Talking to Motivated Sellers

businessman-phoneIf you’re not marketing to motivated sellers right now, there will come a point in your investing career when you’ll need to start.  As the market cycles to favor sellers and more investors enter into the marketplace, there will be fewer on-market deals to come by.  Therefore, you’ll need to seek alternative methods of finding good deals.  In fact, every deal that I’ve found off-market has been much more profitable than those originating from the MLS.

I won’t go into detail about the ways you can market to motivated sellers, but some methods include:

  • Direct mail
  • Internet marketing
  • Door knocking
  • Bandit signs
  • Email marketing

 

Which ever method you decide to implement, there will be a point when you receive your first call.  So what do you say when you pick up that phone??…

First off, you’ll need to understand that not everyone who will call is going to be motivated to sell or even want to sell.  Actually, you’ll probably come across some pretty annoyed people who are wondering how you got their name and address.  But don’t let that scare you away.  There’s a saying I like that goes “Move out of your comfort zone. You can only grow if you are willing to feel awkward and uncomfortable when you try something new.”

The Setup

If you’re just starting out, I recommend that you keep the setup very basic.  I prefer to use a Google Voice number because all the voicemails are recorded, transcribed (although the transcription is usually pretty poor), and sent right to your email.  Once you get a Google Voice number, record a voicemail message.  Here is what mine says:

“Hi and thanks for calling.  I’m sorry I missed your call.  Please leave me your name, number and a message and I’ll get back to you as soon as possible.  If you are calling because you have a property you would like to sell, please leave me the address as well.  Thank you very much.”

Be sure to test the phone and voicemail before sending out any marketing campaigns.  Also, I highly recommend downloading the Google Voice app.  This allows you to make phone calls from your smart phone using your Google Voice phone number.

I would try to answer as many calls as possible.  If you work a day job like me, then you can either let the calls go to voicemail, pay for a call center receptionist or hire a VA.  There are advantages and disadvantages to each but just remember the goal is to answer ALL the calls.  I sent my calls to voicemail for a long time and over 50% of them were hangups.  Yes, you can call them back but more times than not, you’ll be making 2,3,4 or 5 calls before you reach them.  That’s a lot of wasted time.  The other important reason to answer all the calls is so you can track who is calling back.  As you get more advanced with your system, you’ll want to track who called, what campaign they were calling from, how many mailings you sent them before they responded and what mailing piece prompted them to call.  I just started using PatLive and have been very happy with their service.  One of the best things about PatLive is that they’ll enter the callers’ information into your CRM if it’s accessible online.  That’s a huge time savings for me.

Call Prep

taking-notes1

When I’m talking to a seller for the first time, I have three main objectives in the following order:

  1. Identify Motivation
  2. Build Rapport
  3. Gather Information

 

As I mentioned, you’re going to receive a lot of calls where the person has no motivation to sell so you’ll want to quickly screen your callers and get off the phone if they’re tire kickers.  For that reason, my first couple of questions that I ask any seller will help identify motivation.   Only if I detect that the person is motivated, will I then move on to building rapport.  I do this by asking open-ended questions so they can speak freely.  And when they talk, LISTEN!  This is key in building rapport.  As you ask them questions, try to go deeper into why they need to sell.  Another tip in building rapport is to match the callers tone and cadence.  For instance, if you’re speaking with an elderly woman who speaks softly and slowly, then you’ll want to speak softly and slowly as well.  I’ve found that people tend to respond better when you mimic their voice (but be careful to not go overboard with the mimicking!).  If you still find that they’re motivated, then you’ll want to ask questions about their property and its condition.  This will help you understand the level of work that needs to be done and, as you gain experience, will help determine where your purchase price will need to be.

Side note – If you’re new to this, I’d recommend that you don’t hang up with the caller even if they don’t sound motivated.  It’s a great way to gain experience and become more comfortable on the phone.  Also, you’ll be able to practice asking the right questions and running comps.

The Call

Relax!  In the beginning, you just need to get comfortable.  If you’re nervous because you think you’ll blow it with a motivated seller, don’t be!  I got my first property under contract when I had no idea what I was doing on the phone.  I was talking in circles and had to call back multiple times to ask questions that I had forgotten.  If someone is motivated to sell, they won’t care how well you perform over the phone.  They just want to know that you will buy their house.

Seller QuestionnaireThe best thing you can do is to start with a seller questionnaire and use it as a guideline to structure the call.  This will ensure that you ask them the most relevant questions while taking the least amount of time.  I generally start the call by asking for their name, address that they are calling about and the best number to reach them.  Then I’ll go into the questions that help me detect motivation.  I’ll ask if they want to sell their property, how much it’s worth and how much they would sell it for, and finally, how soon they would like to sell.  These 4 questions will give me enough information to understand if there is a potential deal.  Here’s why this works.  If they tell me they don’t want to sell, then the conversation ends.  If they say yes, then I ask how much their property is worth and how much they want to sell it for.  If their asking price is less than the property’s current worth then I know they are motivated and I go to the final question.  Obviously the sooner they want to sell, the more motivation they have.  If they still sound motivated, I’ll then ask them about the property and its current condition.  When you ask about the condition, you specifically want to target the big ticket items like the roof, windows, type of siding, mechanical systems, kitchen & baths and flooring.  Feel free to use the Seller Telephone Questionnaire on the Resources tab as a guideline.

Once you’ve gathered all of this information, you’ll want to tell them that you need to do a bit of research and get back to them to see if it’s something that you’d be interested in buying.  Then you can get off the phone, pat yourself on the back for taking the call and run your comps.  I will say that if I get the feeling that the seller is really motivated and needs to sell today, then I’ll skip the research and set up an appointment to meet them at the house.  Remember, they have already passed my motivation questions so I know they are willing to sell for below the property’s worth and want to sell quickly.

That’s about it.  Feel free to leave any questions for me in the comments section below.  Now go out there and make some calls!!

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  • Ray H.

    I’ve been marketing now for three months and there’s a way to make money off the people who want to sell but don’t/can’t sell for a price that works for an investor: leverage your relationship with real estate agents and give them a referral. The agent can usually give you a marketing fee for the lead. Negotiate the amount with your agent and hopefully your lead can pay for a month of marketing!

    • Shaun Reilly

      You have to tread lightly on doing that with an agent. It is illegal for an agent to give a referral fee to an unlicensed person. Creative means can probably be used to legitimize it but even then if someone dug deep enough the “intent” could still be an issue.
      This will be a bigger issue for the payer (I.e. the agent) since they are the ones violating the terms of their licensing.

  • Shaun Reilly

    This is a tough issue to deal with. Unless you want to be a slave to your phone 24/7 it is going to be necessary to either have them go to a voicemail or have some type of service get the calls.
    Once you are scaling you can justify the call center but just starting out probably have to live with the consequences of using a voicemail when you can’t pick it up.