Does this happen often for you?

Question

Just wondering if this happens to everyone else.

Had a guy walk through one of the houses we recently fixed up and are trying to flip. Says he loves it and will take the house. He said he needed to get $1000 out of his IRA to pay for the ernest money. This was on Tuesday. I've tried to call him every day this week and he never answers his phone and hasn't tried to call me back.

Every house we have tried to flip it seems like we need at least six people who definitely want to buy the place before we actually get a single person to give us any money for the home. Is there something that we are doing wrong or is it just the way people are and this happens throughout the rest of the country.

My mom has the same problem trying to get some of her houses rented out. She gets around fifty phone calls from people wanting to rent it and around 15 will say they will be there on Saturday to look at it. When Saturday comes she is lucky to get three people to take a look at it.

Anyone have any suggestions on getting people to keep their promises?

Michael Rossi · Answer

New scientific data shows that renters have the smallest brains of any creatures on earth.  Their brains can only hold 5 minutes of short term memory and absolutely no long term memory.  That's why when the tenant tells you that the'll be there on Saturday, they never show up - they simply couldn't remember anything that far in the future.

Therefore, if you don't want to have a bunch of no-shows, you've got to observe the 5 Minute Rule, meaning that you must talk to an applicant within 5 minutes of them leaving to see your rental.  So, when I show a rental, I make the tenant call me 15 minutes before the appointment, so that they'll have to leave within 5 minutes of me talking to them.  Once they're on the road, they usually can remember where they're going, so you're ok even if it takes them more than 5 minutes to actually drive to your rental.  Following this procedure has cut my no-shows to almost zero.

Jon Holdman · Answer

Calling them will help a little, but not much.  I've had much better success with telling them to call me.  I tell them to call me 30 minute (or whatever's soon enough that I won't have started to the property) before the scheduled appointment or I will not be there.  That has greatly reduced no shows.  Now, my no call percentage is still quite high, around 50%.  But if I haven't headed to the property, its no pain on my part.

Dale Osborn · Answer

When we had apartments, people would stop by looking for a place to move to. They of course did not have the $35 application fee. This then became part of my screening process - if they said they would be back - there was a red flag somewhere and they would not be returning! If they do not have the application fee paid - credit check done - deposit money and the first month's rent - they do not get access to the property. It is better to have the unit sit vacant than to allow the wrong tenant in!

John H. · Answer

I have a property manager for most of my properties now (which I highly recommend you work into your numbers before you invest)  but I have done and do the open house method as well...  I announce on my property listing website the time the open house will be..  I also have applications for them to fill out once they arrive.  I do not waste my time calling them... Either they show up at the open house or they do not.  The first qualified person with money gets the unit.  I have had a lot of success using Craigs List to rent properties..  I have yet to use it to sell or flip,  I will be working on that soon.

Dustin M. · Answer

I'll have to use some of these suggestions. I was already calling people ahead of time to limit the number of no shows.

However, in the future I'll make sure to have applications / contracts available that they can sign on the spot. I'll also have to use the suggestion of telling people that I'm the manager / hired to sell the property. This way people would be more likely to tell you the truth when they really aren't interested in the property.

Account Closed · Answer

When I meet potential renters,  I get lots of no shows.  Like Jon though,  I schedule multiple meetings on the same day during the time period I plan on being there.  Once in a while, I will get two potential renters showing up at the same time.

Bill Gulley · Answer

Whether you are leasing or selling, the law of large numbers seems to apply, you'll need to go through several (losses) before you find a winner. Bill

Jon Holdman · Answer

I can speak to the rental side.  Happens all the time.  When someone says they will come see the place, I give them about a 40% chance of showing up.  I do a couple of things to avoid wasting time.  One is that I schedule multiple people at exactly the same time.  I usually only show about once a week.  So, all callers up to that time are told to be there at whatever date and time it is.  Then, I tell them to call one hour or 30 minutes (depending on the time of day and where I'm coming from) or I won't be there.  If there are no calls, I don't go.

My rule of thumb is if I get four people saying they will be there at a specific time, I'm almost certain to have at least one actually show up.  It would be very unusual to have three show up, two is typical, one is not uncommon.

I've started "asking for the close".  That is, I ask "do you want to fill out an application".  I have pens, applications and clipboards.  Most say "let me have an app".  I hand them over.  I'd guess that one time in something like 20 cases they came back with a filled out.  And that case they came back 15 minutes later.

I had one situation just this week where five people said they were coming, and three actually showed up, and two of them came at the same time.  I just asked the second ones to wait a few minutes.

For selling, I suspect the situation is no different.  I suspect that's why buyer-side agents shuttle their clients from house to house.  If you're FSBO'ing, and hoping they show up, I'd guess a lot of no-shows is part of the game, too.

J Scott · Answer

Yes, this is tremendously common...

In fact, I probably have 2-3 agents a month that say, "I'll be sending over a contract this afternoon for my buyer," but then never get a contract.

There are lots of reasons for this...among the most common:

- Buyers aren't comfortable saying, "I'm not interested" directly to the seller, so instead they say something more positive -- but that isn't true.

- Buyers actually do like the property, but are in the middle of their search and find something they like more.

- Buyers actually do intend to make an offer, but get cold feet at the last minute.

If you really want to get a buyer emotionally vested in a property (and if you to find out if they're serious or not), get them to sign a contract before they leave the property.  Once a buyer signs a contract, he will be much more emotionally invested in the purchase and will be less likely to back out (whether they hand over money at the same time or not).

Also, if you're showing the house, consider not telling the buyer that you are the owner.  Buyers aren't comfortable telling the owner of the house all the things they don't like (which is why ideally the owner shouldn't even be present at the showing).

Lastly, I like to live by the mantra, "Buyers are liars."  In general, let the contracts and the money speak for themselves, and if you don't have a contract *and* money in hand, it really doesn't matter what the buyer says...

Does this happen often for you?

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