Where to Draw the Line with Seller Sob Stories

As investors who buy homes directly from motivated sellers, we are usually listening to a seller’s sad story. It is important to know where to “draw the line.” What we mean is, some of us are strictly business and don’t even flinch at the saddest of stories. If the numbers don’t work, “Sorry. Try another investor.”

Others of us want to move these folks in with us and help them start over or consider buying their home and letting them rent it back with future plans to buy it back. Few of us can master being somewhere in between, let’s call it the “middleman.”

Here’s a recent example of what we’re talking about

A woman called every ad in the book, including us. She was actually crying as she her story that went like this: She was being evicted from her trailer park on Friday, and she called us on Thursday with only one day to spare. She owned a 40-year old, one-bedroom mobile home free and clear that needed work, and she was behind in her lot rent.

This property does not meet our “buy” criteria. She was desperately seeking a quick sale that day, so she could bail herself out and move into an apartment. Knowing we couldn’t buy the place, we made her aware of that and asked her if she had a job, a place to go, first & last, etc.

After further conversation, we learned that she was working, but had no money to move into an apartment and needed someplace to move more than anything. Yes, we were sympathetic. We tried to place her in a boarding house where tenants don’t need security deposits, credit checks, or a lease.

When faced with no other options of a place to live, she turned down the boarding house because it didn’t allow pets. She has two cats she wasn’t willing to leave with a friend in the meantime. It was hard to believe that someone crying on the other end of the phone, begging for a solution wasn’t willing to be flexible when faced with no other choices.

Two different approaches

The strictly business view of this situation is that she called on deadline day, has no other expenses but $280 in lot rent, has a job, yet still gets behind to the tune of $2,000. And when offered a place to go–with no other options–it doesn’t meet her criteria? Good luck lady!

The big-hearted view of this situation is: Wow! She’s crying, and now we’re crying too! We have to help out! No, we don’t buy trailers and are allergic to cats, but there’s gotta be something we can do in the four hours left in the day. I know, she can move in to my shed!

These are the two extremes, but we’re making a point here–neither investor is going to create win/win situations, and that’s the most important thing you can do in this business. When we go on appointments, it’s funny because one of us is more “business,” and the other is more like a friend.

The business type is thinking that the owner’s story sounds sad and although sympathetic, doesn’t tend to relay it, but goes straight for the deal. The friend type consoles the homeowner and must remember to get all the details on the deal. While one says “Oh, that’s so sad,” the other is saying, “So, what do you owe?”

Offer help without wasting your resources

It makes for a good team, but when we are solo, we have to make sure to express compassion and get all the details. Even when we can’t win, we try to help the homeowner by offering solutions. A great way to do this in your area is to find out about local charity organizations and who they help.

See how you can work with the charities to refer families in need. Likewise, they can refer situations to you where you can help. We have learned the types of organizations and housing availabilities in our area. And when we can’t profit from a deal, we can still offer the sellers the help they may need.

We make business decisions and don’t waste time or money doing it. When we can’t make a deal, we can still help by listening, offering consolation and compassion, and offering advice and referrals of places that can actually help these homeowners.

Take ten minutes to screen by phone

Here is one important strategy we use to avoid wasting time or money: We get a lot of phone calls from our marketing, and when a seller calls, we determine if a “deal” exists for us or not before we go out for a visit. If the seller is not motivated, there is no reason for a visit.

Many new investors are so excited that they’ve received a call, they immediately set an appointment, but once at the seller’s home, they find that there is no deal. What a waste of time and money. It’s one reason why so many new investors get frustrated so quickly. They aren’t taking ten minutes to have a conversation first.

Be sure to learn to be a middleman–compassionate, yet discerning. Find a charity; don’t be one. And create win/win situations on every deal. This is your living. Do it right–and know where to draw the line!

About the Author:

[ic_add_posts ids=’9562′ template=’author_template.php’]

By CREOnline Contributor

A content contributor to the original CREOnline.com.