Entry by Paula Bean

HELP Needed with Response to Email - Out of Town Buyer

I often get more "out of area" emails more so than local, and have diligently been trying to come up with a "consulting" response for these people.

Since I'm between web sites, and other life altering events, can anyone help with a response back to someone like this? It is also difficult to deal
with Merv's SmartPlan when I can't meet them face to face.

Here is the email I received, thoughts anyone?

>>>Hi Paula,

I was looking to invest in properties in Avalon Park Condominium and/or Harbor Beach Condos and was wondering if you can provide some insight since you work the Orlando area.

They are near each other and Avalon Park Condominiums, I believe is going for around 129k and Harbor Beach Condos(2 bedroom) for around 197k.

What are the other surrounding developments going for in comparison to these and how much appreciation do you see over the next 1-3 years?

Thanks for any info.>>>>

THEN he gives me his number and email address. It would take me HOURS to do this research, and not only that, his pricing is way off since all the
buyers or investors think people are giving their properties away now (especially condo's). I don't want to offend him, but I need some verbiage that
works along the lines of " I would be happy to help you, here is what I charge...yada yada yada" Most often when I do this, if they are out of town
(which this guy is out of STATE) I don't hear back from a large percentage of them. They move on to the agents who will work for free, cross their
fingers and hope they buy something months down the road.

ps - I don't like working with buyers much anyway, refer most of them out, so need a "plan A" talk about consulting, and a Plan B talk about referring.

Put your thinking caps on and lets brainstorm because I'm sure I can't be the only one that has out of town people wanting to buy stuff for 5 cents on the dollar ;-)

9 Comments

I am so glad you posted this Paula!

Being the most affordable market in the country, I am constantly getting calls and emails from investors wanting a good deal.

When they find out that $20,000 property should be "dozed" they are gone - never to be heard from again! Or they come to town and I have wasted considerable time educating them on the fact that a $20K property is still on the market for very good reason!

I certainly look forward to seeing what everyone suggests!

Betty

Betty, are you having foreclosure/reo/shortsale issue too?

It is just a little different to try explaining all of this on the phone to out of State people. Face to face, and with my laptop and using the SmartPlan, no problem. . .
but a good 90% of my business is not local.

I think Bill and a few others work in a 2nd home market as well. I'm interested in how they do this the easy way ;-) I'm not saying it doesn't work, I just want to increase my percentages.

In my market we have so many agents that will just tell someone anything they want to hear to get their business, because that brings in another several transactions.

I just won't lie to them, but when I check the MLS, sure enough, there they will be, listed for $100K more than they will ever sell for. I think that should be a Realtor Code of Ethics violation where you lose your license, but all that happens here is a pat on the hand with a feather and a stern look....

I use an Excel Spread sheet and send a sample without names on a real property I have used in recent past. I explain to them about the necessity of considering actual performance on and of investment income properties.

We review their goals and their actual projected personal use and equate that value to a dollar amount they might spend on a vacation property if they rented one elsewhere. I use a very conservative income increase amount annually and a very conservative appreciation percentage - 2-3 towards 5 if in a great neighborhood and has an elevator and home theater room already (nicely current amenities).

Having this stuff in file will actually take only minutes to throw together... coupled with some serious qualifying questions and needs and wants questions. I throw it in a verbose well written email and send it off to see how they respond in writing (email) or on the live phone call... where I am my best! I am good at blowing the socks off potentials because I never miss a trick (good line of knowledge and BS ;-O). It all comes from experience.

Once I do my evaluating, I then determine if I am going to follow traditional commission orientation or offer my Consulting model in the form it exists. Keep in mind our investment properties have income that can and is equated to a gross cap rate - i.e. = 1,000,000 sales price - grosses 75k-80k in annual income. Of course there are expenses, but then it is close to the Beach - Smiling.

Oh, by the way, If you know of anyone who might like this type of return with long term strong appreciation potential, don't hesitate to seek out a nice referral check by presenting me with the opportunity to serve your clients well! Shameless Promotion!

Bill Holt - Referral Link - Web Site - http://www.obxmls.com - On The Outer Banks, NC - Presently only 38 degrees and blowing its ___ off and freezing! But it is the Beach in February - We all perceive ourselves more successful than we actual are - LOL -- Bill@obxmls.com

My one cents worth is that you don't sell yourself over the phone or through email - you give them enough info about yourself that they don't have a clue as to what you do, they just know you are different and did not try to hard sell them.

Statements like "I don't know if I can help you with your particular situation without getting to know more about your particular situation . If I can't help you, I can give you the name of someone that is qualified to help you out". "Is that fair?".

Then he says "no, that's not fair" and we can all go home.

Paula, I moved here from Naples; whatever that has to say for itself. I guess just read between the lines. By the way, I'm not nuts (certifiably), just nutty. My Mother-in-Law and daughter live her so I was told we were moving here. There.

Paula,

It's a hard question. I have experienced much a similar response when people asked me for a "free" CMA in the past. I have been struggling with this and have not found a satisfactory answer. I used to do the CMA and send them the information. This used to take a lot of time, and I got very few listings, despite all of my work.

Thus, I changed my initial email to them, and included a request to view their home. I wanted to weed out the "tire kickers." Most of these folks I never heard from again, but those that did respond positively I usually was able to establish a relationship and get an appointment to view their home and get the listing. I think the reason I didn't hear from most of them was that I requested a visit to their home. If they weren't serious about selling, then I never heard back.

Following is part of my new CMA email initial response (I usually custoomize this to respond to whatever information they gave me when they wrote to me):

"Thank you for your inquiry and for visiting my website. I would be happy to do a Comparative Market Analysis for you with no obligation on your part.

"As you may know, a Comparative Market Analysis involves comparing your home with other similar homes in your neighborhood which have sold in the past 6 months to determine approximate current market value. This will take some research and calculations. In addition, price often depends on the amenities found in the home, which I could best determine by viewing your home.

"If you are planning to put it on the market, I would welcome the opportunity to meet with you and preview your home. We can discuss in more detail what it might sell for and what services I could provide for marketing it.

"If you are just curious as to what homes in your area are selling for, you might visit my MLS search website at http://www.NWArkansasHomeSearch.com (direct link). Just do a "search by subdivision" and enter the name of your subdivision to see what homes are on the market now and at what price they are listed. I also have "new on market" and "weekly home sales" pages on my website at http://www.judyluna.com (at the left of my homepage under Articles and Links) where you can see new listings and recent home sales by subdivision in the major NW Arkansas towns.

"Thanks again. I look forward to hearing from you as to when would be most convenient to meet."

One possible solution I have come up with is to provide them with some limited information in my first response. I spend about 15 minutes or so doing a rough search for solds in their neighborhood and give them a range of prices. Then I give them the rest of the above email. This has proven to be more effective and I get a better response.

You might want to try to do something similar. Give them some small portion of what they are asking for and ask them for more specific information. If they don't respond, you haven't spent huge amounts of time on them. But the carrot you did give may prompt a response. This is the beginning of establishing a relationship with them and reeling them in as a client.

If they do respond, give them a little more, based on what they tell you and then briefly describe your services. I'm not sure if I would send my rate sheet at this point. I might indicate that I work as a consultant and charge an hourly (or whatever) rate for services such as they are requesting and that if they do decide to use my services, this money would be credited to them upon their purchase of a home.

It's hard to do all of this by email. Email is essentially an impersonal vehicle, so you need to be careful what you say. But the essence of our business is to establish relationships, so you need to do this before you really get to the nitty gritty.

I hope this helps.

Judy Luna

Over the years (25+ in this business) I've made it a policy to NEVER discuss what I charge without having a really good idea of the prospect's situation, what they're really looking for, what kind of work, time and expertise would be involved on my part, and a pretty fair assessment of THEM as well. To me, the reason is simple...people DO BELIEVE WE ARE "COMMODITIES" AND PRICE SHOP! At least they do until they become educated to the contrary. And frankly, I've never wanted to be lumped in that category. So, the concept of "here's what I do, here's what I charge" is pretty foreign to me.

That being said, and Paula I do know how you hate working with buyers, it sounded from what you said that your prospect is already armed with INCORRECT information and is making initial judgments on things that simply are not true. If I had received such an email, my initial response would be to:


1) Check MLS for the developments he mentioned and pull up actives, expired/cancelleds, solds for a simple high price, low price, average days on market for each. This is NOT so I have info to send to him...just to give myself ammunition to speak intelligently about something he THINKS he has the skinny on. I want to be armed with the facts, and if the facts are contrary to his beliefs, so much the better. Imprinting him with the notion that he "doesn't know it all" after all helps to raise your value in his eyes.

2) Since he offered a phone number as well as email address, I would call to introduce myself ASAP and to, if appropriate, schedule a call with him to find out what his needs are and whether I might be able to help him... ie: to "qualify" him. What are his objectives with these condos in Florida, has he ever invested in property before, what does he know about the investment process and local requirements in Florida, does he know which complexes DO NOT PERMIT NON-RESIDENT OWNERS (here in Chicago, there are a lot of them that don't), where did he get the pricing information he shared, is he currently working with an agent and if so, does he have an exclusive arrangement with that agent. Is he planning to come to Florida to look at property or is he planning to buy sight unseen? What are his expectations of an agent? Is he planning on hiring an agent? (Good place to offer to send him a Buyer Needs Analysis to help define his expectations!)

3) Inasmuch as he's out of state, and depending on the answers he gives and whether I want to spend any more time with him/on him, or take him on as a client, I'd explain how I work and the options of how I can get paid. We would discuss those options, and if he's interested in representation, I'd email him the appropriate paperwork.

4) I would NOT email him any information about complexes until we had an appropriate agreement, although I would be willing to verbally share with him the general results of my initial review. Any "real effort" on my part requires a commitment of some sort on his.

When we speak, even though his objective is to get information from me, MY objective is to find out what he really wants, whether what he wants is something I can help him with, and whether I want to work with him as a client. If in fact the information he already has is INACCURATE, I'd say something like "You mentioned that complex A is selling for $X, and that complex B is going for $Y. I'm curious as to how you arrived at those numbers?" Has he been talking with other agents? Does he HAVE an agent that he's just trying to compare to someone else? Is he getting the info online himself (what site/s have been used)? I want to "diplomatically" let him know that in order to make prudent decisions, he needs to start off with valid information.

By the way, I found it interesting that he's looking for your take on APPRECIATION for the SHORT TERM (which, in my book, is what 1-3 years is). If his thinking is that he can buy low now, rent it out and sell in 1-3 years at a profit, I think he's all wet. With prices dropping to varying degrees in much of the country, certainly in many parts of Florida, there's the possibility the prices MAY continue to decline for at least SOME of that time. I'd just laugh and tell him if I had THAT crystal ball, I'd be rich.

Good luck!

JudiB

Judy L. and JudiB -

I really appreciate your responses to Paula's query...

I like the way Judy L handles a CMA request. I actually removed the CMA request from my website and replaced it with a "market review" which I think I want to tweak a little more:
www.athomeinkokomo.com/content/article.html/1545590

I was getting so resentful of putting in all that time and energy and not even an acknowledgement that they received the info, let alone a thank you or an appointment! Many of the requests were simply to figure out what to ask for the homes as a FSBO!

JudiB, excellent questions!

I'm going to pose another scenario to the group - definitely related to this topic in another post. Hopefully I will get some suggestions.

Thanks again Judy and Judi!

Betty

Suggestions please...

This is a very common occurance around here:

Phone call from out of town investor - keep in mind that we have a lot of properties on the market for less than $20K.

Call usually starts out with an inquiry about a property we have listed. Of course they have no idea about the town and desireable/undesireable areas - all they see is a bargain for less than $20K.

I spend a little time on the phone educating them about the fact that a home at that price is most likely uninhabitable, there could be resale issues, etc. I have no problem with this.

What I do have a problem with and what I am not sure how to handle is the next step in their query...

They have been on eBay and found a house for $16K. Now they want to know where that house fits into all we've been talking about.

I end up giving away "free" information - there is a reason they are on eBay at that price!!!! (That's the only way they can unload them!)

This page contains a single entry by Paula Bean published on February 21, 2008 11:22 AM.

Hud Paper Trail - Rebate? was the previous entry in this blog.

Avoiding Foreclosure is the next entry in this blog.

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