Sending Offers to Owners for Too Much (CFFL 349)

Sending Offers to Owners for Too Much

Jack Butala: Sending Offers to Owners for Too Much. Leave us your feedback for this podcast on iTunes and get the free ebook at landacademy.com, you don’t even have to read it. Thanks for listening.

Jack Butala: Jack Butala with Jill DeWit.
Jill DeWit: Hello.
Jack Butala: Welcome to our show today.
Jill DeWit: Thank you. I’m happy to be here.
Jack Butala: In this episode, Jill and I talk about sending offers to owners for too much money. I made a mistake in my offering, and what’s going to happen next.
Jill DeWit: Oops.
Jack Butala: Before we get into it, let’s take a question posted by one of our members on the landacademy.com online community. It’s free.
Jill DeWit: Okay. Pat asks this question. It’s a good question. “What is a deed of conveyance? The seller showed me his deed named deed of conveyance with no warranties expressed. Is this the same as a quick claim deed?” Awesome question. Do you mind if I jump in Pat? Pat? Jack? What’s your name?
Jack Butala: “Who’s that guy?”
Jill DeWit: I know.
Jack Butala: “Who the hell is that guy in my life?”
Jill DeWit: Hey you, do you mind if I go? All right.
Jack Butala: You know what this reminds me of? That story that one of our friends was telling us recently that they sent their kid to school for the first time and they’d been calling them cutie for so long, he didn’t even know his name was, whatever.
Jill DeWit: Exactly.
Jack Butala: Isn’t that funny?
Jill DeWit: Yeah. There was some situation where he was running the wrong direction or something, and everybody’s calling him and he didn’t turn around, so they sent him home with a note pinned on him that said, “Your kid doesn’t know his name.” It’s like they call him a nickname.
Jack Butala: Yeah, like cutie or something. Who knows?
Jill DeWit: Something like that.
Jack Butala: Yeah, because he’s little.
Jill DeWit: Honey, sweetie, whatever, and yeah, he didn’t know his name.
Jack Butala: Why is this so funny?
Jill DeWit: I don’t know, that’s so funny. We’ve done that.
Jack Butala: Stuff like that can happen so easy.
Jill DeWit: With our number one, number two, number three, we even as we’re talking and they’re sitting right there, “Well ask number three.” I don’t know. Number three, if I said, “Hey number three,” I bet he would turn around.
Jack Butala: She would for sure know that.
Jill DeWit: Yeah. It’s really good.
Jack Butala: Anyway.
Jill DeWit: Okay, back to the question. I looked up the, I wanted to give the real definition here too.
Jack Butala: Versus the stuff that we usually talk about in this show.
Jill DeWit: Exactly. I’m going to really kid of keep it to business here today. The definitely of a deed of conveyance is a signed legal document that shows a title or deed has been transferred.
Jack Butala: It’s a proof of ownership document.
Jill DeWit: Yep. It’s used to prove ownership on a piece of property. The interesting thing is, just like a real deed, a deed of conveyance is signed, witnessed, and notarized by the seller and the buyer, as well as anyone with invested interested in the property being transferred. It’s like a second copy of the real deed. Maybe the person was, for tax purposes, or maybe they’re working on a loan or something. I don’t know. They had to prove ownership and come up with a supporting document to prove ownership on the property. Instead of going to get the real deed, they just went and signed a deed of conveyance showing that, here’s proof that I am an owner or I do own this asset, however it is.
Jack Butala: Doesn’t that seem redundant to you?
Jill DeWit: It does. For whatever reason, they couldn’t get their hands on the original one, and that’s okay.
Jack Butala: There’s a few reasons that could happen, it was destroyed. Let’s say there was a fire at the county, and there’s no more proof of this document at all. Is that likely? No. This whole thing makes me a little, this is a red flag for me.
Jill DeWit: This is very true. The question is, is it the same as a quick claim deed, and the answer’s no.
Jack Butala: No. No, it’s nothing-
Jill DeWit: Because a quick claim deed-
Jack Butala: Is a deed.
Jill DeWit: … really does transfer ownership.
Jack Butala: It conveys.
Jill DeWit: That’s the thing. A deed of conveyance does not convey or change anything at all. It is basically a duplicate of whatever the original deed was, and it doesn’t have to say on there, it was a quick claim deed how we got here, or it was a special warranty deed how we got here, or a grant deed. It doesn’t say any of that. It’s just proving that a deed of conveyance did happen at one time, and I’m either a buyer, or seller, or whatever. Like you said Jack, why is this person running around with just this deed of conveyance. Okay, I get it. I’m going to do my homework. It may all be legitimate, and they lost it. Maybe dad had it in his safe, and who knows where it went.
Jack Butala: There’s all kinds of that.
Jill DeWit: That’s okay.
Jack Butala: A real quick lookup on RealQuest or Title Pro-
Jill DeWit: And you’ll have the answer. You’ll do that. Great, great question. Now you know. It’s one of these things that for Pat, now you will always know what that is.
Jack Butala: I will never forget it, personally. Full disclosure, Jill and I, before the show, we had to look this up.
Jill DeWit: Yeah. I’m like, “I don’t ever see those.”
Jack Butala: I’ve never seen it.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: Never heard of it. That’s pretty unusual.
Jill DeWit: Exactly. Most people are carrying around the real deed, the still have it, or a copy. They’ve got something, or they have nothing, and I go get a copy of it, and that’s okay. By the way, I want to make one little point here. When you’re buying a property from someone, they do not have to produce that original document to you or have you see it. If you’re buying a property from Mr. Smith, and he doesn’t even know where the deed is, that’s okay. You don’t have to have it. You don’t ever have to see it. It’s not like a pink slip where you have to have the real deal when you’re doing the car.
Jack Butala: Yeah, that’s right.
Jill DeWit: This is something I don’t think we’ve talked about before.
Jack Butala: Where does pink slip come from? I’m a car guy.
Jill DeWit: It used to be pink, wasn’t it? It used to be in triplicate. I really think that there was white, yellow, pink. Seriously, years ago it was in triplicate the old way that you would write with carbon, and the pink one is the one that you kept around in your car.
Jack Butala: Oh Jill, I’ve always wondered that.
Jill DeWit: Thank you.
Jack Butala: I learned two things on the show today.
Jill DeWit: There’s a reason you have me around.
Jack Butala: Jill’s wearing street clothes.
Jill DeWit: Street clothes. What’s that?
Jack Butala: This is what Jill’s, oh no, not like that.
Jill DeWit: Okay.
Jack Butala: Not street walker clothes.
Jill DeWit: Hello. What the heck?
Jack Butala: No, like jeans and a jersey that a baseball player would practice in, but she’s got diamonds all over herself. It’s pretty funny actually. I should take a picture.
Jill DeWit: That’s why you were saying that earlier. Thank you. I have a hat on.
Jack Butala: Yeah, a baseball hat.
Jill DeWit: Thank you. Good question, and I’m glad you asked that.
Jack Butala: Excuse me. If you have a question or you want to be on the show, reach out to either one of us on landacademy.com. Today’s topic, sending offers to owners for too much money. You misvalued the property that you wanted to purchase, and you got 700 million offers back. Is this a good thing or a bad thing? We’ll talk about it in a second. This is the meat of the show. What do you think Jill? Good or bad?
Jill DeWit: I thought it was kind of funny, because I’m like, you could read this title and go, “Am I supposed to do it this way?” No, no, we’re not promoting you want to send offers to owners for too much.
Jack Butala: Yeah. We’re in the business of buying property for less, and then selling it for more. Buy low, sell high.
Jill DeWit: Does this happen sometimes? Hmm, let’s just think about this. You’re starting out, this is all new to you, are you going to make a mistake or two on your first couple mailers? Heck yeah. Have we done that? Heck yeah. Have we overpriced? Heck yeah. Have we really under-priced? Heck yeah. Especially if you’re doing that many at a time and you’re doing it right, you’re not looking at each individual asset, you’re doing a batch. You’re doing all these five acre properties, you’ve sorted it to the best, and not your offers are out there, and then you’re going to field them. Is it a bad thing? I don’t think so.
Jack Butala: It’s a good, healthy, honest mistake, and nine times out of ten, when something like this happens, you can salvage at least one or two deals out of it. You want to be real careful about it, but you can salvage some stuff.
Jill DeWit: You’re going to get a lot of signed offers back, which is going to be, you know what? You get a lot of singed offers back and that’s great, because you know what? You still smoked out who’s interested in selling.
Jack Butala: Jill, I went into the show not even thinking about that. I know what you’re going to say. Go ahead. I love this. This is brilliant. This is brilliant.
Jill DeWit: I have this captive audience of people that are actually considering this now, because there’s plenty of people out there that it doesn’t matter what price you offer them, they don’t want to sell. That’s their cabin, it’s their family property, it’s not their thing, you’re not going to hear from them. But, now you just smoked out people who are interested in selling. Now, it’s how you handle it from this point forward. Do you want to call them back and negotiate it? Do you want to send them another offer? “Based on your further review,” and that, and then smoke them out one more time, because your response rate now is going to be pretty darn, your [inaudible 00:08:18] rate is going to be pretty darn high.
Jack Butala: It’s going to be crazy high. It’s going to be 50%.
Jill DeWit: This could be a tactic for somebody now that I think about it.
Jack Butala: I know. I was just thinking the same thing, but you don’t want to do dishonest stuff and sneaky stuff, but to salvage an honest mistake, that’s not sneaky. If you did it the next time with intent, I would wonder about that.
Jill DeWit: What would I personally do? You want to know?
Jack Butala: Yeah.
Jill DeWit: I’d line them all up, I’d put them all in order and do my homework here. Say I’m staring at a hundred, I would put them all in order and start doing my due diligence on them, and the ones I really like, I’m going to call them back, and we’re going to make a joke out of it a little bit, but with respect.
Jack Butala: By the way, by the way, each person who gets an offer the way that we send it, they think that they’re the only one who got an offer. They don’t know there’s 99 other people who Jill’s going to call later that day. They just think, the way it’s worded, we want to buy that property, and only you, yours.
Jill DeWit: Right. I’m going to call them back and say, “Hey, you know what,” in a nice way, “After doing my homework, I goofed and here’s what I’d like to do. I appreciate your replying back, and I appreciate your interest in selling the property. I’m prepared to do this, and boy, I’ll have a check to you on Tuesday,” and leave it at that. You don’t have to go into more information. What you want to do in these situations is where I come in, and talking to the people, state it, and don’t say a word. “I goofed. I’ve done my homework now. I am still interested in your property. I apologize about that price. I’m really prepared to spend X. Everything else is the same, I will have a cashier’s check to you and a notary on Tuesday. Does that work for you?” Then let them think about it.
Jack Butala: I love it.
Jill DeWit: If they need to think about it. I have no problem too, in this situation, if they say, “Ah shucks. My wife and I were really counting on this, and I was really [inaudible 00:10:14] that.” I’d say, “You know what? I get it, and boy, I apologize. Why don’t you guys think about it? Give me a call tomorrow. Sleep on it, and like I said, I’ll have a cashier’s check to you. I’m not messing around, and we’ll do it.”
Jack Butala: Exactly. It’s so interesting.
Jill DeWit: Then you’ll have a different response.
Jack Butala: I wrote the title to this, and it’s so interesting that Jill came at that the way that she just did, because that’s really not what this show, what I thought this was going to be about, but, no, no seriously. You really get two for the price of one.
Jill DeWit: Thank you.
Jack Butala: Now I’m going to cover it how I would cover it, but man, it didn’t even cross my mind, and I think that’s perfectly okay what you said.
Jill DeWit: Thank you.
Jack Butala: I think a bunch of deals are going to come out of it.
Jill DeWit: Yeah. You still might get some stuff. Okay, I want to hear what you originally intended. Thank Jack.
Jack Butala: I was just going to explain how and why this can happen from a data standpoint and a data scrubbing standpoint, and I’ll apologize in advance if this is so boring you just want to die. Let’s say you’re going to send a mailer out or an offer campaign out to all the owners of a five acre property in a given county, I don’t know, it’s Latimer County Oklahoma. I’m just throwing one out, I don’t know. You look at it and there’s a lot of properties. Maybe one end of the county’s really flat like prairie and plains, maybe one’s really heavily wooded with rolling hills, and it’s beautiful, so they’re priced really differently.
How the hell do you find out, how do you make different prices? What we use is called an index map. At some point, at various geographic points throughout this county, there are certain predictable groups of APN numbers, assessor’s parcel numbers. Let’s say there’s an area of 100, there’s an area of 103, 107, 108, 109, and that’s the first part of the APN number in a very long string of numbers. Is this clear so far? If you send out the exact same dollar amounts every single one of these APN schemes, or these APN data sets, you’re going to end up offering too little in one are and too much in another area.
This is advanced data scrubbing. You want to really take a look at an index map that outlines the geographic boundaries of a county, and see where APN scheme 103 ends and where it starts, where 104 ends and starts, and price it accordingly, do different types of research all over the internet for pricing. That’s advanced, that’s one of the reason, all this stuff gets discussed in an incredible amount of detail, not discussed, but we show you how to do it. So why it’s so important to have a good data set and get real good fresh data because you’re just wasting your time if you’re buying substandard data.
Jill DeWit: Exactly.
Jack Butala: That’s probably what happened here. Again, Jill’s nailed it. Don’t worry, stuff happens. If I’m making it sound complicated, it’s really not. Right. Here’s what you do. It’s all in a spreadsheet. Let’s say there’s 10,000 properties. If the APN scheme is 101, you decide it’s $500 for a five acre property there, then you just put in the slot, you put 500. For the next set, 102, you put 1,000, for 108, oh that’s in the city, we don’t even want to send that at all. We’re not buying city property this time, 113, that looks like it’s worth a lot more, 2,500.
Jill DeWit: Do you know what’s so interesting? I hear people that have poor results doing this, because they think that by just getting a list of all the ownership data, all the ownership information, and all the five acre parcels in X, Y, Z county, that they can just blindly send them out, and if it doesn’t come back with a response, they’re like, “Oh, well this doesn’t work,” because there’s more to it than just that.
Jack Butala: Do people do that?
Jill DeWit: Yeah. I know they do.
Jack Butala: That hasn’t gotten to me.
Jill DeWit: Yeah.
Jack Butala: That specific. That’s a waste of postage.
Jill DeWit: I know. That’s my whole thing. I’ve had so many people come to me and go, “This doesn’t work. I tried it.”
Jack Butala: Really? They say, “This doesn’t work,” like that?
Jill DeWit: Not necessarily. I read it in other groups and things like that. Some of it’s in bigger pockets. It’s like people are spreading, they think it’s a no-brainer, all I got to do is get the data and hit all the five acre people, and throw them this offer, right? No, hang on a moment. There’s a little more to it.
Jack Butala: I see what you’re saying. In bigger pockets, yeah. I’ve never heard our group members.
Jill DeWit: No, not our, oh, not our group, not our people. I apologize. It’s just, it’s people who are trying to understand this concept, and do this, and send offers, they don’t realize that there’s some research that goes in it like you just said. If you really want to do this right, and have a really good, high strike percentage and good stuff coming back, then you’re going to spend a little more time, like you just described Jack, and be methodical, and it’s not crazy.
Jack Butala: Yeah. It doesn’t take that much time anyway. Here’s some comforting points. Once you do one, and you figure out the kinks, just like anything, the first time you kiss a girl, you’re going to get better at it the more you do it. It’s the same thing. This is the good news. This is part of it. We don’t talk about this enough. When you get data from a resource, you’re accessing a database, not a list. It’s in the exact same format for every single county, so once you learn how to do it for one county, you’ve learned how to do it for every county in the country.
Jill DeWit: Excuse me, through our data.
Jack Butala: Through RealQuest, RealQuest Pro.
Jill DeWit: Okay, yeah, yeah, yeah, because not every county’s the same automatically.
Jack Butala: If you’re getting it directly from the county, the data, it’s all different, every single county, it takes them hours, sometimes days to figure it out.
Jill DeWit: Sometimes weeks. I’ve heard it be weeks.
Jack Butala: Yeah. Do it once, do it right, learn how to do it right, pay for the data, it’s not that much more expensive than the stupid silly cheap stuff on the internet, and it’s going to be fine.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: I’ve done exactly what this person has, or where this question came from, and the next time you do it, you really learn the right way.
Jill DeWit: Exactly.
Jack Butala: You know what’s worse? Is doing it for way too low, and you just get a bunch of really angry people calling for weeks.
Jill DeWit: I know.
Jack Butala: Too high is better than too low.
Jill DeWit: Too high’s better than too low, but can you still recover from too low?
Jack Butala: Yeah, because you always get something signed.
Jill DeWit: I know.
Jack Butala: Some people make that their business model.
Jill DeWit: You know what? That’s the funniest thing too, because there’s some that we’ve gone back and I’m like, “What the heck? They agreed to that? Oops.”
Jack Butala: I’ve purchased property by making a massive mistake from sending it to all urban properties instead of rural, and it still gets done.
Jill DeWit: You know, it’s a common thing, and with our community too, our members. We kind of laugh about it now, but they say, “Yeah, they guy called me out. He was all upset, and then I said, “I’m so sorry. Thank you. Have a nice day. They guy’s saying, “Well hey, don’t hang up. Hang on a moment. That doesn’t mean I don’t want to sell, I just won’t,” and then we talk about it. Then they all laugh.
Jack Butala: Then you appropriately price it so you’re still making some money.
Jill DeWit: Yeah. “Oh I’m sorry. I meant this.” What would it do? Okay. There we go. It’s okay.
Jack Butala: There’s no such thing as negative attention in this business.
Jill DeWit: Join us in another episode where Jack and I discuss how to use information, that’s Jack-
Jack Butala: That’s me, and inspiration, that’s Jill-
Jill DeWit: … to get just about anything you want.
Jack Butala: We use it everyday to buy property for half of what it’s worth, and sell it immediately.
Jill DeWit: You are not alone in your mailer offer real estate ambition.
Jack Butala: Another good show. It was out of the mainstream of what we kind of talk about recording deeds and stuff.
Jill DeWit: It’s a lot of good information.
Jack Butala: Yeah.
Jill DeWit: So much good information. I think that we probably helped a lot of people with that one, and I’m glad.
Jack Butala: Information and inspiration to buy undervalued property.

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