Were you nervous the first time you picked up the phone to call the sellers to see if you can strike a deal for them to sell the house? Cold calling can’t be easy especially if you don’t know the person you are calling and the type of person they are personality wise.
All the seller can say is no! If your shy or don't take rejection well you will have a tough time!
I love rejection as I know I have to be rejected 15, 20 or 30 times before I get a deal!
Now I do not cold call sellers unless I know they are seeking to sell a lot lower than fair market value, if I see an ad that say’s "4 bedroom / 2 bath on quiet corner lot, needs updating and remodeling, priced to sell now at $150k and I know FMV is $200k then I know I might be able to convince the seller to except an offer around $120k figuring to remodel is $25k to $30k!
But if a seller advertises a home "4 bedroom / 2 bath recently remodeled, in very good move in condition asking $199,950 and I know FMV is $200k I know to walk away! This is not a deal and this seller has a retail mind set, they are not going to reduce there price 25 or 30% or more to sell the property to me, so I don’t waste my time!
I really want to advertise and market to potential property owners who are currently in turmoil as I want the seller who “Must Sell Now”, “Inheritance, Owner Lives out of State”, “Divorcing, Must Sell Now”, “Family Illness Forces Quick Sale Now” and “Lost Job, Must Sell Now”!
I like these kinds of ads as I know that circumstances are forcing a sale and the quicker the better, remember we are problem solvers “I can pay you this, close quickly and take this problem off your hands”, this is what motivated sellers want, the ones who are unable to make another payment, can’t see holding a property out of state or needing major repairs!
If I am calling anyone I want to know there motivated to sell, I want to know they have a wholesale mind set and need out now, or called me answering one of my ads because “I Buy Homes! Quick Closing! All Cash!”
One of the most powerful tactics I have used is deceptively simple…
I routinely offer sellers SUBSTANTIALLY less than they want for their property. This can hurt you as an investor because you run the risk of pissing off the seller…You DO NOT want to do that because it’s OVER at that point.
So…I leave them with this:
"My offer to you is substantially less than what you want for the property, It is NOT meant to insult you, Please understand that. Look at my offer as a SAFETY NET constructed of C A S H. If you NEED a NET, you HAVE ONE. What looks like a low ball offer TODAY, might in a month, be a way for you to move on with your life. My phone number is 555-5555. REMEMBER THIS…If you dial those 7 numbers, at the other end of that line is your MONEY…All you have to do is CALL FOR IT! "
It’s about planting a SEED, and IDEA in their minds. These images are EXTREMELY POWERFUL…
The SAFETY NET
The MOVING on with their life
The IDEA of dialing 7 numbers and those numbers being a LINK to CASH.
YOU plant the SEED…THEIR BRAIN will WATER IT!!!
That’s is quite motivating. Where do you come up a speech like that?
That “speech” took 20 years to write!!!
It was developed over my career…Trying things, adding things, twisting ideas around in YOUR head and the SELLERS head.
The KEY here is NOT the offer…The KEY is leaving that seller with a positive impression. Offering someone HALF or less of what they want for their home does NOT leave a positive impression UNLESS you combine that with the MONEY NET.
I think that’s a great pitch fdjake.
Barney Zick suggests something similar that I’ve adopted in my offer making. That is, to suggest that the “low ball” is a back up offer, so that if and when the better offer doesn’t materialize, they can fall back on our offer.
Adding the “call the 7 numbers” thing does add a little drama to the pitch, I’m sure.
If I can’t pitch someone in person, I prefer slow-pitching my “low ball” offer with a letter of intent worded much like what you suggest.
However, I word the offer in such a way that the seller has to read the entire letter to get to the part about the price. Otherwise, it’s easy for him to say “no” and not read the rest of the letter. If so, then I’m back to square one.
The point should be made that “how” we pitch something, is often as important as “what” we pitch.
I’ve come across innumerable sellers that demanded a bottom line, and didn’t want a bunch of “negotiating” (in not so many words). These sellers are nearly universally not motivated; just impatient…and wanting to maintain control of the negotiations. I disqualify those sellers on the spot. Truly motivated sellers are reluctant to offend me, because I represent a solution to their immediate problem.
I try to go slow, maintain control, spoon feed sellers with my hand made offer, and try to avoid being equally impatient as some of the unmotivated sellers are out there are, and couch my offers (even low balls) as a benefit to the seller.
Great post. I’m going to try the ‘7 number’ thing.
I’ve never feared rejection, because its been drilled in my mind that you cant base success with the failures. In fact, you gotta be thick skinned in this game, but you learn from every deal whether you close them or not. Always find out why your offer was rejected and if someone else got the deal. That may be someone you want to network and build a business relation with. You have to build rapport with the seller, I can’t emphasize that enough. Also, make them aware you are well connected with contractors, agents, lawyers, politicians, police officers; I mean, you name it. Why, because you want them to know you are the go to person, you’re a center point of resources. The most successful real estate investors network extremely well. I’ve gotten a lot of deals through word of mouth, trust me on that, and it doesn’t cost a dime. Even if I didn’t get the deal, I left a likeable impression.
@ Fdjake - That’s a perfect tactic.
That is a really good pitch you came up with and 20 years of that seem worth it. You know this sounds like something you could post in an ad to get motivated sellers attention. At least this way it is right upfront and straight to the point. As hard as times are now, who could stand to turn down cash money in hand right upfront even if it is not the offer they wanted.