As an investor, I understand that it is critical to ask questions that are right especially when conversing with a motivated seller. Every time I get the right information; it helps me to ascertain whether I am trying to iron a deal with a motivated seller or just someone who is not serious doing business. The real fear that most investors face is the likelihood that the seller will admit or reject their offers; this phobia is very intense that even the seasoned investors are afraid of calling or answering calls from motivated sellers. In fact, some investors send out massive direct mail campaigns to boost their businesses but do not make or answer phone calls from sellers in response to their mailings. This is unnecessary wastage of resources. You may be a beginner in real estate business, or you may have been struggling to handle direct conversations; in this article, I have provided valuable guidelines that will help you gain the much-needed confidence and skills to negotiate the best deals with ease and guaranteed high chances of success. Being as experienced real estate developer, I understand what sellers would like and what they would not like to hear from potential buyers. Observe the following tips for the best results in the conversations with motivated sellers.
Be confident throughout the conversation
Confidence is the most important resource going into the conversation with a dealer. Your mindset must be prepared and well-organized for a smooth flowing conversation. You must forge positive mentality that you will secure the deal, and this can only be realizable if you avoid being negative and self-doubting before calling a seller. From experience in the industry; all the conversations I got into with negative mindset turned out to be fiasco whereas the ones that I approached with confidence I successfully struck the deal. Although confidence tends to build with time, I can assure you that you can get a terrific deal right on your first attempt if you are confident enough. You should keep improving on your confidence every other time you enter into negotiations for the best results in the future.
Be honest and speak your intentions
Motivated sellers in most cases do not expect full retail amount for their properties as they are usually forced by circumstances to sell. Therefore, although it sometimes sounds like you are not helping them, you must be honest enough and speak your intentions upfront. Professionally, you should commence with explaining yourself to the seller and include a sentence like,"I purchase property on discount," just to create awareness. They should also explain themselves and may be telling the reason as to why they are selling their properties. Before you negotiate any further, let the seller explain to you the most important aspect to him/her - whether it is speed, price or convenience that matters the most. To me, if it is the price that matters the most, I genuinely tell them that I am not the right client since my offers don't match their expectations. Clients who value speed and convenience are usually the best prospects for discounted deals.
Prioritize the sellers and don't be an opportunist
As an investor, you must understand that sellers are only confronted with motivation reasons that compels them to sell their properties, therefore, they would prefer a compassionate buyer. For this reason, you must present yourself with integrity and authenticity. Portray yourself as a person who intends to help them, and this will only be possible if you are organized enough and if you allow them to elucidate their stances before you respond. Being a true friend would be the best way to talk with motivated sellers. Make it clear to them that even though you do not offer retail prices for their properties, you give the best-discounted prices.
Create a scenario where you both win
Sellers win when you offer the best-discounted price(s) for their properties to help them sort their compelling problems, and you win when you purchase these properties at discounted prices. Make the sellers feel that you are there to help them solve their problems by offering prices that are not ridiculous. Make them feel that you are the best buyer they can find and that they are lucky you will strike deals with them. However, remember that you in business and you should make deals that are of economic impact to your business. Every investor who intends to prosper in the industry should strive to achieve this win-win scenario.
Give a price range
When in these conversations you must always have price ranges for the properties in consideration supported with reasons. For instance, if a seller intends to sell a house worth $200,000 quote a price of around $100,000 and give reasons for your quotation. You can say, I am willing to pay one hundred thousand dollars because this is the prevailing price for such houses where I stay. Let them understand that you will have to sort out some structural issues for their properties to be of the required market standards. What matters most is the way you explain and not necessarily the price tag you set forth. Sellers will not be upset because you will have adequately given them the reasons supporting your intended bid. However, you should not be too rigid with your tag, and you should allow clients to explain to you their expectations too and this will help both of you to agree on a bargained price.
Provide to the seller spreadsheet of expected costs for the property
Explain to the seller that you will have to do renovations before his/her property is ready for re-selling. You can say, I will need to renovate the house using almost eighty thousand dollars. This will make the seller understand that his property is in reality not worth his/her asking price. A written spreadsheet will serve this purpose the best, but your cost estimations must be reasonable and objective. I would advise you to visit the property for sale for you to identify areas that will need to be renovated or redone.
Give the seller time and space to think
Most sellers do not prefer buyers who push them to strike deals. They dislike being hurried in making decisions. Therefore, when you call motivated sellers and manage to have active conversations, you should learn to give them space to decide objectively on their own. As noted earlier, they look for someone more of a helper rather than a dealer. Allowing them time will provide room for them to exhaust the available options and make informed decisions.
Maintain control over the entire conversation
Some sellers are excellent when negotiating deals, and you should be aware of that. Such sellers are likely to convince you to pay more than you should. Maintaining control over the conversation will allow you time to convince the sellers that you are the right person to purchase their properties. Therefore, you should control the conversation and always be steadfast to give favorable guidance and professional explanations to your clients. Be the one to mold deals as this will direct everything move your way.
Understand if the deals don't materialize
There are many options for sellers to weigh out so to get the best deals. If a seller finds your offer less appealing to one provided by another investor and chooses to abandon dealing with you, be understanding and remain polite as this is the principle of sanity in this industry. Expectations of sellers are always high, and they would prefer to deal with buyers who match their asking prices or those who are very close to the price tags they attach to their properties. It is very demotivating when for instance, one sells his treasured property at half the prevailing market prices. The best bidders win the deals.
Make friendship with the seller
You should never forget to create friendships with your clients. Being polite, understanding and showing readiness to help them solve their problems converts you to a friend rather than a dealer. If you manage to make friendships with your client(s), then there are high chances that you will trade with them in future. In fact, most sellers choose to deal with business friends offering lesser bids for their properties than aliens offering higher bids. A business friend is likely to refer his motivated seller-friend to you because he/she once felt brotherly/sisterly concern from you.
Set Appointment/Consistent follow up makes a huge difference in getting offers accepted:
Your deal has not been completed without an Appointment with the seller in the case of an new lead. You're to make a appointment that will enable the deal to be genuine selling lead and to value the property in question. while for consisten follow up is necessitated until the property is sold. Once they have accepted your offer, a seller goes into the under contract to buy status. in this status, you start preparing for closing or trying to wholesale the property. As soon as you close on the property, you turn that into the bought it status you start treating the property either as a rental or for sale. If a seller ends up selling their house to someone else or tell us it is no longer for sale, you will mark that property with a "DEAD" status. you do not follow up with sellers that have properties in a dead status.
The way you talk to motivated sellers will determine your prosperity in the industry. You must be smart, organized, compassionate and honest for you to stand at better chances of securing such deals. The traits mentioned above will present you as someone who is ready to solve problems that push them to sell their properties and not an opportunist who is out to make money. Although many investors find it challenging to present themselves as friends to the sellers with discounted bids, confidence and organized conversations will make your negotiations for deals successful. This industry requires investors to create and maintain friends as this plays an instrumental role in future referral deals. You just need to follow the above-elucidated tips, put them in continuous practice, and you will be a successful real estate investor sooner than expected.