What questions should I ask?
It’s critical to the success of your real estate business that you learn to ask the right questions when someone calls. Getting the right information will help you to quickly determine whether or not you are dealing with a motivated seller. If this person is not a motivated seller today, it doesn’t necessarily mean that they won’t be motivated in the future. Time and circumstances change all things.
Regardless of which category they fall in to, I have a rule of thumb that I follow. As long as the house is one that I would be interested in purchasing, I keep them on the mailing list until one of these things happens:
- I buy the house.
- Someone else buys the house.
- They ask to be removed from my mailing list.
That’s it. Don’t disqualify someone because they aren’t a motivated seller today. Keep on marketing to these folks.
What questions should I ask?
To be sure that you don’t forget anything, you should always use a property information sheet. Keep a stack of them nearby when you are talking to sellers. If you do that, you will always get the information that you need. Some of the things I have on my property information sheet are listed below.
First I get all of the contact information
- Their name and the property address.
- The name of the person that actually owns the house. The person calling may not be the decision maker.
- Phone numbers. Try to get all of their phone numbers.
- Their email address.
- Whether the property is vacant or occupied. If it’s occupied, who lives there? Is it a tenant, a relative etc? This will have an effect on how you can access the property.
- In the far right corner of the property information sheet I list the referral source and the type of referral.
*DM –Direct mail campaign
*PR – Probate
*OT – Out of town owner/absentee owner
The state is for absentee owners. I want to know which state they are calling from so that I know the time difference. I don’t want to call them too early or too late. If the referral is from some other type of marketing I will just note this on the sheet.
Next I get all of the property information
- The number of bedrooms and baths.
- Whether it’s built on a basement, slab or crawl.
- The style and type of construction such as “brick ranch”.
- The ages of all the major systems such as the roof, HVAC, etc.
- The type of fuel used for the heating system.
- When the kitchen and bath(s) were last updated.
- Types of flooring: carpet, hardwood or other type.
- Be sure to find out if all the utilities are on in the house.
- Ask them what repairs and updates they would do if they were to live in the house. You will be amazed at the information you will get just by asking this one question.
The next questions that I ask tell me about their motivation
- How long have they owned the house?
- Why are they selling? (What’s their motivation)?
- What is their asking price? You want to find out what their expectations are.
- What the house is assessed for. Most of the time they have no idea.
- If the house is listed. If so, who has it listed?
- Do they have other properties to sell? Never forget to ask this question.
The forth section is existing mortgage information.
Get specific information on what is owed on the house. You may find out very quickly that you can’t help this seller no matter how motivated he is if there is no possibility of a short sale.
The last section is where I come up with the MAO.
In this section of the form, I list the ARV and the dollar amount of the repairs needed. Since I am a wholesaler, I also have a place to list the wholesale fee I want. These figures will tell me my MAO or my “maximum allowable offer”.
I have set the form up so that I can put two sets of figures in this area. I usually figure the MAO for a complete rehab, and a “to rent” MAO. For instance, landlords won’t necessarily do the same level of work that a rehabber would do for a retail sale. Many landlords would be OK with a bathroom that had pink tile if it was in perfect condition. After all, they won’t be living there. Doing this second MAO gives me another way to “create a deal” if I can’t get the seller quite as low as I need for a rehabber to buy this house.
When dealing with a motivated seller, ask them what it would take for them to “unload” the property; to be rid of this headache. What problem do they need to solve? Remember, it’s not always just about the money. When they have given you a number, wait a little bit before responding. Then ask them, “is this is the best you can do”? Once again, just wait. Wait for them to speak first.
You will be amazed at the number of people that will immediately drop their asking price significantly. Finally, ask them what they will do if they don’t sell the property; if they get stuck with this unwanted house.
If you use the same form each time you speak with a seller, you won't forget to ask important questions. It will also help you make a good solid offer on the property.