Hello everyone,
So, I have just begun working on lease-options. I have been making calls and talking to sellers and have had some good responses to people who are interested. Mainly I have been calling on homes for rent, though some fsbo owners as well. However, I am having a difficult time handling the objections to sellers who want a huge down payment from the potential tenant- buyer, which means if they get that money i get nothing. Can anyone help me with a word for word script on how to talk/ negotiate the sellers objection on needing that down payment in order to make a deal? Also, they often ask me how much am I going to make from the deal,(don’t know how to respond to that either) I’m almost there and trying to be persistent just need a little help. Thanks alot for all responses.
That’s a great question, and it’s loaded, too.
Check out this thread where we just covered this topic.
http://www.reiclub.com/forums/index.php/topic,54560.msg267653.html#msg267653
Meantime, don’t discuss the mechanics of a deal over the phone with a prospect. That’s automatic deal-suicide by phone.
Thank you so much for your response Javipa I truly appreciate it however, whether in person or at the sellers home can you tell me how you exactly get over that objection of them wanting a huge down payment. And also I’ve been reading a lot of information about investors pretty much automating their lease option deals and locking them up via phone. Also, I have def had some genuine interest I may actually even have a deal that I’m locking in tomorrow via phone. I really want to automate this process as much as possible. A lot of my stumbling has come for not handling seller objections the best. I know part of that is being new. Bur if other investors can do deals via phone I know that I can as well.
If a seller tells me that they don’t feel comfortable about ‘no down deals’ I might say:
“I understand. That’s why I’m requesting that ‘our’ tenant buyer put up ‘x’ thousands of dollars.”
[Actually, if that came up like that, I am blowing my presentation…]
However, for the sake of this example and attempting to salvage the poor pitch, I might add:
“And in order for me to get you the NET equity you want, without having to wait until Moses comes back, I am going to work very hard to find the right tenant/buyer who is willing to pay you full price, in return for the tenant/buyer’s option money. Otherwise, I can’t work for free.”
That ‘would be’ the cripple-in-wheelchair approach to overcoming an objection, but…
Or you could add that the tenant/buyer is putting up “x” thousand dollars, so he does have something to lose, and that’s ‘your security.’
My actual approach is to show the sellers what I’ve done and then proceed to show them what I can do for them.
Then I do what’s commonly called a “yellow pad analysis” with the seller, which you can read about extensively on my blog. Meantime, you need to reduce the seller’s idea of his ‘net’ equity by showing him what he’d get after a conventional closing.
If the seller isn’t satisfied that you’re getting the option money, then you’re in front of the wrong seller. He’ll have to market and advertise and screen, and negotiate, and market some more, and screen and negotiate until he finally finds a sucker that’s willing to pay his price.
Meantime, you’ve moved on to the easier deals, after that seller disqualified himself from your ‘program.’
Don’t mess around with cool, unmotivated, something-for-nothing types of sellers …who think they have ‘options’ other than to have you bring them a buyer willing to pay full retail.
Your benefit pitch will include a ‘fast sale for full price to a buyer that needs time to get financing.’
It’s NOT “I can get you a big down payment to put in your pocket.”
Is that helpful?
That was super helpful Javipa! :beer If I could buy you a drink I would But hopefully this emoticon will suffice. Lol thanks so much once again. I’ll be sure to keep you updated on how things go!
Thanks! I’m looking forward to hearing about your successes.