Most of the time when I initially talk to a seller, they ask for cash. However, many times I can use negotiating techniques I’ve learned to show them they really are open to other forms of payment.
First, I ask them what they plan on doing with the money. If they tell me they want to put the money in the bank, then I know they are looking for security because the money is guaranteed. However, they aren’t going to gain anything. In this case, they don’t understand money and how they will actually lose money by sitting in a bank savings account.
You have to face these roadblocks to get sellers to agree to seller financing terms:
- They don’t know if they can trust you to pay on time every month.
- They’re concerned about the property being destroyed by your tenants and if you don’t pay they are stuck with a damaged home.
- They have heard horror stories of people taking someone’s property but never doing what they said they would do.
If you can show an interest in what the seller really needs, you can start to show them that you are trustworthy. Show them receipts or statements of properties you’ve paid for on time as promised. Explain how they will make so much more money by not having to pay taxes on a big lump sum of cash.
Truly listen to the seller and determine what they need, whether it be enough money to live on each month, a certain amount to travel with, monthly income to pay their child’s college tuition, etc.. Then come up with creative ways to provide it to them.
If you’d like to get more tips on how to become a better real estate investor visit www.larryharbolt.com to register and get my free phone script on how to negotiate with sellers over the phone.