s the kicker. We offered that we would stay involved in the deal and IF anything went wrong with the payments we would foreclose on the buyer, make the payments to her, and we would re-sell the house.

                                           OR

We could turn it all over to her, and IF the Buyer did not make the payments she could foreclose, re-sell the house and SHE could keep the additional profits. Guess which she chose? That’s right, she decided to handle everything herself.

Closing was set up for a few days later. My Client had already received his Assignment Fee, and the seller received her down payment and became a mortgage holder for the balance.

So here are the lessons learned on the sale…
• You need a strong buyers’ list so that if one flakes out you have plenty of back-up buyers
• Always collect a large dollar non-refundable earnest money deposit to ensure the buyer will close – and if not – you have other options
• Most real estate problems can be resolved with time and/or money
• When you are working with a truly motivated seller, they will work with you to get the house closed
• When negotiating or presenting alternative proposals remember to answer the question in their head WIIFM (What’s In It For Me?) Your buyers and sellers don’t care what your proposal will do for you – they only care about how it benefits them.
• Be tenacious. Start with a belief that there is always an answer and keep pushing through. My Client was ready to throw in the towel numerous times, but I kept pushing him and we closed! Don’t give up. Look for the alternative answer.

I can usually close deals that others can’t and it’s because I refuse to give up. I believe there is always another way – I just have to be creative – and that creativity is why the deals close!

Like I’ve said before: Yamato Damashi! Never Say Die!

In Part 3 I’m going to discuss the most significant trait to develop in order to close more deals.

Expect abundance,

Lou Castillo

P.S. Want to become one of my personal Clients and work together for a year? Send me an email at Lou@InvestorRiches.com and we’ll set up a time to talk and see how I can help you grow your real estate investing company.