Hold up. Wait a minute! Where do you think you’re going? The party’s not over yet amigos! Not even close…
We’ve only just reached the halfway point in my epic (if I do say so myself) series, 6 Stages of Investing. But as I said, it’s only halftime! So hit the throne, refill your beverage (pour a cold one in honor of lil ole’ me while you’re at it), and hurry back to your seat, because the second half is always the most exciting.
The Instant Replay
Before we wrap up Stage 3, let’s take a quick look back at the previous posts that covered Stage 3. After all, to know where we come from is to know where we’re going, right? I’m sure somebody awesome said something like that, I just don’t know who.
Point is, we covered the six steps of that first nail-biting phone call. Then we revealed 3 basic phone principles and 4 personality traits. I’m talking priceless information here, my friends. And just last week, we talked about the importance of doing your homework and property recon and the art of pumping yourself up.
My, how far we’ve come. We’ve covered some major ground, and I’m thrilled to say we’re not done yet. It’s time now to talk about (finally) establishing prices and setting appointments, the final part of Stage 3.
Let’s Get Ready to Rumble!
Okay, you gave yourself the big pep talk, right? Maybe you did some pushups, some jump tucks, perhaps you gave yourself a few Tarzan-like pounds on your chest. Those of you who are super hardcore and slightly masochistic may have even slapped yourself in the face a time or two. Look, I don’t judge. Whatever works for you is cool with me.
Point is, you got pumped for your seller call, and now you’re ready to talk price.
But before you get to the good stuff, know (and follow) these rules:
Ask for the need, not the want.
Be sure to ask your seller what price they need. We all want as much as we can get, so if you ask what sellers want, you’ll probably get an outrageously high number. So be aware how you ask, and always ask for what they “need.”
Ask about the price.
Challenge your sellers to explain how they came up with their prices. Remind them that you need to establish the best possible prices, so you can secure your business partner’s approval.
Never negotiate on call #1.
Please, please… please don’t negotiate price during that first phone call, but you should ask your sellers: “What is the lowest price you will accept and still feel comfortable with for the deal?” Remind them how they are benefiting from working with you, and reassure them that nothing you discuss is set in stone.
Compliment, compliment, body shot.
Eye of the tiger, baby. If you smell fear, pounce. What I mean is… if you sense that your seller is hesitant, immediately throw a compliment his or her way, then redirect the conversation by explaining how you’re simply trying to keep the lines of communication open, so you can ultimately solve their housing problem (the body shot). Stay in control of the conversation. Period.
Secure an extra $2k.
In just a few seconds, you can make an extra $2,000. As soon as your sellers share pricing with you (and it doesn’t matter what number they say), jump in and hit them with “the blow.” Be dramatic, lay it on thick and go for an Oscar-winning performance.
I’m talking about the deep inhale and exhale technique. Give them “the blow,” then ask if they can wiggle on the price a bit. Chances are they will agree to do so, and just like that, you will set the stage for the rest of your seller negotiations.
If your seller agrees to lower the price, you know for certain that he/she is motivated, flexible and ready to make a deal. And that’s awesome news! If your seller says heck-to-the-no, you know you’ve got more work to do.
Keep the call to 20 mins max.
Bottom line – if you’re on the phone less than 15 minutes, you haven’t asked the right questions. If you’re on longer than 20 minutes, you talk too darn much. Be efficient with your time, and respect their time.
Swing batta, batta, swing batta.
Now let’s talk pre-close and appointment setting. You’ve come this far, now give your sellers a quick conversation recap highlighting their housing pain, what they need (not want), how you’re the perfect fit, what you can do to relieve their pain and how you will contact your business partner immediately and go to bat to secure the best deal possible for them.
Pull the ole’ Columbo.
There’s one key question that you still need to ask, and that’s if your seller has a mortgage. This is the most private question of all, right? And that’s why you’re going to slip it in at the end of the conversation, kind of like a quick side note:
“Okay, well thanks again for your time… oh, hey, I almost forgot, do you have a current mortgage on the house?”
You do this at the end because you’ll have (hopefully) established rapport and they’ll kinda be caught off guard when you throw it their way after you’ve pretty much already wrapped up. But only drop the Columbo if the conversation went smoothly.
True or false – seller objections are a good thing.
Survey says? True!
Seller objections are normal, they’re healthy. It means the deal is real. If your seller is rushing through the process and quickly agreeing with everything you say, chances are you’re dealing with a dishonest seller – maybe even a criminal. And that’s bad news bears. So welcome the objections, but know how to handle them.
You have to know how to maneuver around your sellers’ objections, so you can keep the ball rolling. And to do that, I want you to address your seller by name, agree with his or her objection, then ask if they’d like to get your best possible offer on the table as soon as possible.
Show empathy, express sympathy, then make your sellers think about how much they need your best offer. If they express the need for more time, explain that you know from experience that they won’t call back simply because… life happens. So why not finish what you started now… instead of later, which in the world of real estate investment means never.
Oh Snap! You’ve got the Power
Do you even know how money you are right now? You’ve gained some amazingly awesome tools, and you’re now empowered to power through what I like to call the motivational interview process with your potential sellers.
Through these first 3 stages, you’ve learned to set up your business the right way, you understand how to generate leads the right way and you know how to communicate with those leads effectively. Remember, though, that it takes time to master any profession – especially real estate investing – so allow yourself time to grow and learn. Give yourself permission to screw up and dust yourself off when you get knocked down.
Take the information you’ve gained so far, stick with it, and more importantly, stick with me.
More to come.
I know, I know. It’s bitter sweet knowing that Stage 3 has come to a close. That means we’re halfway through our epic series. But I refuse to be a glass half empty kinda guy. We’ve still got an amazing second half to go.
Coming up next time, we’ll talk about Stage 4, which is about acquisitions, comping properties, making offers and more. So stay tuned as we bring it all full circle. Let’s continue our journey (together) onward and upward, and remember that classy people are successful people.
Swish that around for a bit.
Trackback from your site.