Offers 2 Owners that Work  (CFFL 359)

Offers 2 Owners that Work

Jack Butala: Offers 2 Owners that Work. 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:                            Happy Thursday.

Jack Butala:                         Yeah. Welcome to our show today. It’s almost Christmas.

Jill DeWit:                            I know.

Jack Butala:                         I forgot about that.

Jill DeWit:                            I know. I’m so excited.

Jack Butala:                         In this episode, Jill and I talk about offers to owners that actually work and ones that don’t. I love this topic. 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. Ray asked, “I noticed after sending my first mailer that some of the lots are listed on the MLS for sale. Can we buy these without going through the agent? What if the seller doesn’t disclose that it’s listed and we don’t know this fact?”. Can I make a comment first?

Jack Butala:                         Yeah. Sure.

Jill DeWit:                            You don’t need no stinking agent, by the way. That’s a whole nother show and a whole nother topic but every time it comes up I want to go, “Uh!”.

Jack Butala:                         It’s not in another episode. It’s a whole additional show, that Jill and I have planned.

Jill DeWit:                            Yeah.

Jack Butala:                         Real estate agents … In the list of least trustworthy professions …. I looked this up recently. There are three professions on this planet, where just the general opinion out there, whether it’s right or wrong, I don’t care but this is a fact.

Jill DeWit:                            Mm-hmm (affirmative). It’s negative.

Jack Butala:                         It’s extremely negative. Number one, politicians. Nobody trusts them for a lot of reasons. Right?

Jill DeWit:                            Right.

Jack Butala:                         Number two, car salesmen. Number three, real estate agents.

Jill DeWit:                            Yep. So we had a whole breakfast the other morning, and this is a little spoiler alert that we are throwing out a new topic for a new show and that’s a lot of it. It’s going to be around, you don’t need an agent to do this stuff. People even come to us often and I see it in BiggerPockets. What do you mean you’re an investor? Don’t you need to be a broker and have a broker’s license to do this stuff? No, you don’t. It’s like … for sale by owner. I’m buying my own asset. I’m selling my own asset. I’m not representing anyone. People don’t know that you can do this and it’s not crazy and it’s not hard.

Jack Butala:                         There are some things that residential real estate agents do, the good ones, that are extremely valuable. The vast majority that I’ve ever met are a total waste of time.

Jill DeWit:                            I know.

Jack Butala:                         It’s ridiculous how much money they charge.

Jill DeWit:                            I concur.

Jack Butala:                         If you’re buying and selling like we do, there’s two ends of the transaction, you’re going to spend 12 to 18 percent of the whole transaction value on your stinking agent. It’s all because they have access to the MLS and you don’t. Well guess what? There’s something called the internet now.

Jill DeWit:                            Exactly.

Jack Butala:                         There’s people like Jill and I who are creating whole companies where you can input six pieces of information and get all of it out for $50 instead of 30 or 40 or $50,000 …

Jill DeWit:                            Exactly.

Jack Butala:                         … that it costs to sell a house. If I sound angry, it’s because I am. It’s a pile of crap.

Jill DeWit:                            Jack and I, we’re going down that path of changing the way people buy and sell real estate now.

Jack Butala:                         That’s exactly right.

Jill DeWit:                            We’re not messing around.

Jack Butala:                         You do not need a real estate agent to sell your stinking house.

Jill DeWit:                            You don’t.

Jack Butala:                         You should never be paying that kind of money. It’s ridiculous.

Jill DeWit:                            There are some good ones. You know what? That’s the reality. If you ask any good real estate agent, too, by the way, they will say, “Oh yeah. There’s so many idiots in my world, it’s not even funny.” They will admit that.

Jack Butala:                         My little sister is an extremely successful real estate agent in northern Michigan and it’s because she provides a level of customer service and unique style, I think, to people selling their houses that … That’s what it takes. Like, staging.

Jill DeWit:                            Yeah.

Jack Butala:                         That is a value that real estate agents can really give and none of them do.

Jill DeWit:                            By the way, those top three? Your little sister is a real estate agent and my little brother is a politician. I just had to throw that out there.

Jack Butala:                         Oh, my gosh.

Jill DeWit:                            So we know of what we’re talking about.

Jack Butala:                         Do you know any car salesmen?

Jill DeWit:                            That’s the only thing we don’t have in the family. Thank goodness.

Jack Butala:                         Oh my gosh, Jill.

Jill DeWit:                            Isn’t that funny?

Jack Butala:                         I think your brother’s really straightforward, transparent.

Jill DeWit:                            He is trying to make a difference. He’s not a career politician.

Jack Butala:                         He started being a politician after he was independently wealthy.

Jill DeWit:                            Right.

Jack Butala:                         So he’s not in it for hosing people.

Jill DeWit:                            That’s the reality. Yeah. He went into this to be the non-politician politician and said, “Holy crap! It’s hard to get stuff done here. There’s a lot of politicians around.”

Jack Butala:                         Yeah.

Jill DeWit:                            Yeah. Whoops. Sorry. I swore.

Jack Butala:                         The vast majority of politicians are attorneys and I’ve never met an attorney who can do any math at all.

Jill DeWit:                            Very interesting.

Jack Butala:                         Before this last election I went and looked up the professions. There’s a bunch of places on the internet you can go. The professions of all of our presidents since George Washington.

Jill DeWit:                            Oh. Well now, that’s an interesting article.

Jack Butala:                         98 percent of them were attorneys. A few were military generals. A few were [inaudible 00:05:14] attorneys. A few were actors, like Ronald Reagan, and farmers. Very few.

Jill DeWit:                            Like, peanut farmers?

Jack Butala:                         Yeah. Exactly.

Jill DeWit:                            Got it. That’s very interesting.

Jack Butala:                         Or a Ronald Reagan actor.

Jill DeWit:                            You and I read very, very different material in our free time.

Jack Butala:                         That’s right.

Jill DeWit:                            That is not something I would’ve looked up.

Jack Butala:                         Anyway, we should probably answer this question.

Jill DeWit:                            Yeah. What were we talking about?

Jack Butala:                         Stupid MLS. All right, so …

Jill DeWit:                            Oh, gosh. Now you know, this is how we have a whole new show on it because we can’t stop talking about it.

Jack Butala:                         Did you know there’s no MLS for commercial real estate? There’s a reason for that. Generally people in commercial real estate are a little bit brighter than people in residential real estate, and they don’t want a single point of failure like that.

Jill DeWit:                            Exactly.

Jack Butala:                         They want to provide the customer service and the level for their clients that is required and I don’t put commercial real estate agents in this pile that we’re talking about, at all. I’m not talking about commercial people, because I used to be a commercial real estate agent.

Jill DeWit:                            It’s a different world.

Jack Butala:                         I’m talking about residential sell-your-primary-residence real estate agents.

Jill DeWit:                            Do you want to answer the question or do you want me to?

Jack Butala:                         Yeah. So this has happened to me many times over my career. Here’s how it works. When you list a property with an agent as a seller and an owner, the vast majority of the time it’s an exclusive relationship so regardless of how the buyer gets found, the agent gets paid. No matter if they work a ton of time or no time. They get paid. So my short answer to this, Ray, is pass. Pass on the deal. However, there’s nothing stopping you if it’s a smoking deal, but you’re going to have to deal with an agent. They’re going to send you one of those offers. The state-suggested quote, unquote offers that are 92 pages long and you’re going to have to sign it 50 places and sign your children away and the whole thing. Because that’s what agents do. They make everything complicated to justify their existence. If I sound angry, I am. So I would walk. You want to do this the way that Jill and I have set it up where you just … There’s an offer. I mean there’s an owner and a buyer, like you, and that’s it, and a single piece of paper purchase agreement that says, “I agree to buy, you agree to sell for this amount during this timeframe.”

Can you do this? Absolutely, you can do it. There are no rules that say … It’s just, now you got another person involved, and they’re not motivated like you are to negotiate the right price and terms and the whole thing.

Jill DeWit:                            Right. That’s the thing. Usually when there’s an agent involved, they … It’s funny because in our world, there’s not a lot of agents that really do get involved, because a lot of these properties are not worth that much and it’s not worth the agent’s time. A commission on $6,000 versus a commission on $600,000 are very different.

Jack Butala:                         That’s right.

Jill DeWit:                            So most agents are going to be like, “Pass!”. I haven’t talked about this in a while. I have some great relationships with some agents that-

Jack Butala:                         They send us deals.

Jill DeWit:                            Yeah. They found me years ago and so whenever any of these land deals, they just see them as not worth their time, come along, they just send them right to me. They just forward me the e-mails.

Jack Butala:                         We crack up about it around the office.

Jill DeWit:                            It’s great. I’m like-

Jack Butala:                         Jill’s sentence is, “Why don’t you just buy this thing?”.

Jill DeWit:                            That’s exactly it.

Jack Butala:                         If you bought and sold this piece of property, you would make more than the average amount of money that you make-

Jill DeWit:                            Yeah. Your commission.

Jack Butala:                         In commission on it. Not on this deal but really any deal.

Jill DeWit:                            They’re a little bit afraid of it. They’re like, “Oh no. It’s not my thing.”

Jack Butala:                         Yeah. It’s a totally different mindset.

Jill DeWit:                            That’s right. They think they don’t know how to deal with land. Yeah, you do. You’re dealing with property. It’s just price difference.

Jack Butala:                         Real estate agents, they all have a short list of escrow agents. By the way, escrow agents are my hero. They’re so underpaid for what they do. Real estate agents don’t know how to do deals. They would be dead in the water without an escrow agent. The good ones have great escrow agents behind them that you never … They do all the work.

Jill DeWit:                            Yep. You don’t need no stinking agent, but, the escrow people are good.

Jack Butala:                         You do need, and we have, escrow agents, and good ones.

Jill DeWit:                            They will solve problems.

Jack Butala:                         Yeah.

Jill DeWit:                            They do the work.

Jack Butala:                         Exactly. If you have a question or you’d like to be on the show, reach out to either one of us on LandAcademy.com. Today’s topic, this is the meat of the show, offers to owners that actually work and some that don’t. Go ahead.

Jill DeWit:                            Well, I had three things that I wanted to cover on this. One is the number of offers that you’re sending. The quantity of the offers is part of what makes it work. The quality of the offer, what’s in it, the meat of it, is what makes it work. Then how you handle it afterwards is what makes this work.

Jack Butala:                         Oh. That’s great.

Jill DeWit:                            Thank you.

Jack Butala:                         That was totally off my radar, the last piece.

Jill DeWit:                            Oh, good.

Jack Butala:                         That’s good.

Jill DeWit:                            Thank you. Before, during, and after.

Jack Butala:                         Okay. Good.

Jill DeWit:                            You like that?

Jack Butala:                         Before … Yes. This is perfect, Jill.

Jill DeWit:                            Before. That’s you. Okay.

Jack Butala:                         Before, you want to scrub data. You need access to a database and you need to scrub the right database. For example, every assessor’s tax roll that you pull out of RealQuest or wherever you’re getting your data, is going to have the U.S. government. The U.S. government owns this property. You do not want to send that. It’s actually wasting 50 cents. In the programs, I give pretty strong suggestions about what to scrub out of your data and what to keep in there, and in great form, some of our members completely do not listen to me, and they do great! They do great with it! What do you mean, take out the federal government? I just bought-

Jill DeWit:                            I bought from that bank. What are you talking about?

Jack Butala:                         Exactly. So there are strong suggestions and it’s stuff that works for us.

Jill DeWit:                            It’s true.

Jack Butala:                         So it’s getting the right data and scrubbing for whatever your personality type is. That’s before, and it’s imperative. If you’re buying a really cheap list on the internet, it’s probably cheap for a reason.

Jill DeWit:                            Or buying it from another person. Don’t do that.

Jack Butala:                         Or you get it directly from the county. It’s not the right way to do this. You need a PhD in data scrubbing.

Jill DeWit:                            You’re just wasting money. Because every county is going to be different.

Jack Butala:                         It’s all different and you’re not getting that data.

Jill DeWit:                            It’s taking you weeks instead of hours.

Jack Butala:                         You need the assessed value to do this properly and a lot of … Ironically, a lot of the direct county, direct data does not include that.

Jill DeWit:                            And the [inaudible 00:11:42] percentages.

Jack Butala:                         So there’s nine reasons … We’re not going to go into it today. There’s nine or nineteen reasons why you should never get data from the county.

Jill DeWit:                            Nine or nineteen.

Jack Butala:                         If you enjoy paying, go for it. If you like to get CDs in the mail, go for it. It’s not 1989.

Jill DeWit:                            All right. So that’s the before. You want to talk about the during now?

Jack Butala:                         Yeah.

Jill DeWit:                            Okay. So now I’m talking about offers that owners that work. What’s in the offer? It’s a good, respectable, two-page personalized legitimate offer.

Jack Butala:                         With a signature block where you signed it and you’d like the other person to sign it. The seller.

Jill DeWit:                            With clearly stating out your price, your terms, how it’s going to go down, all of that. Where to find you, stuff about your company because you are a real person, you’re a real company. Whatever it is. All of that’s in there. People, it’s not a postcard to, “Dear resident, call me. I want to talk about your house.” Mm-mmm (negative).

Hi, Mr. Smith. You don’t know me. This is my company. By the way, in case you’re wondering how I found you …

Jack Butala:                         This is my full name.

Jill DeWit:                            Yeah. This is all legal-

Jack Butala:                         This is my website.

Jill DeWit:                            This is all public information, if you want to include that.

Jack Butala:                         I understand that you own 40 acres in Nevada. In Pershing County, Nevada, and the APN is 123456XYZ.

Jill DeWit:                            I want to purchase your property for $3,500 and I can have a cashier’s check to you within 10 days upon receipt. Pending my due diligence …

Jack Butala:                         Pending my review of the property.

Jill DeWit:                            Exactly.

Jack Butala:                         So imagine if you got a letter. Almost all of us have cars, right? Imagine if you got a letter that said, “Dear Jack, I am interested in purchasing your 2007 silver 4Runner with about 122,000 miles on it for X amount of money.” That’s going to make you stop and really start thinking about, why does-

Jill DeWit:                            I don’t care what condition it is. I don’t care-

Jack Butala:                         Why does this guy know so much about this? How is he so organized? Here’s the take away from this part of it. I feel special. I feel like this guy must care to do all this research, send me a letter like this that’s respectful and it’s grammatically correct. You know what? I never thought about selling that car, but if the thing’s reasonable and obviously he’s going to send me a check. I mean, send me a cashier’s check and a notary person right to my house or my office? All of that combined, that’s not full retail value but, man, I don’t have to go clean it up. I don’t have to vacuum it anymore. You know what? I’m going to sell it! I’m tired of paying the fees on it every year. That’s exactly the thought process that you’re provoking when an owner opens the letter.

Jill DeWit:                            It’s not gimmicky. Please don’t put a dollar in there or do something silly like that. It doesn’t have to be on a yellow letter made to look like it’s hand written. No. It’s a real nice real offer.

Jack Butala:                         I joke about it, but what you’re sending is a love letter. You want to evoke the same kind of, “Oh my gosh. I feel special. This guy wrote me this letter and I think he really likes me. He knows all this stuff about me. He knows the color of my eyes.” That’s a little bit hokey, but you want to put some effort into it. Through a mail merge, is it practical to do this 1,500 times every month? No. That’s what mail merges are.

Jill DeWit:                            When you do that to a girl, by the way, now it’s really not love letter. It’s stalker, but anyway. [inaudible 00:15:39]. Could you imagine? “Hey Jill. I know you’re 5 6 and you have brown eyes and woo! I want to take you to dinner on Tuesday, pending my review of your backside.” I want to make sure you still weigh what’s on your driver’s license.

Jack Butala:                         Pending a review of your bust size … and your mood that night.

Jill DeWit:                            Exactly. Oh my gosh.

Jack Butala:                         Jesus, Jill. Take something beautiful like a love letter and make it all-

Jill DeWit:                            I tried to … I’m sorry. You know, Jack? I love you but that whole mail merge love letter thing … I can’t quite wrap my head around that one, but okay. The car, I love.

Jack Butala:                         My point is, don’t send trash. Do it right. That’s why you get such a high yield.

Jill DeWit:                            Kay. Now the after.

Jack Butala:                         Yeah.

Jill DeWit:                            Kay. So the after is …

Jack Butala:                         You’re the after expert.

Jill DeWit:                            Answer the phone! Call him back. Be respectable and if you want to buy it-

Jack Butala:                         Respectful.

Jill DeWit:                            Respectful. Thank you. Respectable-fuble. I’m making up my own words now.

Jack Butala:                         Manage your bottom size, for God’s sake.

Jill DeWit:                            That’s right. Jeez. What you put on your driver’s license, make that be your real weight. Your real height. Isn’t that funny how they never check that?

Jack Butala:                         Have a respectable bottom size.

Jill DeWit:                            Shoot. I’m going to do that. I’m going to put it on my- Next time I go get a license I’m going to say I’m 6 foot and see if that passes. I bet I could get that through.

Jack Butala:                         Former super model.

Jill DeWit:                            No one pays attention. So anyway, that’s so funny. Follow through, do what you say you’re going to do, and if you don’t want the property for any reason, just say, “You know what? I did my review. It doesn’t meet my criteria right now. Gosh. Maybe someday I’ll circle back around. I wish you all the best.”

Jack Butala:                         Or it doesn’t have the access that we expect, so the $3,500 offer that we actually thought about … I’d love it at 2,000, but at 35, I just … That’s probably what I’m going to sell it for.

Jill DeWit:                            Yeah. I just can’t do it.

Jack Butala:                         Or just walk. I don’t think you should use that as a negotiation tactic, but sometimes that’s just the truth, and they know that. If they don’t, you can send them a couple of screen shots on Google Earth and say, “I’m sure you’ve never been to this property and I don’t think any human being has every been to this property. That’s how hard it is to get it, so … I love it at a thousand bucks or whatever. I can move it at a thousand but I’m going to have to fully disclose all this stuff and I don’t think you’re going to use it anyway now.

Jill DeWit:                            I know when you bought it they said they were going to put a shopping mall next door, but here’s an aerial shot. They didn’t do it.

Jack Butala:                         There’s a whole section of Imperial County, California that was used for bombing tests. So if you go there … We don’t send mail out to Imperial County anymore, ever, because there’s a lot of bombing range real estate there.

Jill DeWit:                            There’s a crater on your property. I don’t know if you know that.

Jack Butala:                         Well you used to have property there.

Jill DeWit:                            The elevation changed by about 500 feet!

Jack Butala:                         I learned that the hard way, by the way.

Jill DeWit:                            That’s pretty funny. Yeah. Those trees that were around there? Yeah. They’re not there anymore. Okay.

Jack Butala:                         Yeah. So manage the deal flow on the way in and show the same respect that you did when you sent the letter. There was a time that … Now we have a whole staff, but there was a time when I only did deals where they signed them and sent them back. If there’s any negotiation at all, I said no. If people were calling multiple times because they needed the money, I’d kill the deal. So I don’t know if we have any members that are that crazy about it, but, if you send enough mail out like we do, you can pull that off.

Jill DeWit:                            Mm-hmm (affirmative). Just pick the best ones.

Jack Butala:                         Right. The slam dunks. That’s called the low hanging fruit.

Jill DeWit:                            That’s what works.

Jack Butala:                         So that’s what works. People say, “What’s the secret?”. That’s it.

Jill DeWit:                            That’s it.

Jack Butala:                         Those are the secrets right there for free.

Jill DeWit:                            Now you got it.

Jack Butala:                         Now you need the data.

Jill DeWit:                            Exactly. We can help.

Jack Butala:                         Which is what we sell. We don’t sell stupid stuff. We sell the tools you need. The data and the relationship with the best printer on the planet, in my opinion, and the cheapest.

Jill DeWit:                            Exactly, and we worked hard to get it at rates where we’re saving everybody time and saving everybody money.

Jack Butala:                         It’s half, about half, of what-

Jill DeWit:                            Oh, I think it’s less than half.

Jack Butala:                         Of what you would spend if you walked in off the street.

Jill DeWit:                            It’s less than half.

Jack Butala:                         [inaudible 00:20:17] created for all of us here.

Jill DeWit:                            Because there’s tools that we provide that you can’t get on your own.

Jack Butala:                         That’s right.

Jill DeWit:                            Nope. You just can’t do it.

Jack Butala:                         Join us in another episode where Jack and Jill discuss how to use information. That’s me.

Jill DeWit:                            And inspiration. That’s me.

Jack Butala:                         To get just about anything you want.

Jill DeWit:                            We use it every day to buy property for half of what it’s worth and sell it immediately.

Jack Butala:                         You are not alone in sending offers to owners that work.

You’re cracking me up, man. This bust size thing.

Jill DeWit:                            You said the bust size. I said the backside size. The bust … That’s funny how you heard something totally different than what I said.

Jack Butala:                         Bust. Backside.

Jill DeWit:                            I said backside, weight on your driver’s license, height.

Jack Butala:                         It’s all beautiful stuff.

Jill DeWit:                            That kind of thing.

Jack Butala:                         [inaudible 00:21:04] love notes, by the way, but you’re not interested in getting any so that’s fine.

Jill DeWit:                            How many are you sending out? If you send a hundred offers to a hundred girls, one of them is going to call you back.

Jack Butala:                         That’s right.

Jill DeWit:                            I bet you, right?

Jack Butala:                         No. I know that’s exactly what’s going on.

Jill DeWit:                            Oh. Excuse me. Have you tested this?

Jack Butala:                         No, and it’s not so much that [inaudible 00:21:23] and maybe that’s the [inaudible 00:21:24] girl you want. We don’t know, but the whole thing is, you caught her on the right day and that’s what happens with these owners. Maybe tomorrow she’s going to say, “No freaking way.”

Jill DeWit:                            Exactly. He called me back. Nevermind. We’re back together.

Jack Butala:                         Did you ever have somebody break up with somebody and you say something like this, “That guy was an asshole anyway.” Then they get back together the next week and it’s like, “Oh, all this bad stuff.”

Jill DeWit:                            Oh yeah. Know what I was just thinking about? You were talking about offers to girls. I bet the offer … If you send a hundred letters to a hundred girls, two will contact you back. Now reverse, if I sent a hundred letters to a hundred guys-

Jack Butala:                         Oh, Jesus.

Jill DeWit:                            50 would call me back.

Jack Butala:                         No. I think 80.

Jill DeWit:                            With no photo.

Jack Butala:                         There’s a business here somehow. I’ll get back to you on that.

Jill DeWit:                            This doesn’t sound legal.

Jack Butala:                         Information and inspiration to buy undervalued property.

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