Jim FL
03-23-2005, 11:08 PM
Ryan,
I think I can guess what the problem is already.
When you talk with a seller, you are making an offer to buy their house, subject to, correct?
That is the wrong approach.
Here is how I handle it, and the process begins when the phone first rings from the seller calling you.
Start with this premise in mind......
You are providing a 'service' to sellers need.
That service is to buy their house, if you can do so and make a profit at the same time.
So, when the phone rings in the beginning, answer it to set a tone...........'how may I help you?'
Sellers calling you to sell, and now they must tell you that.
In fact, let's run down a sample seller phone call.
I'll make something up that is typical for me around here.
Ring, ring........
You: "Hello, Ryan Home Solutions, how may I help you?"
Seller: "I saw your ad and wanted to know how this works?"
You: Which ad did you see? I have a few out there?
Seller: The one that says you buy houses.
You: Yes, that is me, just like the sign says, I buy houses, that is how it works. Do you have a house you want to sell?
Seller: Yes, we do, here in anytown, your state.
You: Where is your house located? the address?
Seller: 123 main st. anytown, your state, by the mall.
You: By the way, my name is Ryan, what is yours?
Seller: Betty Grable.
You, Betty, nice to meet you.
You: Okay Betty, well, the first step to see if we can help you or not, is to learn about your house. Can you describe it to me, how many beds, baths, square feet, that kind of thing?
Seller: Sure, we have 3 bedrooms, 2 full baths, a family room, fireplace, large kitchen with an island, skylights, 2 car garage, fenced yard, blah, blah, blah, blah.......
***Let the seller speak here, and listen, taking notes about the house as you go, perhaps interjecting a question here and there, like 'betty, a 2 car gagage, okay, I'm taking notes, bear with me, is that attached?, or, 'any repairs that you know of needed on the house?***
You: Well, your house does sound like something we might be interested in buying, and sounds nice. If you don't mind me asking, why are you selling it?
**This is where you shut up, get quiet, let their be silence on the line if need be, and WAIT FOR THE SELLER TO SPEAK. This will help you determine whether they are motivated or not, perhaps the reason(s) as well, maybe not, sometimes you never know.**
Seller: Well, my husband was offered a job transfer back to our old home town, and we can move there into his sisters house, she just moved, but we cannot afford to keep making the payments here and pay rent there, even with his new raise.
You: Well Betty, let me tell you a little about how we work.
We buy houses basically one of two ways, either ALL CASH, for a SEVERE DISCOUNT (you want to use STRONG language when describing your discount, because most sellers think 2% is HUGE), or on terms.
Before we can determine which one of our 'programs' wil fit your needs, if any, we will need to gather some basic info about the house, your situation, the financing on it, and of course, inspect the property.
Do you have a few minutes time now to take care of some of that?
Seller: Sure, I'm just home today packing......what do you want to know?
You: Well Betty, you said you don't want to have to make two payments, and that I fully understand, doesn't sound like too much fun. So, the financing on the house, how much are those payments?
Seller: They are $927/month
You: Okay Betty, does that include the taxes and insurance?
Seller: Yes it does.
You: Betty, do you know about what is still owed on the loan?
Seller: Yes, we just bought this house 5 years ago, and refinanced after our first year to lock in a rate, so we still owe about $120,000 according to my last statement.
****Now see, as you gather info here, the numbers, you should already know your market well enough to determine, incumbent on verification of course, whether or not you can make a deal with those numbers in place.****
You: Betty, I really hate to ask this, but it is relevant, since many folks calls us in this situation, are the payments current?
Seller: Yes, they are. We have enough savings to cover it for at least 5 months after we move, but if it does not sell by then, we don't want a foreclosure on our record.
You: You are right, a foreclosure is not pretty on the old credit report, and might even prevent you from buying a house later.
Betty, I'll tell you what, your house sounds nice, and the numbers don't seem too high for us. The payments are a bit steep, but that is because you have a 4 year old interest rate.
Based on what you've told me, I do think we might have a program that can help you, IF YOUR HOUSE QUALIFIES!
***Remember here, the seller has something to sell, not you. By telling them their house must 'qualify' for your service, or program, the burden is clearly on them. You DO NOT NEED TO BUY ANY HOUSE, and the seller here has made it clear, in their minds, they NEED TO SELL!***
You continued: Betty, I can tell you, our cash program won't work, because the most we could offer will not cover your loan balance.
So, let me ask you this...if we inspect your house and it does indeed qualify, which it sounds like it might based on what you've told me, what if we can take over your payments, cover taxes, insurance, maintenance, repairs, and anything else to do with the house? Does that sound like something that might work for you?
Seller: Yes it does! when can you come see my house?
You: Well Betty, we can set an appointment now if you'd like. There are a couple of things we each need to do in order to prepare. First, we need all decision makers present, so we need to speak with you and your husband while at your house. Also, it will help speed the process up greatly, if we decide to do business together, if you can gather your last mortgage statment, any paperwork for taxes and insurance, as well as perhaps any paperwork you have from when you refinanced the house last. This will help us gather the legal description and some other info, saving us both considerable time.
Seller: I have all that right here, I was just packing our master bedroom desk anyway, where all those papers are kept. I'll set them aside. Can you come tonight, my husband will be home by 6:00 p.m.
You: Betty, sure, 6 p.m. sounds fine to me. I'll tell you what Betty, I will call you about 30 minutes before our meeting to confirm, because I will be driving a slight distance. If for some reason you need to re-schedule, please call me before then. When you confirm, I'll then see you at 6:00 p.m.
And Betty, if you have any questions or thoughts, please, feel free to jot them down on scratch paper, and I'll gladly explain our programs to you and answer those when I arrive.
See you at 6:00 p.m.
********************
Now, see, you presented a 'service' to the sellers, via your 'programs', not an 'offer', per say.
you listened to the sellers problem, saw a possible solution, and presented the idea to the seller. they bit, and now you are going to go check out the house, get some things verified, or verification in progress, and close the sellers on the idea.
When you meet with sellers face to face, which perhaps I'll cover in another post sometime, since this one is long enough for now, if presented right, and the sellers can afford it, I'll show you how to not only get sellers to sell sub2, but to pay you to do so.
That's when these deals get REALLY fun!
Note: This seller conversation above has clues in it telling you that the seller might indeed be able, and perhaps even willing to pay you to buy their house. I'll show you that another time, unless you can guess the two things I'm speaking of, and how to use those to sell your program with 'no fees or commissions', but still GET PAID TO BUY!
As for handling the sellers objection of, "how do I know you will make my payments?"......that's really a simple one.
Tell them the truth........and if they can live with it, fine, and if not, NEXT!
Here is a simple long winded answer to that objection.......
Mr./Mrs. Seller, I understand your concern, so let me address it bluntly. IF I were to default on the payments, I'd lose the house, that's the first thing. Second, you'd know, because you can call the automated service line for the lender and check the payment status at any time. Third, should that happen, lenders will work to seek out the barrowers on the loan and send them notice, meaning, you'll probably get something in the mail if that happens.
Fourth point, that will not happen. This is my business, which I take very seriously, and use to provide for my family. Should I default on one house, it will effect everything I do, and I'm not about to jeopardize my entire financial life on one deal. You must be aware that by leaving the mortgage in your name, yes, ultimately, if default occurs, you are liable, not me. I don't plan to let that happen, have not ever had it happen, and don't sign contracts where I PROMISE to perform, and don't, I would not be in business very long if I operated that way. I also will be putting my resources into this transaction, and don't like to lose them, so I won't. I won't kid you, I am in business to make money, why else would I be? However, I have this philosophy, I will not EVER make money at someone else's expense. Most of my business comes from word of mouth, so conversly, if I default on something, I'd imagine my business would dry up pretty fast.........not something I will allow to happen.
Let me ask you this.....if I don't buy your house, what is going to happen?
Be straight with your sellers, its the only way. Trust me, if their is enough pain involved in still owning it for them, even if you don't know the real source, (meaning they can afford to keep it, but choose to NEED OUT for another reason), they will sign.
Bottom line, the sellers are called that for a reason........THEY ARE THE ONES SELLING SOMETHING!
You are simply there to fill in a solution, and if it works for them GREAT, if not............NEXT!
Anyway, hth some,
Jim FL
Jim FL
03-28-2005, 10:52 PM
Ok Jim-
Would you approach a FSBO that you call in the paper the same way as you would someone who called your ad? I should be smart enough to know this, but I am extremely sloooow today.
Must be all the snow we just got...
Thanks,
Ryan
Ryan,
First, I'll second what Dan says. I do cover this rather well in my materials, and even almost scream at the readers NOT TO COLD CALL!
It just doesn't keep new investors in the game very long if they do this........IMHO.
Now, there are some authors, teachers, gurus, investors, whatever you want to call them who do well with cold calls to FSBO's and teach to do so.
You know why?
Because everyone who buys a course cannot afford to market, and market right.
But guess what?
The newspaper, and streets are filled with ads for people wanting to sell their house.
Notice, they WANT to sell their house.
So, newbies turn to calling a few hundred ads, seeking that illusive motivated seller, and hear the word, 'no' over and over........do you think most stick it out and make deals from that bunch?
Nope, 50 "no's" makes most folks run, and run fast, because it does not work.
Now, perhaps once you've marketed to get sellers calling you, and have developed a method for speaking with sellers, and fully understand every option you may offer them to sell, then perhaps you might have better luck calling FSBO's.
I'll be blunt, I have not called any seller in a long time, who did not call me first......except once over the last 2 years.
Here is why?
I bought a very nice house to live in, correction, I lease optioned a nice house, great deal, when I arrived here in FL a few years ago.
I settled into the community, and so did my family, developing friends, and becoming just plain comfortable.
Sadly, that deal went bad, partially my fault, mostly the sellers.
I leave out the details for now, but suffice it to say, I walked, and moved to another location.
Thankfully, I own plenty of houses, and had one empty.
Sadly, it was not where my kids went to school, but we moved anyway.
I spent some time marketing HARD in the area where my kids went to school, in search of a new home for us there.
A few months in, with nothing on the horizon (its a sought after area, and I won't buy, even to live in, for market value), I made one call.
I noticed a house, one the family and I drove by all the time taking a short cut, as we drove the kids to and from school.
It had been listed for a couple months, and the RE agent/brokers sign was down, with a very small, balck and orange 'for sale' sign at the curb, on a painters stick.
It said, 3/2, must sell, bring an offer, xxx-xxx-xxxx.....in very small magic marker print.
I called, got a machine, and left a message.
I said this......."Hello, I was calling about the house for sale at such and such address. My name is Jim, I'm an investor, and have been looking for a house in that area. I need something FAST, so if you can sell right away, and give me possession with a week or so, please give me a call."
Well, the seller called back, and I live here now, buying sub2, for UNDER value, and within walking distance to my kids school.
I just 'had a hunch', based on the re listing being cancelled, and the small very inexpensive sign in the yard......and was right.
However, had I been a newbie, it would have been lumped in with a list of others, who said no, and I might have not even gotten to it to call.
So, don't cold call, get sellers to call you.
It is much easier, and if you read what I wrote above, follow with the sample seller call, and tweak it to fit your market and your personality, you will get deals.
Its much easier to sign up deals when sellers are trying to sell to you......instead of the other way around.
Don't be a motivated buyer, market AGGRESSIVELY, and then display a non-chalant attidude and deals will come your way, like they do for me.
I like this attitude, barrowed from my dear friend David Alexander...he said this first........
"Sell me your house.....or not!" and I live by it!
Take care, and HTH,
Jim FL
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