You have done the marketing, you know the numbers, you want the deal. However the seller may still be in the “let me think about it mode”. Overcoming his objections and knowing how to spur his decision making process along is key! You want to get the contract now. Here is how:
Below are some of the objections that you will come up against:
- I’m going to list my house with a realtor.
- I do have time to list my house, right?
- My mortgage broker said he is going to refinance my loan.
- I am not just going to let you take my house!
- I am sick and tired of dealing with people like you!
- Another investor offered me so much more…
- I don’t want to give my house away
- I can’t do that price.
Here are some of the ways to get this done respond.
I wouldn’t want you to give your house away either. What price would you consider to be giving your house away?
- What price can you do?
- I would LOVE to pay you $200,000 for your house. However, in this market, I would be out of business… fast.
- For a quick, cash purchase, you’re going to have to be competitive with the foreclosure prices.
- Why would I buy your house for $30,000 when I can buy the bank’s house down the street for less?
- I know all of the investors in town. They are all going to be in the same ballpark.
- I only have enough cash to buy one more house this month. I would really hate for you to miss out on this offer.
- I have 30 people a day wanting me to buy their house. You’re got to be really competitive with your price.
- If I came to your house with $100,000 cash in a suitcase, would you tell me no?
- If you want retail price for your house, be prepared to have it sit on the market for 6 to 12 months.
- What happens if you don’t sell your house?
- Help me, help you (Sound familiar? It works…)
If you can respond to seller’s questions, comments and objections, you will make a TON of money in this business. Again, it comes with experience. But, so does everything in this business. If your funnel is full, and you are speaking to tons of sellers, you will get good… really good. Practice makes perfect. And hard work, or putting in the hours, is one of the three components to extraordinary success.
The BIGGEST mistake in Wholesaling
I hear this so often…
“I got a bunch of calls off my bandit signs today. I called them back and a few have potential. So, I made an appointment to go see the house next week. I’ll call you back then and let you know if it’s something we should pursue” :
Next week is way too late!!!!!
In fact, tomorrow is way too late. HIS AFTERNOON IS WAY TOO LATE!!! Look, if this seller called you from a bandit sign, or an ad on Craigslist, or a newspaper classified or whatever, he most likely called every other sign or ad he came across, too. How do I know? Because most sellers and most people, for that matter, are not idiots. They know that the more people they talk to, the better chance they have of getting the best possible offer.
So, here is what you do:
- You speak to the potential seller on the phone.
- You gather the necessary information with your handy lead sheet.
- You tell the seller you are going to do some research and get back to him (or, if you have knowledge of your city and can determine the ARV while on the phone, you can skip 3 and 4 and go directly to step 5).
- You research the property online, by pulling comps and determining ARV. And you decide, right then and there if this is a viable opportunity for you. This should be done in about 15 to 20 minutes.
- You call the seller back and say, “Mr. Seller, I did some research and spoke to my partner. Based on the information you’ve given me, and the information I gathered on my own, I can offer you $_____ cash for your house.”
- (If needed) You negotiate, using the rebuttals and responses above then agree on price.
- YOU GET IT UNDER CONTRACT TO PURCHASE!
If the property is within driving distance, and the seller is home, you get in your car and drive there immediately. If you can’t make it at that moment, or if the seller is not available, you find the next best possible way to get your contract signed… now.
An in person meeting will greatly enhance your chances of actually getting the seller’s signature on the contract. You think just because you received a verbal agreement, that he is going to honor it? One would hope so, but it is far from guaranteed. It is much more difficult for him to back out, however, if you are standing right in front of him. People are not usually idiots… but most people are cowards. Even if they’ve received a better offer before you arrive, when you do, they will usually cave in and fall back to your verbal agreement. That’s just human nature. Most people want to avoid confrontation as much as possible. Good thing you and I aren’t most people… Ok, so you came to a verbal agreement on the price, over the phone. The seller is not home, but at work, so you can’t drive the contract over.
What’s the next best thing?
Fax it or Email it
Get the seller’s work fax number and fax the contract over. And make sure you follow up as soon as it’s sent. Fax it, wait about 10 minutes and then follow up with a call. And, take a few minutes to ask if he’s had a chance to look it over, and if he has any questions. If he does, kindly answer them… and then ask him to sign and date it, and then fax it back. Explain that the quicker you get the contract back, the quicker you can get to work getting his cash. Don’t act desperate. But push… oh so gently.
Without that signature on the contract, you have no legal right to that property, nor do you have any leverage whatsoever. Once he signs, legally he cannot sell his property to anyone else, while your contract is still valid. If he does, you simply go to your county courthouse… and cloud his title. That will keep him from being able to close with anyone else. That doesn’t happen that often, though.
If you can’t drive it over, and absolutely cannot fax it, you can email( it or send it by mail. If you do email it, make sure you put the contract in PDF format, so he cannot change it! I feel much better about email when the contract is converted to a pdf. That way, the seller will have to print, sign and either scan and email, or fax or mail.
The postal service is the absolute worst way to send out a contract…. If you already have a verbal agreement established. Now, if you’re making a blind offer, which has not been given verbally first, then by all means, mail it. It will probably get rejected anyhow, since the reason you’re mailing the contract instead of giving it verbally is because your offer is WAY lower than the seller’s expectation. So, go ahead and stick in the mail, if you so desire. However, if you and the seller have already come to an agreement on the purchase price, exhaust the other ways first, before dropping it in the mailbox.
The Money is in the Follow Up!
So, what do you do when your offer is rejected?
1) Get the seller has a hard copy contract in his or her hand, and has your contact information, and
2) FOLLOW UP!!!
Most of the offers you give are going to be rejected. That’s just a fact of life in this business. Many sellers are optimistic, to a fault, about their ability to sell their home, at their desired price.
So, you make an offer over the phone and it’s rejected by the seller. You fax or mail a contract for the same amount you verbally offered to the seller. Then, you put a reminder somewhere to follow up same time next week. If it gets rejected again, you repeat. Do this every week until the house is either sold, or taken off the market.
Listen, it is imperative that you stay top-of-mind with the seller. If you simply make an offer over the phone, get rejected, then move on to the next one, you are certainly missing out on some easy money. I mean, how difficult is it to jot down a reminder and call up a seller?
Here is how it goes:
Hi, Mr. Seller, it’s ________________ again. We spoke last week about your home. Listen, I just wanted to touch base with you and see how the potential sale of your home was going. I want you to know that my cash offer still stands. If you need me, please do not hesitate to call. Take care.
I can’t tell you how many times I’ve followed up, months after having an offer rejected, only to have the seller meet my price and terms. Some sellers are logical about their situation. Some… are just delusional. For those individuals, you need to follow up, often. Failing to do so is just stupid!.