Have you ever been asked a question that seemed like it was too easy to answer Yes or No? Maybe something simple, but the person asking has done their homework and knows what your response will be. It's an uncomfortable position for sure because no matter how many times we ask ourselves if this deal would work out in our favor, there are always clear red flags waving around us, warning of danger ahead.
Sometimes when people come knocking at my door with questions about buying notes I am selling on behalf of other investors, one thing I have noticed is just how much thought goes into each word spoken before any words leave someone's mouth - so as not to let anything slip up. And for such a question, rather than giving your note seller a direct answer right away, you must reply to them in such a way that it adjourns the question yet leaves them satisfied with the answer. What you can say goes something along the lines of…
‘I need you to give me information so that I can supply you with some options because the fair market value of your note is quite a bit dependent on a couple of variables. So, do you mind if I ask you some brief questions about the property you sold and the note?’
Now let’s elaborate what each part of the above line means:
Supply you with some options; everyone likes to have more options open for themselves. Your note seller may also even tell you that they are not interested in a partial. But, it is quite beneficial for you to provide a partial quote to your note seller. Also, a lot of sellers often agree on partials.
Fair Market Value
When you talk about a fair market value to the note seller, it tells them that you will treat them fairly by providing them with a fair amount for the property.
Dependent on a couple of variables
People always look at the positive side; therefore, in the beginning, they normally assume that their note is a great one. But every note might have some variables that are good and some that are bad. It doesn’t mean the entire note is regarded as bad. You can use the good points of the note when you quote a deal.
Navigating the Market: Understanding Property and Note Questions
Any seller would like to talk about themselves and wouldn’t say no to you. Besides, they will understand that it is important for you to have some information about what you are about to buy.
Even after this, if your seller is insistent about getting a quote without giving you the appropriate information, you can carry out one of the two plans mentioned below:
Tell the seller that you want to sell a car and ask them what price can they pay for it. It is obvious that they will ask you about the type of car and the model. This is where you tell them that you can’t provide that information. Similarly, since you will be paying for the note, you need to know some details about it so that you can get the most amount for the seller.
Normally, this plan works out, but if it doesn’t, you can move to the next plan:
All you need to say to the seller is that you need details about the note because, without any specifics, you will not be able to get them an accurate number. And since they have a great note, it is important to get some details in order to get good value for it.
These two tactics always work during negotiation. What you really need to do is create a win-win situation during the conversation.
The question is quite a witty one. And it better not be answered right away with a simple yes or no. A good answer to this would be, ‘That’s an excellent question and I am glad you asked!’ This gives the note seller time for some thought before going any further in the conversation; after all, they are just as interested in getting full value for their note as you are. Confidence on your part will go a long way towards establishing trust between the two of you during negotiations which can lead to more successful deals down the road. All of these things mean that there is never just one answer when someone asks if they can get full value for their notes.