Presenting Low Offers To Sellers…
There is a skill to it. It’s not quite as easy as sending out a mass offer, or blind email… chances are, if you are newer to real estate, chances are, you’ve felt that moment of uncomfortableness.
That moment when you are face to face with a Seller. A motivated seller at that! You are uncomfortable, and you want to offer a lot less than they want!
You’ve heard all the people say, “if you aren’t uncomfortable, it’s not low enough…” Many times, this is why you try to get them to agree with you on on price over the phone, or try to “lock up a deal” over the phone.
It’s a lot like hurling spaghetti on a wall.
You definitely don’t want to confront the Seller on price… and you certainly are not going to write the offer right in front of them if the number is a lot lower than they expect. Honestly, it’s a miracle that we get paid at all given the way we act!
To help you increase your chances of getting your contract signed, I’m going to share with you a few ideas that will help you present your offers powerfully!
You Must Have Confidence!
If you are new, many times, you lack confidence! That generally is the biggest problem that I have discovered amongst all the newer agents and investors that I have coached over the years.
Without confidence in your abilities, you lack the power you need to win! You typically start out in this business lacking the belief required. It’s ok! Everyone fails a bit the first few times.. But understand that this failure is what is required to give you the belief that you can keep going when times get tough!
As you learn what to say in a given sales situation, and become more comfortable responding instantaneously to them, you gain power and confidence!
Simply… because you had the words to say!
Personally, I am partial to “The Pawnshop Presentation”. Most people are familiar with a pawnshop. They don’t associate any negative feelings towards it. Yet, it provides an amazing model of the real estate wholesaling business!
By explaining that a lot.. (not all) of what you do is like a pawnshop, it is easy for people to understand you are a different type of buyer. This allows you to have the confidence to tell them the truth about the values during your comparable presentations!
Which undoubtedly leads us to the next point…
You Must Have Knowledge!
In order for you to present powerfully, you must have market knowledge. In order for you to handle their objections however, you must share that knowledge.
In order to do this, you need to present comparable active and sold properties after you have toured the home.
Personally, I would recommend you pull comparables in the same way an appraiser would. Have your agent pull all the currently listed properties as well as the sold properties in the subdivision your subject property is in. Look only for those who have sold within the past 6 months.
This is why it is so critical that you establish that relationship with a powerful Realtor®! Get 3 actives, and 3 sold comparables. Show the comparables to the Seller one by one interactively.
You don’t want to use more than three because too many will confuse the Seller!
After you have established values in the area, ask them what price they feel is fair for their home. Understand that at this point, they still are under the impression that you are a regular buyer, so don’t freak out!
Their number will more often than not, be fanciful at best. Don’t worry.. it’s simply a matter of education at this point.
Make the Pawnshop Presentation as we teach on our Podcast called “The Red Pill Investor!” Emphasize the differences of your offer versus what they might be expecting on a MLS deal or by going by owner.
Present With Power!
Your offer is different than any other offer they will ever have! For about 95% of the people you deal with, this is their first time with an investor.
As such they think your offer is just like any other. You have to point out why it’s different!
Not only do Pawnshops buy with the intent to sell, but they buy with cash. They pay all “closing costs”, take it “as is”, subject to some sort of inspection.. and of course close fast!
What a perfect model for our business!
Present this idea as an alternative to listing their home or selling by owner. Your offer is different! And that is why its less!
As an all cash offer, there are no contingencies, other than your inspection period.
Because it is as is, where is, they don’t have to lift a finger! Because you pay closing costs, there is very little they need to worry about other than ensuring the amount you offer pays off the lien of the home.
Close With Confidence!
In order to help a Seller discover what solutions will fit for their particular situation (i.e. wholesale vs. list, subject to vs. cash offer) Use what is called “The Abraham Lincoln Close!”
Abraham Lincoln as an attorney was very good. What he would do is argue both sides for maximum effectiveness. He would point out good points of his opponents argument. However, he would make his argument even more compelling
In a Real Estate application, this is done by asking powerful questions!
“Yes you could do “X”. However, do you have the time?”
“Of course, you could sell yourself, however have you considered the problem that creates for you?”
Hopefully you now have the confidence which will cause you to share the knowledge that you have!
This will give you the power you need to talk about price with authority because of the knowledge that you’ve acquired and shared.
By asking powerful questions, about their motivation you will be able to demonstrate how your offer… while low, isn’t the same type of offer they might ordinarily expect.
This will give you the ability to present powerfully, speak knowledgeably, and close efficiently!
Have a Powerful Sales Day!