To be GREEDY, or not to be GREEDY, that is the question!

Ok, so you have invested a lot of time and money going through Dean's courses, and followed his instructions to the tee. You have worked hard developing your Buyer's LIst, and finally started making offers.

Your first offer was rejected. So was your second. You don't get discouraged, you get determined. Your third and fourth offers were rejected too. Finally, on your twentieth offer, the seller accepts and you have your first deal, now what?

After a well deserved celebration, you sit down to think about your next step. Then it dawns on you, how much are you going to mark up your property?

Naturally you will think about the cost of getting to this point. Wouldn't it be nice to recapture the cost of Dean's courses? And how about all the hours I have tied up, shouldn't I be able to pay myself for the time spent? And then again, I'd sure like to pay off my car. And my spouse has put up with me working this "second job" for quite a while, don't we deserve a trip to Hawaii? And then there is my kids college fund that could use a contribution.

So, how much should you make on this deal?

I have two contradicting sayings that I always remember when I am at this point in a deal:

1. You can't get more than you ask.
2. Pigs get fat, hogs get slaughtered.

This is quite a dilemma: if you ask too much, none of your buyers will buy, but if you ask too little, you leave too much money on the table.

The other day I was coaching and received a call from someone in the program and he wanted to assign a contract where he was getting the property for $41K and wanted to assign it for $53K. That is nearly a 30% increase. I thought that such a high mark-up was excessive, but he didn't. I cautioned him about his pricing, but he felt confident that he could get it. Was he too greedy, or just a good negotiator?

This is where the importance of developing a good Buyer's List and knowing what your buyers want comes in. If you have a large list, you might be a little aggressive on your pricing when you present it to the first few buyers and if they reject it because of price, you can always lower it when you present it to the next group.
However, if you just have just a few buyers, you had better price it right so one of them will take it.

Remember, if you have just made the greatest deal in the world but you can't sell it to a buyer, you have made nothing. This is why it is so important to develop your Buyer's List and know what your buyers want. I always spend time with them to make sure I know what their criteria is when making a decision as to whether or not the will buy. Are they looking for a certain return, or only buying at a minimum discount to value? This will help you determine your mark up.

You are in this business for the long haul. It's ok to leave money on the table so that your buyers can make money too. If they do make money, they will buy from your again. If they don't, you have lost them and they are a one deal buyer.

Good luck!