It is important to learn and stay sharp as a real estate investor. Learning theory is great, but applying by doing is the best way to learn and retain. Here is the 2nd of a series of exercises that new and existing real estate investors must do to hone their craft. Sell an item on Craigslist for more than an item is worth and fast with favorable terms.
Sell an item on Craigslist – The goal here is to get people to fight over your item and bid up the price and get better terms. Just like when you sell an investment property. Market this property to maximize exposure, leads and offers then negotiate up the price, close quick and get favorable terms. There are a few tips I want you to try to create competition and achieve the goals. Find out how much the item is worth and post ads on Craigslist along with pictures and why this is the one the buyers should buy.
Try these tips:
- Advertise for a really low price like an auction – If the item is worth $200, advertise it for half or $100 OBO. In this exercise you should get a ton of offers. The response should be so overwhelming. Explaing that $100 is the starting bid and the best offer will take it. Continue to bid up the price until you get an offer(s) for what it is worth or in this case $200. If they are willing to pay more and pick it up now, it is their item. You will not only get more than it is worth, but good terms and a quick sale.
- Write a good ad – Include nice pictures as most buyers will be able to visualize it as there item. Tell them why it is the item they must buy such as: Perfect condition, barely used, like new, best item for the money, worth $X but selling for less. Put in false time constraints and create competition such as: Will go fast, yours if you can pick up within 2 days, if not bought in the next couple days I have a family member who wants it, was going to sell it for more to someone but did not want to drive an hour to them to drop it off, etc.
- Ask for more than it is worth and negotiate – This will work best on hot items with lots of demand. If the item is worth $300, list it for $400 and you are really motivated to sell this hot item. Write a good ad using what you learned from #2 above. If the best offer is $280, tell them you want $360. But tell them if they pick it up now you will sell it to them for $320 which is meeting in the middle. If they except, then you just sold it really fast for more than it is worth. They may try to negotiate you down, so let them negotiate you down to $300. Worst case, you still sell fast for what it is worth.
- Use the midpoint in negotiations – When negotiating put the amount you want as the midpoint in your negotiations. If they offer $200 and you want $250, ask them if they will pay $300. If they say no, either the buyer or you can ask to meet in the middle. Definitely ask them to come immediately. That way you get your price and terms fast.
- Sold my Jeep in one afternoon – I bought a Jeep for $6K and drove it for 4.5 years. At 144,000 miles it was overheating, needed new tires, a new catalytic convertor to pass e-check and many additional items where close to going wrong. Jeeps hold their value well and it was summer so everyone wants a convertible Wrangler for cheap. I used tip #1 and #2 and listed it low at $1500 and wrote a great ad with a good looking picture. I would have accepted anything around $1500. I received approximately 20 calls in an hour and had about 5 people coming to take a look. I do not advise this but I actually took the ad down because I was only able to answer about half of the calls, the other half went to voicemail. They were all bidding over my asking and I told a guy if he comes with $2000 cash now it is his. It was sold, as is in about 3 hours for $2K cash. Looking back on it now, I would have told the buyers due to the overwhelming demand and some research that I am going to list it for $3500. If they would go up to $3000 and come now it is there Jeep. They likely would refuse but would give me the max they would pay and maybe I could have gotten $2500. I was happy with $2K, but I learned from this experience.
- Surfboards – I upgraded my surfboard and sold my old ones. Both where nicked up but usable and perfect for beginners. I used tip #2 and #3. I wrote good ads and provided pictures. “Perfect surfboard for beginner for cheap”. I asked $100 for both and would have taken $40 for each which is all they were worth. I negotiated one guy up from $50 to $75 which is halfway and he came immediately. The other one I got an offer for $60 and took it since he came the same day.
- Still to come – An out of town friend wants me to sell his surfboard and what better way to keep my skills sharp. I also have some old bikes that are now expendable. I will post my results.
What you will learn
- Marketing techniques – Exposure is vital, you must market often, to the right target and with a message that will get them to inquire and make an offer. Maximize potential buyer leads.
- Negotiations and closing techniques – Create competition and use false time constraints to increase the sale price, get favorable terms and a quick sale. Use the midpoint when negotiating.
- How to write ads – Write compelling ads that make your ad stand out. The ad cannot blend in with the rest of the ads, it must stick out like a sore thumb. A well written ad will sell for more and faster than other ads for the same item. Tell them why it is the best and most important have an extremely engaging Ad Title to get them to read more. Finally, get them to contact you so you can engage negotiations. Leave a little teaser that will require them to contact, then engage in negotiations.
- Play the numbers game – The more interest and offers, the higher you can bid the price. Get exposure and as much interest and offers as possible. Then use that competition to negotiate a higher sales price, better terms and faster sale.
Comment and tell us about your results. Feel free to ask any questions before, during and after. This is an incredible exercise that will pay huge dividends to your business. Best of luck!