From Meeting To Signed Contract In 4 Easy Steps
The goal of any real estate investor is to convert leads into deals. How well you do this often separates you from every other investor in your area. It is not enough to state your case and hope for the best. There is a certain way of talking to sellers that gives you the best chance of getting your offer accepted. By taking your time and explaining the process you build a rapport that often leads to a deal. You don’t have to be a fast talking salesmen to get the job done. The direct approach is often the best. Here are four steps to get the seller to accept your offer.
- Initial Contact. Dealing with traditional sellers is much different than dealing with bank owned properties. With traditional sellers you have the advantage of being able to communicate directly. Instead of going through a real estate agent or a negotiator you can get a direct sense of what the seller is thinking and feeling. The first step in the process is the initial contact. Regardless of who reaches out to who the first conversation is the most important. This sets the foundation for every further communication. During this first contact you need to set a balance between finding out about the property and answering any questions the seller may have. It is important that you find out their motivation for selling. It is this motivation that drives the rest of the transaction. In addition to motivation you need to get as much information about the property as you can. Not every new deal will make sense for you. By gathering information from the first call you can get an idea of whether or not it makes sense to move forward.
- Due Diligence. After you speak with the homeowner the first time you need to roll up your sleeves and get to work. Never take all the information that is provided to you as fact. You should verify as much information about the property or any numbers involved as possible. Spend some time looking at recent comparable sales and current active listings. It is a good idea to drive by the property to get a sense of the neighborhood. Even if you think you know the area the property may be located in a subsection that you may or may not want to pursue. You should also find as much as possible about the demographics and if there is anything on the horizon that can impact the property value. Before you speak to the homeowner again you should know as much as you can about the property without physically looking at it. You should plan on doing this due diligence within 24-48 hours of your first conversation. After you have done your homework you should reach out to the homeowner and plan to meet at the property.
- Follow Up At The Property. Much like with your initial conversation your first time at the property should be spent gathering as much information as possible. If you are not experienced you should bring a property checklist that will help you stay organized and know what to look for. Start with the exterior of the property and work your way to the inside. Make note of any costly repairs or any deficiencies with the property. Always take your time and go in as many rooms as possible. A problem in the basement or in the attic can completely impact what you plan on offering for the property. Once you are done with the tour sit down with the homeowner and talk numbers. You should accompany yourself with any comparable sales that support your value. You never want to trash a property you are making an offer on but you need to make the seller see things your way. Always start by asking the seller what they think their property is worth. This sets a starting point for the negotiation. If the number is high you need to ease into why they are wrong and what you think a more realistic number is. Explain what you can do and how you will do it. Go over the timeframe and benefit for working with you. Never run from the fact that you are a real estate investor looking to make a profit but always highlight the risks associated. By doing this sellers will appreciate your honesty and be more likely to work with you.
- Signature. In a perfect world the seller will agree to work with you as soon as you are done with your presentation. This happens roughly one out of every ten times. For the other nine you need to stay patient at the same time always push for an answer. If the seller isn’t ready to commit you need to set a firm date to hear back from them. It is ok to give them two or three days to think things over and get back to you. When that day comes you need to follow up and see what they are thinking. You may need to tweak your timeframe or your numbers. What you don’t want to do is give them too much more time. If you let the seller constantly put off making a decision they will continue to do so for weeks on end. You need to stress any important dates for foreclosure or short sale. If they are still not ready to commit you should explain that the offer you make today may not be the same in a few weeks. It is important that the seller is comfortable every step of the way so when they to agree to your deal you know it will actually end up closing.
When working with sellers how you say things is always as important as what you say. Never be pushy and never take a condescending tone with a seller. Try to put yourself in their shoes to get an idea of what they are going through. By thinking like a seller and walking through the transaction you will get many more offers accepted.