How to convince motivated sellers to go with your offer

Question

We pay for qualified leads in our area for motivated off-market home sellers. But it seems like the majority of the distressed seller leads that come through are "shopping around" for multiple offers. We may be the 3rd investors they speak with, or the 1st, etc.. Regardless, we may walk the property, talk with the seller, then email them an offer (EM included, no or low DD, closing in less than 10 days or flexible). All in all, we make pretty compelling offers from my perspective. A lot of people have ghosted us or simply say they're taking another offer without providing information on those other offers..

How can we make ourselves stand out? Does anyone have thoughts on how we can better compete or grab the attention of the seller?

Is it better to make verbal offers as opposed to emailing a contract w/ the price? We generally don't make verbal offers solely because most people aren't ready to make a split decision like that without mauling it over or consulting their spouse. We don't want to put someone on the spot.

Any thoughts are greatly appreciated!

Joseph Cacciapaglia · Answer

If you are buying non-exclusive leads, then you aren't really accessing "off market" deals. They're just being marketed differently. I think it's important to distinguish off MLS deals with true off market deals. I find that some of these "off market" deals have just as much competition as deals that are listed by agents. Of course, you can still find good deals this way, you just have to learn how to make competitive offers. Hence your question.

If you are getting the opportunity to meet with sellers, I think the best way you can stand out it providing them some value in for form of education. One thing I like to do is share all the different ways that other investors may be trying to take advantage. This only works if you're not doing anything like that, which I'm assuming you aren't. I would also share all of my market data with them. Many sellers can feel the asymmetrical knowledge at play, and appreciate it when you are open with them. People do business with people they know, like, and trust. The more you can be an open book, the more they will trust you. Most sellers understand you're going to make a profit. They just don't want to do the work themselves.

All that being said, when you are competing for deals, it is often a numbers game. My clients that primarily buy MLS properties get great deals simply by making a lot of offers. It sounds like you might need to treat your "off market" leads the same way. I would say to do what you can to stand out, but don't waste too much time worrying about the deals you don't get. Move on and keep making offers.

Luke Simonetti · Answer

Really great advice here! Thanks everyone.

@Joseph Cacciapaglia We actually just did this with the most recent lead and may even close on it. Talking through how "other investors/wholesalers string you along" really helps build the rapport. Great point.

@David Masciangelo These leads are exclusive from the company, but that doesn't stop the leads from googling for other "i buy houses" websites and posting their info on there. Generally it's "We need to sell our house, we're shopping around for some offers right now". Most people, unless it's a unique situation, will want multiple offers on their homes and choose the best one. My lead generation company can't prevent sellers from shopping. However their whole business model is paramount to making leads exclusive to us. We get about 3 leads a week. What makes them qualified is they go online on their own will, fill out a form for "i want to sell my house fast" and then we contact them within 30 seconds of them submitting their info. Other than that I'm not sure how much more qualified you can get

@Zackary C Dunn That's very interesting. I'm assuming that works out well more often than not for you? Do you find that making a verbal offer is sometimes "shocking" to them? Like to the point where "they need to think about it"? If so what do you do in those situations?

Douglas Mcqueen · Answer

@Joe Cassandra check out Chris Boss’s book, Never Split The Difference, may be a huge help with where your stuck.  It’s made a great difference in how I interact with sellers during negotiations.

Theresa Harris · Answer

@Luke Simonetti  Ask them what they want for the house both in terms of price and conditions of the offer.  If they are truly motivated to sell, they should ask for a reasonable amount.  Most people who say they are motivated to sell, truly aren't and many think their house is worth more than it is.

Douglas Mcqueen · Answer

Joseph hit the nail on the head with the value perspective, try to add value to your deals.  That doesn't always mean  more money.  When we deal direct to owner/seller, especially in the case of properties in distress we  approach it from a problem solving perspective.  This owner has a problem how do we help correct it, often times more money isnt the answer.  When we meet with the seller to walk the property we are feeling them out just as much as we are feeling out the property, most times we alredy know a great deal about the property and are more or less set on where we need to be.  This time is spent uncovering what we can about the seller.

They are motivated but what is motivating them to sell, once we get to the true motivation we try to structure a deal that gets a fair price (for them and us) and solves the problem we can then capitalize on their motivation.  From the first meeting we are trying to build a relationship and earn the trust that Joseph speaks about above and get to know them.  If they were motivated to sell and the motivation was simply financial they would list the property if they havent then something else is holding them back.

Secondly follow up with them, ask them if they closed and how it went.  You'd be surprised to know how many no's lead to yes through follow up.  Sometimes they just want time to think and the easiest way to buy that is to say they went with another offer.  Other times that other investor tried to bait and switch with a high offer then tried to re-negotiate or gets scared off by an inspection or something found in DD.  Some deals take longer then others and you have to keep working the lead.

And again keep grinding and keep putting offers in, don't however lower your standard to get the deal done.  Don't bet on tomorrow cash flow with today's money.  If you have to submit 100 offers to get 1 deal done then that's what it takes  be persistent and be patient the deal will come.

David Masciangelo · Answer

@Luke Simonetti Understood Luke.  Just wanted to offer a different perspective.  I hope it continues to work for you and good luck with the negotiations.  I would still highly recommend the Chris Voss Book, Never Split the difference if you have not as of yet.

David Masciangelo · Answer

@Douglas Mcqueen one of the best books I've ever read and his podcasts are great too! Great suggestion.

Ian Walsh · Answer

It's more about running a lot of leads than a savvy sales process.  The sales process will lead to more conversions, but getting the reps with leads is key.

Joe Cassandra · Answer

I'm pretty good at being able to pull out information from the seller such as what they plan to do next, why they're selling, etc...the real honest tip I can give is (as cliche as it sounds) is to listen. Then when they reveal something a little personal, nudge them to give you more info.

Sellers test you to see if you're going to judge them for their situation. Once you don't and more listen and understand, they open up. Unfortunately, that could take 30-90 min of your time when meeting them.

Where I stumble is finally getting around for them to take a lower price.

For example, I'm negotiating with a FSBO right now. His wish is simple. Sell the house and RV down to Houston and stay with his daughter and grandkids for a bit. But he claims his bottom line is $300k. I need it to be around $260k. I'm trying to piece together how to get him to come around to that price point. But, still learning that part of the negotiating process.

The fault I have is I prejudge how a seller will respond. "Oh, they won't take $260k, why bother? Make an excuse and leave." And that's what I've done a bunch of times so to avoid any awkward moments.

It's not the right approach and what I'm trying to work on.

Zackary C Dunn · Answer

@Luke Simonetti

I always make verbal offers on site. I come with a tape measure, my repair price list (I’m a contractor so it helps), and a copy of at least 5 comps (preferably 1 in a state of disrepair, 1 in fair but outdated condition, and 1 fully remodeled). I then walk through the house with them finding out why they are selling. At the end of the tour I first go through what repairs would be needed to bring the highest market value and the price of such repairs, then I go over closing costs, realtor fees, timelines for repairs and time on market. I then show them what they could expect to clear after doing the repairs themselves and paying closing costs. I then show them what I can pay them and explain all costs associated with me processing a deal. I then tell them plainly you can come out of pocket $x amount wait 2-4 months and make an extra $x amount or I could give you $x in 21 days or less it’s whatever you feel works best for you. We then sign the contract right then. hope this helps as it has helped me.

How to convince motivated sellers to go with your offer

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