Close More Deals With Motivated Sellers
The most successful real estate investors are able to convert deals with motivated sellers. These are the deals with sellers who are going to close with somebody and that person has to be you. They may be facing foreclosure, short sale, probate, divorce or have some other reason for wanting and needing to close quickly. These deals often have plenty of competition and go to those investors who know how to put themselves in the seller’s shoes. Almost all investors have the ability to close quickly or solve problems. By thinking like the seller and putting them first you will find yourself converting many more deals. Here are five tips to help you close more deals with motivated sellers.
- Prepare A Script. Even the most seasoned investors have an idea of what they are going to say. You don’t necessarily have to memorize a script but you should have some idea of what you want to get out. One of the worst things you can do is go into a meeting with a motivated seller and wing it. This may sound cool but is a recipe for disaster. You should have some idea of what you are walking into after talking to the homeowner over the phone. When you go to their house for the initial meeting you need to have some questions answered. Instead of rattling these off like a job interview there is a pattern of when and how you ask them. It is essential that you have a notebook ready and are willing to take good notes. You never want to have to circle back and ask the homeowner something they already told you. After you leave the meeting you should have a very good idea of their motivation, timeframe and expectations for the transactions. The best way to do this is by developing a script.
- Keep The Tone Light. One of the ways you can separate yourself from the pack of investors is with the tone you take in your meeting. While foreclosure and potential short sale are serious events it is not the end of the world. This doesn’t mean you should downplay the importance of what the seller is going through but often times a little brevity goes a long way. Something as minor as a lighthearted comment or something self-deprecating will be what is remembered well after you leave. You don’t have to be a stand-up comedian but talking about a sports team or current event can be a welcome relief for what the homeowner is going through.
- Deal With Reality. Perhaps the hardest challenge in dealing with homeowners is painting the picture of reality. There is so much information and misinformation out there that homeowners can often believe something that is totally inaccurate. One of your primary goals for your meeting is to let the homeowner know exactly what they are going through. You don’t need to paint a doom and gloom scenario but you should tell them the worst case for what may happen. For every deal you lose by doing this you will gain several more. By giving the homeowner real, useful information they may not like it at the time but will appreciate a day or two after you leave. As long as you are upfront, honest and avoid being overdramatic you can gain many deals simply by letting the homeowner know where they stand. The truth can be your greatest ally in prompting action from the homeowner. At some point in your meeting you need to know where they stand and what is on the horizon.
- Prompt Action. The goal of any motivated seller meeting is to secure a deal. The best way to achieve this is by creating a call for action. You need to make it clear to the seller what the next steps are and how they can work with you. You can even go so far as to tell them what would happen if they signed a contract with you today. Whatever you do you need to clearly define what they need to do and how they need to do it. You can’t leave the meeting without knowing where you stand. If you allow the homeowner to call you in a few days you give them time to think and see what else is out there. You don’t have to make the homeowner sign with you on the spot but you have to have a sequence laid out for how they are going to proceed. Be ready to answer whatever questions they may have but always leave the meeting calling for action.
- Follow Up. Even with the best approach and presentation many homeowners aren’t going to sign a contract with you on the spot. If you feel that they need more time it is essential that you make a specific time and date to follow up. By nailing them down to a time they are committing to hearing from you again. The more times they hear you the more likely they are to want to work with you. If they have a foreclosure on the horizon you need to make them aware of specific dates when they need to act. Once you secure the deal you have to schedule dates that you will keep the homeowner in the loop. Take a few minutes every week or so to provide whatever updates you have. The odds are that the deal will be at the bank for several weeks without action but you can’t leave your seller in the dark. The better you are at following up the more likely your deal will be a success.
Dealing with motivated sellers is a delicate balance. You need to know when to push and when to back off. How well you can convert these deals will go a long way in determining your investing success.