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Knocking on Doors.

August 3, 2018 / Comments (0)

Knocking on Doors

A lot of students ask me if I knock on doors and to that question I say a profound YES! However, I only knock on 12 doors at a time. Let’s look for a moment at those 12 doors you knocked on and the conversation you had with them.

Three “Active on the market” For Sale

These sellers are paramount in your research as they will tell you things about obsolescence and what minimum standards the house you’re looking to buy has to meet.

When you knock on their door introduce yourself as someone who is looking to buy in the neighborhood and who may have an interest in their house.

I caution you not to take too much time in this research by aking a full presentation to a seller and thus become late to your scheduled appointment. You should just ask the seller of the house you’re in if you can come back once you’re done viewing the house around the corner.

Here are the few questions you will be asking the sellers and why to ask them:

Is this a safe neighborhood for young families, children and older people?

You want to get a feel for how secure the neighborhood is. Always remember, just because you don’t feel it’s a safe neighborhood doesn’t mean the people who live there feel the same way. Never assume anything in real estate and don’t let your personal biases affect your decisions.

Has the neighborhood changed recently?

You want to find out what isn’t being talked about by the seller of your subject property. Are there noisy neighbors? Is there a bully on the block? Or are there drug dealers hanging out on the corner? Do they now think they paid too much?

Will you be offering any concessions to the buyer?

This will tell you who is going to finance any needed repairs, which as we mentioned earlier, will directly affect your estimate of Worth Value. Or maybe they are willing to help the buyer with their closing costs. You are looking for anything that reduces the Worth Value.

How did you set this sales price and are you offering any special terms?

You want to know this because it will tell you how motivated the seller is and whether or not this house is something you may have the opportunity to purchase. Understanding the seller’s motivation is crucial in determining Worth Value. Some sellers just put a price on a house and hope they win the lottery. You will want to know if the competition is in fantasy land or reality land.

Why are you selling?

If, during the last four questions, this question wasn’t answered by the seller, it will be important to ask so you have a clear picture of the motivation. I ask it last because by then I have built enough rapport with the seller that they tend to be freer with the truth.

The three “Just Sold” in the neighborhood

Here are the questions to ask and why to ask them:

Is this a safe neighborhood for young families, children and older people?

You want to get a feel for how secure the neighborhood is. Always remember, just because you don’t feel it’s a safe neighborhood doesn’t mean the people who live there feel the same way. Never assume anything in real estate and don’t let your personal biases affect your decisions.

Have you found anything negative about the neighborhood that you weren’t aware of before you moved in?

You want to find out what isn’t being talked about by the seller of your subject property. Are there noisy neighbors? Is there a bully on the block? Or are there drug dealers hanging out on the corner? Do they now think they paid too much?

Was there a lot of work done by the seller on the house, which was included in the sale price?

This will tell you who financed any needed repairs, which will directly affect your estimate of Worth Value. If the $185,000 they paid for the house included $35,000 of repairs done by the seller, the actual Worth Value of the comp is $150,000, which changes the calculation of the Worth Value of your subject house.

What about this house made you buy it?

You want to know this because it will tell you what buyers are looking for and why this particular house stood out. Maybe your subject property has some of the same features and you can push those features when you turn it around and want to sell it. You may want to up your Worth Value a bit on your subject property if it includes these desirable features.

Do you know of anyone looking to sell their house now?

This will give you free leads to call on. Don’t assume that because they are new to the neighborhood they haven’t had a chance to meet people. You can only gain from asking this question.

The six pack…

If you have time, you should also do a “six-pack” on the subject property. A six-pack is not six cans of beer. It is knocking on the two doors on either side of your subject property and the two houses across the street from it. A six-pack will reward you handsomely with determining the motivation of the seller, as well as giving you possible leads.

Here are the questions and script for this mini-interview:

Hi, my name is <your name>. I’m thinking of buying the house <next door/two doors down/across the street> and was wondering if you could answer a few questions for me.

What is the neighborhood like?

This will tell you if they love living there or hate living there, and either response is okay. If they say they hate living there, ask them if they are renting or if they own their home. IF THEY ARE THE OWNERS AND HATE LIVING THERE, TALK TO THEM ABOUT SELLING YOU THEIR HOUSE.

Is there anything about the owners of the house that I may need to know before I buy it?

They will spill the beans if they don’t like the neighbors and won’t say a word if they love them. It is worth asking. You are looking for the reason they are selling: divorce, job transfer, money problems, whatever it is. Out of the six-pack, chances are at least one “can” will be full of gossip. The more you can learn about the seller, the better prepared you will be when dealing with him, or her, and negotiating.

What kind of repairs do you think ought to be done to that house?

You might be surprised at how much the neighbors know about the house, and their opinions of it. You will probably hear more than you could possibly find out by visual inspection. It could range from things like what’s buried in the backyard to the fence being propped up by sticks.

Have the sellers lived there long?

You will already have this information from your property profile, but you are setting the neighbor up for your next question. Plus, you may find out information the profile doesn’t show. Maybe the family has lived there for years, but the profile shows a sale a year ago. Turns out it was a sale from one son to another and they both still live there. You can bet the sale price for that house isn’t a good one to base a Worth Value on.

Do you have any intention of selling soon? (or moving soon, if they are renters)

When you are ready to sell the subject property, after you buy it, you want to know if there will be another house right next door also for sale. If so, you probably want to be selling that house as well. Also, if the neighbor will be selling soon, that gives you some ammunition when making your offer on the subject property – it’s not like his is the only house you could buy.

If they are renters

How much are you paying for rent? If I could show you a way to live in the neighborhood and build towards home ownership for close to the same amount your spending on this house, would that be great? If they say “yes” they may be a perfect candidate to lease option the subject property you were there to see in the first place.

Last modified: September 5, 2018

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