How I Estimate House Repair Costs Over the Phone with Homeowners (Quick & Easy Method!)

*In the fast-paced world of real estate investing, time is money. Driving to every property to assess repair costs can be a massive drain on your resources. That's why I've developed a quick and easy method to estimate house repair costs over the phone with homeowners. This approach not only saves time but also helps you gauge seller motivation and make the perfect offer, whether you're interested in seller financing, owner financing, or subject-to investing.*

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### **Why Over-the-Phone Repair Estimates Matter**

Estimating repair costs over the phone offers several advantages:

- **Efficiency**: Save time by focusing only on properties that meet your investment criteria.

- **Cost-Effective**: Reduce expenses associated with travel and on-site inspections.

- **Lead Qualification**: Quickly determine if a seller is motivated and if the deal is worth pursuing.

- **Negotiation Power**: Use the information gathered to negotiate better terms, such as taking over mortgage payments or setting up wraparound mortgages.

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### **Step-by-Step Guide to Estimating Repair Costs Over the Phone**

**1. Start with the Key Question**

Begin the conversation by asking:

*"What do you think needs to be done to get the house into top shape, Mr. Seller?"*

This open-ended question encourages the homeowner to share details about the property's condition.

**2. Listen Actively and Take Notes**

Pay close attention to the seller's responses. They might initially say the house is in great condition. That's your cue to delve deeper.

**3. Drill Down on Specifics**

Ask targeted questions about major components of the house:

- **Roof**:

  - "When was the roof last replaced?"

  - "Have you experienced any leaks or damages recently?"

- **HVAC System**:

  - "How old is the heating and cooling system?"

  - "Has it been serviced regularly?"

- **Foundation**:

  - "Are there any cracks or issues with the foundation?"

  - "Do doors and windows open and close smoothly?"

- **Plumbing and Electrical**:

  - "Any known plumbing leaks or electrical issues?"

  - "When was the last time these systems were updated?"

- **Interior and Exterior**:

  - "What condition are the kitchen and bathrooms in?"

  - "Does the exterior need painting or repairs?"

**4. Seek Precise Answers**

If the seller is vague, gently push for more precise information. For example:

- **Seller**: "The roof is a few years old."

- **You**: "Great! Was it replaced within the last 5 years, or is it older than that?"

**5. Identify Hidden Issues**

Sometimes, sellers might downplay problems. Look for red flags in their tone or hesitations, and ask follow-up questions accordingly.

**6. Calculate Estimated Repair Costs**

Based on the information gathered:

- Use standard cost estimates for repairs in your area.

- Consider creating a repair estimate template to streamline the process.

- Factor in both major and minor repairs to get a comprehensive estimate.

**7. Gauge Seller Motivation**

Their willingness to discuss repairs can indicate motivation levels:

- **Highly Motivated Sellers**: Openly share information and may admit the house needs work.

- **Less Motivated Sellers**: Evasive or dismissive about repair needs.

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### **Applying the Information to Craft the Perfect Offer**

With a clear understanding of the repair costs, you can:

- **Negotiate Price**: Use repair needs to justify a lower purchase price.

- **Propose Seller Financing**: If the seller is motivated but concerned about getting a fair price, offer seller financing or owner financing options.

- **Structure Creative Deals**:

  - **Subject-To Investing (SubTo)**: Take over existing mortgage payments, relieving the seller of their debt burden.

  - **Wraparound Mortgages**: Create a new mortgage that wraps around the existing one, offering flexible terms for both parties.

  - **Rent-to-Own Agreements**: Allow the buyer to rent the property with an option to purchase later, giving time to address repairs.

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### **Benefits for Real Estate Investors**

- **Save Time**: Focus on properties with serious potential without unnecessary site visits.

- **Increase Efficiency**: Handle more leads in less time, boosting your chances of closing deals.

- **Enhance Negotiation Skills**: Come prepared with facts to support your offers.

- **Expand Your Reach**: Use this method for out-of-town properties or when scaling your business.

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### **Tips for Successful Over-the-Phone Repair Estimates**

**1. Be Professional Yet Personable**

- Build rapport to make the seller comfortable sharing details.

- Use their name and maintain a friendly tone.

**2. Prepare a Script**

- Having a script ensures you cover all essential points.

- Adapt the script based on the conversation flow.

**3. Stay Organized**

- Keep a spreadsheet or CRM to log information from each call.

- Note down key details for future reference.

**4. Follow Up**

- If the seller is unsure about certain details, schedule a follow-up call.

- Send a summary email recapping the conversation and your next steps.

**5. Leverage Technology**

- Consider asking for photos or videos of the property.

- Use virtual meeting tools if the seller is tech-savvy.

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### **Common Challenges and How to Overcome Them**

**Seller is Unwilling to Discuss Repairs**

- **Solution**: Explain that understanding the property's condition helps you make the best offer. Reassure them that all properties have some wear and tear.

**Seller Overstates the Property's Condition**

- **Solution**: Gently probe with specific questions. Sellers may not recognize certain issues as significant.

**Estimating Costs Accurately**

- **Solution**: Familiarize yourself with average repair costs in your market. Consult contractors if necessary.

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### **Conclusion**

Estimating house repair costs over the phone is a vital skill for any real estate investor aiming to optimize their time and resources. This method not only streamlines your workflow but also empowers you to make informed offers that align with your investment strategy, whether that's seller financing, owner financing, or subject-to investing.

By mastering over-the-phone repair estimates, you position yourself to close more deals, negotiate better terms, and ultimately, grow your real estate portfolio more efficiently.

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