Soliciting Home Owner

[serendipity]

Hi All,

This is a little off topic.  I am wondering if anyone could share some experiences/tips on soliciting owners of properties not on the market.  We have a few properties in mind (fixer uppers on real estate we like) that we would like to try this strategy on and am just looking for some do's and don'ts.  These properties are not, to the best of my knowledge, in forclosure situations or in an unpaid taxes situaton.   What is the best way to approach these people?  Letter/phone call/in person?  How do you start the bidding?  At assessed value?  At a given percentage above assessed?  What are people's experience with this?  How do you "sell" it to them that this might be a good approach?  Any info is appreciated...

 

[Frank]

I've done it several times with success.  I always use the personal approach, but never start with do you 'want to sell your property'. 

In one situation I had a friend approach the individual (with no intention of buying), but the base price was established through that excercise.  A few months later when I approached the owner they were more anxious to sell - after my friend didn't come back to the table.  Whatever works best for you - you have nothing to lose.   Do some homework first - just like a tax sale - inform yourself as to how much the owner paid for it, and what mortgages they have on it by doing a search first, you will also discover their age and marital status (in one case I observed that the person's wife had left him several year's earlier - and it was a cottage property which he had discontinued using, no fun without the wife I guess, hence he was a motivated seller). 

People are usually impressed as well with cash deals that have very short closings - the gleam of the green catches their eye.  Don't be afraid to give them a large downpayment (with a properly executed agreement of course), that ready cash can also serve as an appetizer. 

[speedfreeksteve]

While I haven't been as fortunate as Frank, I too have seen more than a handful of deals go down by either word of mouth or someone deciding to sell when they see cash.

This is very common in rural and northern areas. Up around my cottage I usually know about at least 3 properties for sale at any given time that are not officially listed and never will be. Some people just don't have the knowledge or motivation to go through the hassle of contacting a real estate agent, or placing an ad. Some also have the often mistaken perception that a real estate agent will make them end up with less money in the end.

[Frank]

Right on Speed

The other thing to look for is hidden possibilities with the property.  Often times the current owner is unaware of  the full potential.  In many cases you might find out before hand that the property can be split, or that with a simple improvement to it can be made more valuable.  Look at the neighbourhood and see what is going on, that will give you come indication - also check with the local planning division as to exactly what the rules are pertaining to this property. 

I have a friend who puchased a property near bancroft and made more than he paid for it by selling the timber rights to a logging company.  Quick profit and he still owns it.

[serendipity]

Thanks for the info guys.  Frank, you say you never start off by saying "do you want to sell your property"?  If that's not the case what do you do?  Do you knock on the door and comment on their garden shed, truck on blocks in the front yard, or dazzling display of crab grass?  I say that tongue in cheek but how do actually get to that point?  I was initially going to send a letter and then follow up with a knock on the door to introduce myself.  I just don't know how to get to them with the least amount of suspicion.  Frankly if someone came to my door and offered a price my immediate response would be to get a current appraisal and if i was interesed in selling to consider an agent and get priced accordingly.

[Frank]

commenting on the crab grass won't do it.  You might express some interest in the truck, or just ask if they have seen your lost puppy, then tell them that you think this is such a lovely neighbourhood and you would love to live here.   Suddenly, their eyes open wide and they say hey maybe we'll through in the house with the truck for the right price.  Oh yeah, well what might the right price be -you ask.   ........get the picture (don't forget to bring your checkbook).   Point is you need an ice-breaker.

[serendipity]

thanks frank.  good points.  i just wouldn't want them to see through a veiled attempt.  you would have to be very sincere in asking about a lost puppy for example and i am not good at stuff like that.  i would have thought that being forthright would be the best course of action.  what are the disadvantages of asking outright or sending a letter and then dropping in?

the situation i have is a home in a neighbourhood that has newer estate size properties in excess of 425k (current figures).  in the older section of this neighbourhood there are 40 year old 950 sqft side splits in various states of disrepair.  some are starting to be renovated but very few.  the potential i believe is tremendous.  the house i'm interested in is in rough shape from what i can see and was purchased by the current owner for under 200k 2 years ago.  it abutts a property twice it's size with a beautiful new home.  it looks odd at the moment with this property in disrepair and junk strewn about.  it appears the current owners are not motivated or take much pride in ownership.  this lack of motivation on one hand scares me to thinking that these people just wouldn't be up for a move.  on the other hand they may be less likely to get off their butts to list and money may talk.  i just think the actual lot itself is amazing.  oh what to do...

[stever]

Recently i was in the same position...there is a couple of houses im interested in (the lot more then the house), i just knocked on the door with my name and phone number, the first person had company over and invited me in to see the place ( i apoligised and just left my phone number) the second person also invited me in and took me for the tour, i was there probably an hour....as i was leaving he said make me an offer, i wasnt prepared for that so i said i would call him back. The following day he wasnt as interested in getting an offer. I asked him to keep my number and if he decides to sell in the near future to call me......I hope he calls!!
steve