Stop acting desperate with sellers! (Wholesaling)

[Chris Gould]

Most of us get into this business to make money. I know what you're thinking...duh....but bear with me for a few more sentences. We have other motives but money is the key that unlocks everything else. And to make money in real estate you need to do deals. If you’ve gotten your mind right, you’re also very excited to do deals. The problem is, if left unchecked, your extreme desire to do deals can have a negative effect on your conversations with sellers because you can subtly become desperate. 

Especially when I started, I was willing to do anything to get out of my corporate job and make my dreams a reality. I was so disgusted with my situation that each deal felt like a glimmer of hope in my eventual freedom. I had a very, very strong purpose. Unfortunately, this resulted in me getting very desperate to do deals.

If you’re not currently dating, think back to when you were. Remember the people who seemed desperate to be in a relationship? Even if they were attractive and a good match for you on paper, if they came across as desperate, weren't you turned off?  Neediness can be very repelling. For me, it made me very suspicious. Why are you so desperate? What are you hiding? I don't trust people who seem desperate. There seems to be a hidden agenda. 

Psychological Science actually did a study on this back in 2007. They found that during a speed dating event, if a person had low standards and was open to dating basically anyone, even if that was not verbally communicated, their counterparts could sense this and rated them lower on the attractiveness scale. In short, desperation is communicated whether you explicitly say it or not. You must purge yourself of desperation AND still chase deals vigorously. 

The distinction is that you must have constraints that you operate within. Within those constraints, do whatever it takes to get the deal done. I once called a Popeye's Chicken and asked the employee to walk down the road to knock on a seller's door because the seller had went dark on me. I paid the Popeye's employee $50 and we ended up closing the deal (the seller had gotten a new phone, moved to Florida and lost my number). 

I realize my connection between desperation and repulsion may seem harsh but it's just science. Don't shoot the messenger! Conversations with sellers are the same way. If you come across as needy or desperate it’s a huge turn off to sellers. It will also make you compromise on things like price. You can take a potential good deal and once the seller sniffs your desperation, don’t be surprised when they try and get you to come up on price, eating into your profits.

We combat this by telling people up front that we are not a good fit for everyone. We have a business to run with certain protocols and procedures. We can’t just change things willy-nilly to accommodate the seller. This doesn’t mean we don’t try to accommodate them within the constraints we’ve set but we don’t completely break our process to appease them.

For example, I had a seller that wanted to sell us his house but he wasn’t truly motivated. The comps were weird so I wasn’t totally confident it would be a deal either way. He wouldn’t sign a contract unless it was 100% guaranteed it was going to close. I told him I needed to get funding approval first and the deal would be contingent upon that. He wanted me to get funding approval before he signed anything. I told him that’s not how it works but he was willing to walk away at that point. I was desperate so I agreed I would bring it to my investors without a contract in place (BIG NO-NO!). After calling around to my investors, one of them agreed to walk the property. After his inspection he told me he would take the deal. I called the seller back and said I was ready to move forward at his asking price. While I was running around to find an investor, he had talked to his son who is a realtor and had decided to just list it because he could get more that way. I had to break the news to the buyer and he was furious that I had wasted his time without having a contract in place.

Don’t break your process to appease the seller. Stick to your guns and you’ll be surprised how many folks come back around and agree to your process once you’re willing to walk away.

This is an excerpt from a book I'm writing a book called "The Wholesaling Handbook." If you wanted to get notified once it's available, sign up here. 

Happy Wholesaling!