February 10, 2016 in Investing In Real Estate
When you are a real estate investor, sales conversion is definitely something you have to master and it’s not something that comes easily for most people. Today’s post is all about sales conversion AKA getting the deal.
How many times have you heard someone say, “I’m not in sales”? Here’s a newsflash for you; you are in sales. Everyone in business is in sales whether you have a product or provide a service.
But here’s the big question; do you need to act like a sales person to succeed?
No you don’t and you shouldn’t.
4 Parts of the Sales Conversation
To get really good at sales conversion, you need to be really good at not looking like a sales person.
We are there to help the seller solve their real estate related problems. When you can do that, you will typically be able to close the deal. You want the same outcome no matter which approach you take.
However when you are skilled at this process, that “somewhat motivated seller” will become motivated to work with YOU. They will choose you because you are a problem solver rather than someone that acts like a sales person.
What is their desired outcome and how do you intend to provide that?
Your motivated seller wants you to clearly explain the outcome they can expect when they work with you.
Before you can deliver the outcome you need to know what it is they want and need, and this is the tricky part. You have to learn to be patient and listen carefully for clues.
You can’t be thinking about your next appointment or the ballgame on Saturday and pick up on those subtle clues. When I say you need to be a good listener, I mean you need to put all your attention on that conversation with the seller. If you let the seller talk long enough, they will often tell you exactly what they need you to do to get them to sign on the dotted line.
You know they want cash (they almost always want cash), but what is that “something else” they want or need? Maybe their “something else” is big enough they will be willing to provide terms instead of asking for cash.
Once you know what their desired outcome is, you can begin to work toward finding a solution to provide that outcome.
Let Them Do the Selling and the Discounting
During your conversation with the seller, “evidence” will come up.
This will be things like the house needs a new roof, a new furnace or something else entirely. You are there to inspect the property. However once the seller has laid out the evidence; told you about all the repairs and updates needed, they are the one doing the discounting where the price of the house is concerned – not you.
The beauty of this process is that the seller is the one that has opened that door to lowering the price.
I like to repeat those repairs back to the seller while I am writing them down. What you need to say then is, “Given all of the repairs and updates you have told me the property needs, what price would you be willing to sell the property for”? This is the point to ask the question so you know what their expectations are. You want the seller to name the price where you will begin the negotiations.
Changing the Seller’s Expectations
The third part of the sales conversion process is changing the seller’s expectations.
When you let the seller tell you about the flaws in the property, this begins the process of changing the seller’s expectations. This is an important part of the sales conversion process.
As you are listening to the seller and learning their true motivation, you should know by now what they are “hoping” to get for the property. And, it will almost certainly be more than you intend to pay.
If you have guided this conversation properly up to this point, you will be able to have a discussion that leads them to the conclusion that their price is not going to work for you. They have lowered their own sales price.
Uncertainty Creeps In…
Before you showed up to give them a dose of reality, what was their plan?
They should be having a reality check (even though they probably won’t say that out loud). Uncertainty should be creeping in.
- Did they start out thinking that if you didn’t buy the house, they would just sell it themselves?
- Maybe they were certain they could find an investor to simply pay the price they were hoping to get (a newbie investor).
- Was their back up plan was to list the house on the MLS?
Whatever their original plan was you should have planted a seed of doubt like one of these:
- Investors just aren’t able to pay that price for a home needing so many repairs
- Buyers looking on the MLS don’t want to have a lot of repairs to do so they will most likely ask the seller to do them
- When a house is for sale by owner, you have to do all the work an agent would normally do
- You will have to finish cleaning out the house before you can sell it yourself or with a Realtor
Whatever their original plan whatever was, by now they should realize their expectations were unrealistic. Whether they accept your much lower offer will depend on a number of things including the relationship you have built with the seller at this point.
Did you manage to sell yourself and your ability to provide a satisfactory outcome for the seller?
Don’t be so over confident you’re intimidating to the seller. Be confident but stay humble. If the seller says no to your offer remember this –
If you’re not already subscribed to the “Inner Circle”, be sure to do that today so you don’t miss any of the business building tips I have coming your way. I want this year to be your best year ever! And if you enjoyed this article, please share it.