Being able to construct a perfect script will require years and years of successes and failures; trial and error, they say. But you don’t have to do all that – you won’t have to waste another opportunity to make money just because you didn’t say the right things. So, here’s how you make the perfect script for talking to motivated sellers:
How To Be A Negotiating Ninja
To master the art of negotiating, there are two main things you need to focus on:
- Getting a Yes
Get them to a point where they say yes. Once you get them to say yes, then it’s a done deal. You wouldn’t have to exert effort to convince them.
No offense, but a lot of real estate investors try to oversell who they are and what they have to offer. If it works for you, then good. But to be honest, if the seller is motivated to get rid of their property – maybe because of a housing problem or a family problem – whatever the case may be, all they really want is a solution, a way out. So, the goal of the ‘perfect script’ is to feed their motivation and get them to say yes.
Yes To What?
Good question. But really, it’s all about getting them to say, ‘Yes’ to every point of the transaction. Getting them to agree to:
- Sell the house
- Meet with you
- Sign the agreement, and ultimately
- Close the sale
There are different points of yeses throughout the process.
It’s all about getting people to affirm your goals, namely to buy the property with a price that makes sense to both parties.
The Perfect Script
Your negotiating conversation has to start somewhere, and it mostly begins with your phone.
The First Phone Call
The first phone call can only go one of two ways – either you call them back or they’re calling you in response to your ad or whatnot. There are investors who would answer the phone live and talk to the seller straight away. But you can actually delegate this task to your secretary or VA.
Most real estate investors don’t answer phone calls live. This is because they want to gain the upper hand even before they start talking. They want to obtain the seller’s basic information and have them screened.
Before you call them back, know their address and the condition of the house. With this basic information, you’re able to make a quick market analysis so you’re now armed with information. You can devise ways to structure your conversation.
It’s very important that you’re geared up for the conversation and that you grab the reins and take control. There is nothing worse than having the seller call you and you’re in your car driving. You can’t sustain a conversation this way.
Sometimes, even when they’re prepared – they are in the perfect situation and the perfect space to take a seller’s call -, most investors will always tell the seller they have to call them back. So, they hang up, wait for a few minutes, and call them right back. This is connected to taking control of the conversation.
You have the advantage of initiating the phone call (even if you just called them back); therefore, you’re expected to drive the conversation. It puts you in the driver’s seat rather than riding shotgun, listening to all the information from the call you just received.
What You Say To Them
The first question would go like this, “I received all your information. Are you interested in selling your property or are you just testing the market?” This question only gives the seller two options: whether the seller is rushing to sell the property or if he/she is still testing the market – no rush, whatsoever. This simple question immediately dictates how the rest of your conversation is going to go.
If the seller isn’t quite motivated to sell, you might want to drill down a bit and ask why. Then ask them again, “Do you have a reason to sell? Maybe in the next few months or year? Is there a reason that you would even need to sell?” If they say no, then you might want to figure out a way to politely get off the phone.
But what if the person on the phone, instead of being a motivated seller, would say, “I received this postcard from you and I’m calling to find what it is about” or “I’m just curious as to what you have to offer – no strings attached.” How would you respond and possibly get a deal out of it?
Your best response would be something that goes like this, “Well, we buy properties. Is that something that would work for you?”
Essentially, you’re trying to capture the people who are really motivated to sell. But if the prospect says that he/she doesn’t have to sell the property now but would probably sell it in the next six months, you can put them on a direct campaign and do follow-up phone calls.
So, the first question is usually general, then you dig deeper and communicate exactly what you need from them. Try to get them to tell you the emotional aspect of why they want to sell the house.
Do A Little Digging
When negotiating with sellers, most investors want to cut to the chase and directly talk about the house– the number of bedrooms, bathrooms, how big is the property, are there any repairs needed, etc. They’re too busy negotiating about the house. Which is fine if it works for you, but if you want to be in a more advantageous position, you have the find out the ‘why’ in their situation.
In this perfect script, you don’t bring up the house until you know what motivates them to sell. You want to dive into the heart of their motivation by asking them about the situation they’re in.
To know their motivation for selling, you can simply say, “Tell me about your situation.” It’s a broad statement, but their answers will tell you a lot as to why they need to sell their property. Think about it this way: what you’re offering them is not a price for their house, what you’re offering them is a solution to their problem.
If you directly ask them about the house and shoot them an offer without knowing the crux of the situation, the odds of them being excited about your offer for their property aren’t as good. It won’t be as palatable as naming the price and tying it as a solution to their situation.
Figure Out The Type of Person You Are Dealing With
Along the way, try to figure out what type of person you are dealing with. Keep in mind that when you do deals, it’s not about you – it’s about the seller. You need to know their personalities – do they tend to be emotional or logical? In the real estate industry, you have got to be a chameleon to stay in the business so you know how to properly structure your responses and strategies.
How To Deal With Pain
How do you deal when people express their problems and pain to you? Even if you think it’s a waste of time, take this opportunity to truly listen to them. The next thing you should do is to reaffirm them and give them the confidence that they’re talking to the right person to solve their problems.
Reaffirm them by saying that you love the area, you buy houses there, and you’re excited to work with them. A little reassurance will go a long way.
Set Out A Price Range
When you talk to sellers about the selling price of their property, there’s a 50/50 chance that they’re going to give you a number or they would say that they’re not sure. But let me tell you this, they do have a price in mind – they’re just telling you otherwise. All you have to do is to get them to tell you their number and there’s a strategy in doing that.
Since you pre-screened the property, the area, and the condition of the house, you already have an estimated price in mind. When they ask you regarding the price you have in mind, it is crucial to give them a price range instead of a single price. You shoot them a really low price and then tell them your top range. You can say, “Typically, in your area, we buy houses in the range of $40,000 to $60,000.” Before they can respond, ask them, “Is that a range that would work for you?”
This strategy has a 100% success rate since sellers would either agree or disagree with your proposed price range. If they disagree, ask them their number and they’ll most likely answer you specifically.
If they agree to your range, the next step would be asking them for more information if you don’t have all you need. You may ask them specific details about the condition of the house and build rapport with them. You can also chat about personal stuff and go back to their problem. Once both parties are satisfied, you can now set an appointment for you to see the house.
Take A Look At The Property
It may seem a little counter-intuitive but don’t focus too much on the house. When you first come in, you say the pleasantries and chat for a bit, and then you ask them to tour you around the house.
Remember not to focus on anything negative because if the house is obviously in bad shape, the homeowners are probably aware of this themselves. You don’t have to rub salt into the wounds by saying they have a dilapidated kitchen or the roof is in bad shape. There’s no need to reinforce the negative. You are trying to set a positive experience for everyone.
The next step would be asking them if you can take photos of the house. Most of the time, sellers always agree to this. So even if you don’t talk about the negative parts of the house, you can always take note of it through pictures.
How To Handle The Following Situations
Even though you have the perfect script ready, you still can’t possibly predict the responses of the seller. Here’s how you should react if the following situations arise:
There will be times when sellers have an unrealistic view of what is needed in the home they’re selling. They may tell you that the house is in perfect condition but looking at it tells you otherwise. How can you tell them that the house is, in fact, old and outdated without raining on their parade? Well, you give them a dose of reality. You can say, “Let me ask you this: If you put the house on the market and a buyer comes in through the door, what do you think they’ll think about the house?” All you have to do is to listen to what they have to say and allow them to come to the conclusion themselves. In this way, you’re only backing up the opinion they just formed, rather than trying to persuade them into changing their beliefs—putting you in a safe position. Self-actualization is the strongest tool you can possibly use in negotiating. It’s much easier to get them to say yes than having to force them to do/believe something they don’t really believe in.
There will also be times when, no matter how positive you are, the conversations take a negative spin. There have been countless instances where sellers became very angry just because they thought their house is worth more than what you proposed. They feel defensive, as if they have been they have been taken advantage of. In this case, you really don’t have to force yourself on them. All you have to do is to stop and say, “If you’re not excited about this opportunity, I don’t think we are going to be the best match. I would rather leave now and have you happy with what I have told you than insult you.” And that’s it. You’re free to go. Most of the time, these sellers stop you from leaving and change their minds. So in the end, you still get that property.
Remember that the ‘perfect script’ is just a guide so you can properly talk to motivated sellers and help you land that deal. But at the end of the day, you’re the only one who can make a ‘perfect script’ that will perfectly work for you.
- Start with a clinical approach. If you’re just starting out in the real estate industry and you don’t have solid systems in place yet, then following this perfect script is a great way to catapult you to success.
- Practice, practice, practice. You have to practice what you just learned. You can do it in front of the mirror by yourself, or better yet in front of your family or mentors who can coach you while you practice. Practicing won’t cost you any money. However, screwing things up in front of a seller can cost you money – lost opportunities, lost deal.
- Look approachable. If you want the sellers to warm up to you, you have to be approachable and friendly.
How do you handle objections from sellers?
Share with us any lessons, falters, or good ‘ol fashioned mistakes to warn others about? Share below! We’ll take the best ones and write about them in a future post.