How do you turn down sellers on the phone?

Question

Hey folks!

I'm putting together some "scripts" for BiggerPockets members (and my own REI Business!) and I'm wondering what your best method is for rejecting sellers.

Here's what I mean:

You get a phone call, and the seller owes more than you can pay. By a lot. Or it's in a bad location. Or for any other reason it just won't work out.

So how do you turn them down so you don't waste time going out to a property you know will never work?

What would YOU say?

cc: @Michael Quarles (and anyone else anyone wants to tag!)

Dev Horn · Answer

Thanks for the call-out, @Brandon Turner - good question.  I may approach this a bit differently than the typical investor...

I personally have a real estate agent partner, so I step back and look at it as "I have someone on the phone that WANTS TO SELL THEIR HOUSE."  That's valuable information, first for my consideration as an investor, but also for my partner Angela.  So, when I get a call, I'm trying to figure out - "How can I help this person with their real estate needs?".  A quick cash offer may be their best solution, but if not, it seems a waste to just say "Sorry we don't buy houses from people in your situation." and then let that lead vaporize.

So, when I am on that first call and it becomes obvious that this is NOT a cash offer opportunity, I just say something like this:

"Now that I better understand your financial situation in regard to the house, I don't think my quick cash offer is going to be a good solution for you.  We're investors and we must purchase properties at a discount, and you are not in a position to sell yours to me at a discount. (then I move to solution #2)  Based upon your situation, your best option may be to list your house on the retail market.  I have a wonderful agent partner - Angela - would you like me to have her call you to discuss listing the house?"

What was my strategy here?  Be honest about the fact that the seller is not a good fit for our program; then offer to connect them to another real estate pro who may be able to assist them.  No, she cannot pay me for that.  it doesn't matter, she helps me with CMAs and watches the MLS like a hawk for me.

If listing is not the best alternative, I might suggest selling the house via lease option, owner financing, etc. - whatever makes the most sense for the seller on the phone.

I think every contact with us is an opportunity.  I approach it more as a real estate consultant than an investor and I want people to leave their interaction with me feeling that I guided them in the right direction, whether that is my cash offer or not.  It just takes a few extra minutes for me to email the seller's contact to my agent or other person that might help the them.  It leaves the seller with a good memory of dealing with me and my company, and it's just good karma.  =)

Jerry Puckett · Answer

Completely agreed with Jay. Many people I talk to do not meet the low hanging fruit criteria that I want for myself. However, going through lean time in the past, I learned how to monetize leads that don't make sense for me by referring them to the folks that thrive on such things.

I do not like Short Sales, Lease Options, Wraps or sub tos....anything with that much time and paperwork makes me cringe. But there are fellas like @Brian Gibbons,@Grant Kemp, and @John Jackson just to name a few who thrive on these.

Then there is the pretty house and no immediate need to sell. I'm not licensed but know plenty who are......

So I make it a point to put folks in touch with the right people after triaging their call. At any given time, my pipeline is full of such info and I make on average an extra 3 to 5k per month farming out stuff that is otherwise useless to me. Usually with just one phone call.

That pretty much makes my entire marketing machine self sustainable. I guess it depends on what you mean by wasting your time.

Jay Hinrichs · Answer

@Brandon Turner  I thought you were going to ask a tough question like how do you close them.

If its under water or in an area you would not buy.. I would simply tell them it does not meet my criteria however If I run into someone or can think of another that could help them I would be glad to refer  them.. Then I would end by getting their permission to do this.

IE  " with your permission of course I would be happy to refer someone who could help you would you like me to do that "  get them engaged and give them some control on the situation.

Dev Horn · Answer

This is a solid, straight-forward answer to the question.  People appreciate when you shoot straight with them and have their best interests (as well as yours) in mind.

Danny Johnson · Answer

Hey @Brandon Turner!

I think @Jay Hinrichs, @Jerry Puckett and @Dev Horn all have very good recommendations for what to say and how to handle the situation so that you may benefit another investor you know...and maybe yourself if you are licensed.

Regarding what to say...if you don't have an outlet as mentioned above and don't want to waste their time: "I appreciate you contacting me and giving me the opportunity to make an offer to buy your house.  Unfortunately, there is just too much owed (or not in an area I buy in, etc) for me to be able to buy the house.  Just wanted to let you know now so that I do not waste your time."

Now...if they owe just a little too much, you could and should always have a system for follow up (might need many months to pass) because values do change and principle does go down and you might and should have built relationships with other people that can make those deals work because they buy at smaller margins, with fancy shmancy techniques or buy in those areas you don't buy in.

Always follow up.   The thing that varies with these situations is that the follow up will just need to be set further down the road than if someone is just not motivated to accept your offer.

Brandon Turner · Answer

Hey thanks everyone! This is awesome! :) (I love BP :) )

If anyone else has suggestions, I'm all ears!

Jacob Sampson · Answer

You have a nice property.  I don't think I'm the buyer for you.  Going forward, if you have any questions, I'd be more than willing to share my opinions.

Nathan Brooks · Answer

@Brandon Turner

I always just try to lay it out as simply and as honest, in a kind but clear manner as possible.  At the same time, if you can't help someone, its also not something you want to spend a lot of time doing.  I like to understand the situation, address the problem, give them kindness and sympathy for their situation, and then either take action myself, or help give them a few action steps to take:

"Mr. Seller ... thank you so much for reaching out to me, and I appreciate the opportunity to do busines with you.  In this case, our numbers don't work to be able to buy/rehab/flip/rent/sell this house, but I love being able to help make these situations a win win ... that sound good?

Mr Seller - Yes.

"Great, well let me recommend you reach out to _______ (realtor/wholesaler/bank/etc) and I know them, and they do a great job.  Who knows, down the road you might need to buy a house or have a friend who wants to buy or sell, and you will know exactly who do call.  Sounds good?"

Mr Seller: Yes, thanks so much for your help ... .

If I can monetize the lead, obviously I would like to do that.  But if it is a case where making $500 or $1k bucks sending off a referral that may or may not work for the seller, versus helping the person get out of a crappy situation ... go the right route, get them the person who can help/buy/rent ... and move on.

David Bokman · Answer

Coming from 15+ of sales and marketing in corporate america I have found that best method for turning down sellers (which I just did about 10mins ago with someone) is to tell them the truth and explain why you can do anything with the property. I may offer them a referral to someone else I may know that can assist, but either way there is no way around it...tell the truth, educate why and build that relationship so that if something does change in the future they will hopefully call you back because you built trust with them.

Brian Gibbons · Answer

Hey @Brandon Turner

Thanks for the shout out @Jerry Puckettt

This is a little long but, hey...

I like to be a transaction engineer, not a one trick pony.

Because in 2016 credit is still tight right now you should look at having a "problem-solving real estate business".

I call it

"don't be a one trick pony"

You should be a problem solver for seller having a few tools, such as sub2, lease options, wraps, etc for acquiring properties on top of listing and buying whole for all cash "as is".

So  what I'm going to do is to discuss what I would do if I were training  my brother or my sister to set up a "terms RE business" so that they can  make some money quickly, by "looking for problems".

I am the reverse of Jerry Pucket,

I farm expireds, cancelleds, long DOMs, FSBOs, FRBOs and Wholesalers that have pretty houses, no work, and no equity.

So I would say, if the property is in a nice A B neighborhood, good schools, above the median,

"<Name>, it sounds like a great house, I'd love to walk through it and perhaps write an offer"

Get all decision makers there.

Here is a "cash or terms" lead sheet.

https://www.biggerpockets.com/files/user/REISkills...

And a long post about a business plan for 2016

https://www.biggerpockets.com/forums/83/topics/264...

How do you turn down sellers on the phone?

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