Education Disguised as Failure

Recently I've been selling (attempting to sell) some of these properties using auctions (technically open-bid sales...). The most recent 2 auctions didn't go as well as I had hoped.

The first was an auction in Portsmouth which was a new area for me, but just over the tracks from Chesapeake, so I felt that I was familiar enough with the area to get the sale made. This was just days after my first 5 figure paycheck sale so I was feeling like I could do no wrong.

Wrong.


After review, I have come to the following conclusions about my errors.

• Bought it too high. I buy these pretty properties on option to purchase contracts so there is very little risk to me financially other than the $10 that I put up for the option fee (should i put down $11 since my company is 11 Dal Sale? T thinks so...) and anything i put into $marketing$ the property. Because of the low risk, I have felt able to offer more for the property. WRONG. I can offer up to .80 on the dollar (most investor offers are .65 or lower), but on this one I was at .90!...
  
• Not enough time to market the property. I generally spend about $600 on mailers to the neighborhood. My biggest paycheck to date came from one of my $1000 postcards and this auction was on short notice. This ties back to the notion that the auction strategy for selling a house creates such a buzz that signs alone can generate enough interest to sell the property. Wrong again. The combination of mail, signs and buyers' list creates the volume of lookers to find a buyer.
  
• Not getting the full story from the seller. I am eager. I want to make money. But at the same time I am also in this business to help people. I genuinely feel like I have something of a calling to use this information and skill in real estate to help people out of their financial troubles. I can't help them if I allow them to skirt the truth by taking their patty-cake answers and not asking the tough questions.
  

I came to this final realization this afternoon when, a month after the auction (failure?), the seller called to say that he was in default on his loan and needed me to come back and do another auction. This time he would take anything above the loan amount of $120k.

It turned out that he was already a month behind on pmts when we talked in May. I JUST DIDN'T ASK THE QUESTION! Now he's in a bad way and is reaching out to me to help. I'm going to do what I can, but with my own relocation on the near horizon, there's only so much I can do...

In one of our phone conversations, Dan Doran told me something that really struck home. He told me to get really good at getting to the heart of the matter with sellers. Get past the monetary reason for selling their home and find the real reason for them to sell in a real estate market like this. "If you don't" he said, "you'll never really to much good for anyone. If you don't dig deep enough you won't have the conviction to really help them, and will just end up wasting their time."

I thought I understood this when he said it. I thought it rang true with me. It still rings true, but I understand the deeper meaning after my conversation with Mr. Seller in Portsmouth. See, if I had asked the hard questions back then and gotten the house sold back in May, he wouldn't be in the bind he's in right now. I could have helped him and not just tried my best but come up short.

I guess you could say I feel educated. But at the seller's expense.

Jerry Maguire: I am out here for you. You don't know what it's like to be ME out here for YOU. It is an up-at-dawn, pride-swallowing siege that I will never fully tell you about, ok?

Just Help me help you.

Help me,
Help You.