Residential Real Estate Agent · Somerville, MA · Member since 2009 · 195 posts · 32 votes
Every time I get a lead I screen it first over the phone. If the motivation and equity is there I'll set-up a time to meet the owner at their property with my GC. While my GC is estimating repairs I'll spend most of my time asking the homeowner open ended questions trying to gauge what other issues, if any, might play a factor in the deal.
After my GC has all the repairs together, I'll spend 15 minutes in my car with the GC and come back with an offer to the owner. I usually explain to the owner that this is the best price I can offer as a real estate investor and I'm not going any lower or higher on that price. After that I simply present my number.
I was wondering what sort of process most of you experienced investors use in following a lead from beginning to offer. When presenting your offer do you prefer to do it in a certain setting? Do you have a shpeel you give beforehand? If so, what is it? Is there anything I can do to increase the likelihood of my offers being accepted?
Take more time getting to know the seller. It's not all about numbers, you have to put forth the effort to make them like you. Ask questions about their kids, hobbies you see interest them from walking through their home, what kind of work they do, where they're from, etc... The first task of any meeting is to create a relationship and develop trust. People do business with people they like.
I never bring my GC with me to seller meetings. You should take some time if you haven't already to learn the costs of doing a rehab that way you can do the estimate yourself. People don't like others poking and prodding through their home while you "distract" them. Also, no matter how ugly the house, find something to compliment them on, even if it's not to your personal taste.
Don't give them a number, ask them for their number first. Many time it's lower than yours!!!!!
Take more time getting to know the seller. It's not all about numbers, you have to put forth the effort to make them like you. Ask questions about their kids, hobbies you see interest them from walking through their home, what kind of work they do, where they're from, etc... The first task of any meeting is to create a relationship and develop trust. People do business with people they like.
I never bring my GC with me to seller meetings. You should take some time if you haven't already to learn the costs of doing a rehab that way you can do the estimate yourself. People don't like others poking and prodding through their home while you "distract" them. Also, no matter how ugly the house, find something to compliment them on, even if it's not to your personal taste.
Don't give them a number, ask them for their number first. Many time it's lower than yours!!!!!
Don't give them a number, ask them for their number first. Many time it's lower than yours!!!!!
Andy nailed it! In spite of what so many say... it is very true that the first one to "talk" in this case present their number first usually looses.
While some investors have turned this into a game... getting the seller to provide a number doesn't have to be that hard.
You can start by asking them what they think the value of the property is in it's current condition and why. Or what other homes in the area are selling for (thought this approach is highly suspect).
A direct question of how much would they be willing to take can be off putting but sometimes it is necessary.
There have been times where the seller would not provide a number and wanted me to provide one... my standard response was that I didn't want to offend them... if they kept pushing I would then ask them if they would accept $10? Of course everyone will say know... but now you have a baseline to work upwards from and gets the seller talking about price.
One other thing... regardless of whether you have the seller at the exactly the price you need, don't stop there... always this question...
I agree with Andy about building rapport.
I am pretty new at this as well but the successful investors around me do exactly what Andy mentioned.
One gentlemen, we'll call him Gus is about 75 yrs old and he's a professional birddog. I guess you could say he's a free range wholesaler. He doesn't get tied up with contracts, advertising, etc... Every deal he finds, and it seems as if he has about 2 a day, he gets by talking to people. That's it! He is considered one of the best closers around by some of the most powerful, wealthy, real estate investors in town. He's simple, respectful, will talk your ear off, and seems to care about people. His words are, "To treat people every bit as well as they aspire for themselves to be. If they respect you and trust you then you'll make money." Picture some one like Robert Duvall ending every conversation with phrases such as, "I preciate yur curtesy. Thank ya fur your time. It was a pleasure visitn' wit ya."
He's tells me about properties that he could get for $65k but when I call the seller they tell me $75k. It's all about the relationship!
Another investor I know who has mentored me goes into a home, gives the children some attention, looks for things to compliment the seller about. Things that have emotional connections to the family. He always gets them telling a story about something they care about so that he can LISTEN.
Another investor I know makes it a point to talk to every seller for at least 30 mins before getting into the numbers.
Conversing with people is an aspect of selling that I am working on and it's how the money is made.
Peter is also right about getting the seller to name the price. First one who speaks loses.
It sounds to me like you are killing your deal before you even have a chance. First of all you aren't building any rapport with the homeowner. It’s a huge no no to bring a general contractor along. It may be good in your mind because you will get an accurate repair number. It is not good in the homeowners eyes because more than one person makes them uneasy. You need to go alone and plan on spending at least one hour there. You need to build rapport by not just jumping into business or wanting to look at the house. You need to talk with them first and ask open ended questions. You will find out tons more information and they will trust you. I had to perfect this because when I first got started in real estate I was only 21 and I would get looked over. After about a year I got so good at building rapport and having sellers feel comfortable they would sell to me over someone that would offer more. On the other hand you have to understand wholesaling is a numbers game not everyone with the equity will sell at what you need it for. Just move on. Also you want to sit with them in the kitchen or on the couch in the living room no matter how nasty the house is just plop down like its spotless, also pet their dogs or cats and comment on things you see like family pictures or things you have in common. You will need to learn how to estimate repairs yourself or buy a program that will help you because taking along the gc is not good for your business.
I really appreciate your advice and this is exactly what I needed. I've actually had some success with my direct marketing campaigns and I could see my leads just floating away...With these new insights I'm going in with a very different approach! Thanks again!!