This part of the job could be the hardest part for you. Until now, you were able to hide in your cubby hole or in your home office while the magic happened. You could be the “producer” and watch it all go down behind the scenes. But now, it’s time to take the spotlight. It’s time to take your knowledge and put it to use by working with the seller in person to get an offer accepted.
Did you know that people would rather burn up in a fire or drown that make themselves look foolish in front of another person? It’s a true story. It’s one of the biggest fears that people have. And it has been proven. So I want you to do whatever you need to do to GET OVER IT. It’s not that bad. Take some hypnosis classes or something.
These people are normal people just like you and me that are being challenged with a certain part of their life. We’ve ALL been there with challenges before, so we can relate.
By keeping that in mind when you’re talking to the seller, you’ll be able to magically create win-win situations and solve some of these problems for the sellers
Regardless of your intelligence, your experience, or the size of your head that’s bulging with information, the seller is going to base their decision on how they FEEL about doing business with you. So building rapport, your body language, and your communication skills are absolutely critical to being able to land deals with sellers.
This is an area that no one teaches, but should. (and I’m about to). The “experts” in the field focus too much on making the numbers works, estimating repairs, and selling the house quickly. But essentially, you are selling yourself to both the sellers and the buyers. It’s important that you are sending the right message when you’re talking to them. People pick up on things quickly and easily – so let’s learn how to deal with talking to sellers and making offers on these properties. And then we’ll go out there into the real world and kill it (“kill it” is an expression that means to do an excellent job, or to perform beyond your normal expectations). 😉
By the way, don’t let the pressure get to you on this lesson. I’m not trying to do that. I just want you to know the importance of effective communication.
Alot of thought should go into how you communicate with sellers .
Before I go any further, I must tell you a story about a young man that we once had as an intern here locally in Jacksonville. While he carried himself quite well, and had confidence, he made a fatal flaw while on an appointment with a seller one early Saturday morning.
The lead came from a “We Buy Houses” Bandit Sign. It was a Probate deal, and there were several heirs involved with the sale of this property. Everything was going great over the phone, and the sellers agreed to meet this young man at the property to show it to him one Saturday morning.
Well, one thing about our friend (we’ll call him John to save his ass from embarrassment), is that he liked to drink on Friday night. Now it’s not really part of my weekend regime, but a little partying never hurt anybody…until now.The appointment was at 10:00 a.m. on a Saturday morning and John showed up dressed for success..NOT! He was wearing his beach bum shorts, a T-Shirt, and flip- flops. And the worst part of all, is that the beer from his Friday night escapade was still lurking on his breath. You know, one of those nights where it’s still there, in the depths of your lungs, leaking out with each exhale. Yeah, you know what I’m talking about.
Well as he talked to the seller about purchasing this property, which- by the way, this family was very serious about, the fumes from the beer floated right out his mouth and into their nostrils. It sounds kinda funny the way I’m writing it , but trust me, they did NOT think this was funny. He left them with his business card (which actually had my “seller line” as the contact # on it) and a written offer
The very same day, I received a call from the Personal Representative of the Estate. She wanted to talk to the owner of the company (which is – me). She was FUMING mad at the fact that “John” had showed up to the property dressed like a “beach bum” with flip flops, and beer breath. She was calling to let me know that he was out there representing our company like that. She absolutely refused to do business with him ever again.
After getting all of the details, I was able to professionally handle this issue, and turn the conversation around. I didn’t take up for “John” but rather told her how disappointed I was in him, and that I would take are of it immediately. I solved her problem by telling her that I was in charge and that I would handle the file for her from now on, and that she didn’t have to worry about a thing – I was going to take care of her and getting this deal closed.
It was less than 48 hours from that phone call that I had a signed contract on that property,signed by all of the heirs to the estate. Now here’s the funny part. The seller of that property NEVER SAW ME. She didn’t know that I’m half covered in tattooed, or that I also love to wear flops and a t- shirt. We continued with the entire deal and i NEVER met the seller of this property. I never saw her. She never saw me. We ended up making $13,000+ on that by wholesaling it, which we could’ve easily lost just by not paying close attention and being conscious as to what we’re wearing, and how others perceive us.
This lesson will give you some great advice on advanced negotiating strategies. I call it negotiating because you’re ALWAYS negotiating with someone who has or controls something that you want. So always be in negotiating mode – learn to be a master – and people will give you what you want.
Don’t Assume That you Know What the Seller Wants
A big mistake that a lot of real estate investors make is assuming that price is the dominant factor in a transaction. In fact, most of the time, price is not the dominating factor. What pulls more weight than price are other reasons that are linked with emotion. For instance, if you’re dealing with a divorce, the main factor in the transaction is probably linked to resolution. These people want some closure to their relationship, and getting rid of the biggest asset will help them get their sooner.
In order to find out the dominating factor in any negotiation, you’ll have to communicate with the seller. Asking probing questions is a good way to get them to reveal what is most important to them in the deal.
I bought a house from a guy about a year ago who was facing foreclosure. You’d think that his primary reason would be to get the bank off his bank, or to stop the collectors from harassing him. That wasn’t the case. He had Lupus. And he wanted to sell the house, get some cash, and go on a 50 mile hiking trail in Utah. He wanted to be a “survivor”. It had nothing to do with the foreclosure. To him, it was just the “right” time to sell since he couldn’t afford the payments anyway. But he was more concerned with being able to buy the gear and equipment that he needed. So that’s exactly what we did. We solved his problem, and made him a happy man.
So don’t assume that the seller wants more than you’re willing to pay. Take the time to find out by asking questions and LISTENING to what the seller tells you. Then find a way to solve his/her problem and you’ve made a friend (well, we won’t go that far) for life.
This is the weirdest thing, but it works. I’ll start by saying that people like others that are like them. Did that make sense? It’s a subconscious thing (again) but it’s true. You are drawn to people who are like you in certain ways, either personality, interests, goals, etc. Think about the people that you hang around. They’re probably like you in some way or you have something in common. That is what draws people together to build relationships.
With sellers, there is something that you can do to make them feel like you are like them. I touched on this just a little bit in the last lesson, but more in detail here.
Dealing with people will certainly make all types of personalities surface. They’re not all pretty, trust me. You’ll get real assholes and real sweetie pies thrown in there. There are people that talk REAL LOUD, and people that talk REAL SOFT. People that ramble on for hours, and people that don’t say much at all. By noticing subtle things about these people, and slowly build them in to the way you act, they will feel like you are like them. It’s not a conscious conclusion on their part, but when they see you standing with your hands on their hips (and it’s something they do all the time), they will make the connection subconsciously.
It won’t take you long to consciously determine what parts of their personality and body language that you can mimic. This is called “mirroring their image”. It is a highly persuasive technique that you can use not only with sellers, but with everyone.
You can mirror someone’s image simply by smiling at them. If they smile, then you smile back. If they lean slightly forward, so do you. If they say “OK” all the time, so do you. These very subtly actions , when woven into your own personality, can draw a person closer to you, and give the feeling that he or she knows you already.
Have a Credibility Kit Ready At All Times
This one tip alone will put you light years ahead of your competition. This is something that will help a seller make a decision almost instantly to do business with you. That is having a Credibility Kit. What is this, you ask?
It’s a folder or a notebook that you keep in your car, that you can bring in to the seller’s house when it’s time to make the offer. inside, this kit contains letters of recommendations, photos of houses that you’ve purchased, testimonial letters from sellers, a copy of your business license, business cards, and absolutely anything that you can think of that will give you a good name.
If you’re new to the business, you can still start building your Credibility Kit right away, even as soon as today?
As you do more business, you’ll add more and more to your Credibility Kit until eventually it will be so impressive that when faced with any objection from a seller, the Credibility Kit will take care of it. There’s nothing more powerful that a referral or a recommendation from someone else. It even has power if they are people that you don’t know.
A good example of this is a diet commercial. They’re advertising this new “magic” diet pill. you listen to the 30 second spill, and then at the end, you hear testimonials from people who have tried the magic pill and are saying that it works! Now we don’t know those people, but there’s something about hearing someone say that it worked for them, or that they’re happy with the service that makes people feel more comfortable doing business with you.
So where should you start?
Get letters of recommendations (on letterhead when possible) from:
What You Should Do Now……….
Mirror The Seller’s Image
When you’re standing in line at the grocery store, practice this technique by mirror someone’s image. If they are standing with their arms folded, do the same thing. Look at them and smile. Then, unfold your arms and put your hands in your pocket or on your hip. See how they react. If they do the same thing, or at the very LEAST unfold their arms, then go ahead and freak out!! Because this stuff really works.
Now take these techniques and practice them with your sellers! If they talk fast, then you talk fast. Using this technique is a subliminal method to make the seller think that you’re like them, and that opens the door to allow them to trust you.
First impressions last a life time, and that is not a joke. As sad as it seems, people do judge you based on the first impression and will (most likely) make a decision on whether or not to do business with you within the first 10 minutes of meeting you.
Let me take you through a first meeting with a seller.
You’re appointment with the seller is at 1:00 p.m. (my favorite time of the day to make appointments with ANYONE). You have to change out of your yard work clothes and into something a little more presentable. You don’t have to wear a suit and tie , but you should be neat, clean, and look professional. You never know what is going to offend a seller, so play it safe and dress appropriately. With me being a female and having so many tattooes, I really have to double check myself in the mirror before I leave the house to make sure my dragon isn’t hanging out or something like that.
My husband Dan has a sleeve (full arm tattoo), so he always covers it up with long sleeved shirts. Just to be safe. (First impressions…….) I hate doing that because I feel like I shouldn’t have to hide who I really am, BUT, I’d rather get the deal under contract and make $10,000.00 then make a statement by flaunting my back piece.
Out the door you go with contract in hand. Don’t ever waste your time by going to an appointment with the seller without taking a purchase and sale agreement with you. Your goal should be to get the contract signed while you’re there. If you’re appointment is at 1 p.m. – then arrive a few minutes early – 5 or 10 minutes.
Whatever you do – DON’T BE LATE- you’ll look like an ass. And if you can’t help but showing up late, call the seller as soon as possible and let them know when you’ll be there.
When you get to the house just take yourself. Don’t lug in your briefcase or your camera (yet). Just take yourself and turn your cell phone to vibrate so
you don’t interrupt the seller when he’s telling you his story. And trust me, they all have a story to tell. Their story is important, but we’ll get to that later.
Ring the doorbell and then take a step back and turn sideways a little. I know this sounds crazy but it’s the subtle body language that can prevent you from seeming intimidating. The seller is in a vulnerable position, and the last thing they need is to feel intimidated or inferior.
When they the door, SMILE!! A smile is the greatest way to communicate with someone without saying a single word. I assure you, that most of the time, they’ll smile back. SCORE!!
Wait for them to invite you in. Sometimes they’ll invite you verbally, and other times they’ll just hold the door open so you can enter. Wipe your feet and enter the house, staying behind the seller. Ask them simple questions to build rapport with them the first few minutes. Do not get into any details about the house yet.
“How are you feeling today?”
“Has it been a busy day for you?”
“Are you loving this weather we’re having?”
Get them to start talking to you about themselves. Look around the house for something that you can address specifically. For instance, if you see a photo of children, ask about them. People love to talk about themselves, and by asking questions, they’ll feel like you’re interested in them and will like that about you. You “care” enough to ask about the kids in the picture or to ask what their dog’s name is.
Try to find something to talk about that will make the seller feel like you have something in common with them. I know this tuff sounds crazy but IT WORKS. If you seel football memorabilia, then get them to talk about football. If you like fishing and you seel fishing poles in the garage, then casually mention that you’re going fishing this weekend. By building rapport with the seller, you’ve got your foot in the door further than the next guy that comes in.
Too many times investors are too anxious or too impatient to take the time that is required with the seller so that they feel comfortable and confident with you. They want to go in and bomb rush the seller, immediately asking questions about the foreclosure or the death in the family. If you start out with casual conversation, trust me, the details of their situation will come. After all, both of you know why you’re there.
Ask permission to walk around the house, and as you do, start asking some probing questions that will have the seller revealing all of the things that may be wrong with the house. You can ask questions like:
“When is the last time you had any problems with the roof?”
“Do you have any leaks that you know of in the kitchen or bathroom?”
“Is there anything about the house that I should know?” (they may tell you about the ghost at this point) *lol*
Then you can move into the “closing” questions:
“How soon are you looking to move?” (if the house is occupied)
“How soon would you like to close?” (if it’s vacant)”
“Has anyone else made you an offer on the house?” (you’ll find out who your competition is )
Once you feel like you’ve gathered enough information and you’ve taken a walk around the house, it’s time to sit down with the seller and make the offer. Before you sit down, tell the seller that you don’t ever ask them to do any repairs, you won’t ever have an appraiser in here, and that there are no contingencies on the sale. You’ll even pay all cash and _______(SOLVE THIER PROBLEM HERE). Then tell them that you’d like to make them an offer offers and then they can decide if it works for them. I LOVE THAT LINE (I’ll make you an offer and then you decide if it works for you, how does that sound”?) That line works like freaking magic dust. That line does two things subconsciously:
1. Makes them think that they need to make a decision now.
2. Makes them feel like they are in control by choosing your offer.
I’m telling you right now that NO ONE makes multiple offers. Most investors go in the house – bomb rush the seller- makes an all cash offer – and if the seller doesn’t accept, they hurry out the door never to be seen again. You’re not going to do business this way. You’re going to treat your business like a business and work towards closing deals.Making the Offer
Ask the seller where they’d like to sit down so that you can show them what you have in mind. I emphasize the word “show” because most people are VISUAL, and they want to SEE what you’re talking about. Don’t make verbal offers. Ever. Always go see the seller in person and write the offer down on a sheet of paper.
The kitchen table is a great place to sit with the seller. If you can, sit close to the seller, instead of across the table from the seller. Sitting across from the seller is too much like a debate or a dispute. It’s something that business rivals would do. By sitting NEXT to your seller, your body language suggests that you are on HIS side. (coll stuff, huh). Keep your distance, though, and remember that people have a 3 foot radius of personal space that they don’t like people being in. So don’t get TOO close.
Get out a sheet of notebook paper, a legal pad, or ask the seller for a sheet of paper. It’s NOT time to get the contract out yet. Contracts are legal documents that are , yet again, intimidating to people. Some people just draw a complete mind blank when they see a contract pulled out. Some even freeze up and don’t want to commit to something so serious. So for right now, keep it simple by using a sheet of paper. However, the power of writing it down on a piece of paper makes it REAL for the seller, and he can visualize what will really happen (in simple terms) if he accepts your offer.
Write down on your paper the following:
ALL CASH OFFER CLOSE IN 30 DAYS
AS IS, NO REPAIRS NO INSPECTIONS EASY AND QUICK $30,000
Let me explain the theory behind this technique. By writing down the offer in this order, the seller will read all of the benefits to him BEFORE he ever gets to the purchase price. Write the benefits to the seller in BIGGER letters than the purchase price. It suggests that benefits are advantageous and more important than the price. As you’re writing, tell the seller that based on what you’ve seen so far, this is the best that you can do. Then turn the piece of paper around and let the seller read your offer. (and then you BETTER be turning red ) Then…………….BE QUIET
Silence is NOT deadly. Take this opportunity to enjoy the silence and wait for a response. Do NOT try to justify your price. Don’t do anything but wait for an answer. It may seem like eternity if there is silence at this point.
After some thought, (which may not take long at all) the seller will give you his thoughts on your offer. He’ll either be ready to go , or there will be more negotiating needed.
If the seller agrees to your offer, then it’s time to get out the paperwork and seal the deal!
If you just can’t come to terms with the seller at this point, then it’s time for the takeaway.
You’re not always going to strike a deal on the first visit. But whatever you do, if you found it necessary to pay the seller a visit the first time, then they are worthy of a visit and follow up a second, third, and fourth time.
Don’t catch an attitude if the seller refuses you offer. But it IS time to wrap things up and be on your way. Don’t leave your offer with the seller. Instead, NICELY and DISCREETLY crumble up the offer in the presence of the seller. This will make the seller feel like you’ve taken something away.
While crumbling up the offer, kindly say to the seller, “I understand completely, and I’m sorry that I’m not your solution right now”. This sentence implies that it’s not over and done with, that it’s still open. Tell the seller, “If your circumstance changes and you’d like for me to come back out, please call me.” Notice that I said “if your circumstances change” – I didn’t say that my offer would change. But that his circumstance would change. And that is a true statement. Time and circumstances change, and so does motivation.
Note: This would not apply if the seller asks for you to leave the written offer for them to review and think about. In that case, don’t crumble it up. If they don’t ask for it, don’t leave it.
Leave the seller with your business card, and plenty of ways for them to reach you when their motivation to sell changes.
Shake the seller’s hand and thank him for his time. Then be on your way.
What Should You Do Now??
Practice these techniques and this routine (because it does become a routine) several times. Then make an appointment with a seller this week and try out your new skills. Perfect practice makes perfect!
IMPORTANT TIP: IF THE SELLER HAS EQUITY, THEN GO VISIT THE SELLER IN PERSON! It doesn’t matter what the seller says they’re asking for the house over the phone. If they have equity – GO – see them in person, use these amazing skills that you’ve learned in this lesson and BUY A HOUSE!!