Qualifying questions

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Qualifying questions

Norm Chrostowski
Real Estate Investor · Lakeview, NY · Member since 2009 · 309 posts · 49 votes

I have been getting calls from my ads and mailers. While this is good, I can't help wonder if alot of these are a waste of time to even go look at. I mean, you can certainly get an idea of one's motivation by asking certain questions. But I don't want to be a D#@K, and just tell them flat out "I can't make any money with your property sir/maam". (I would never say that by the way, I have SOME phone/people skills) Who knows, they might know someone else looking to sell, and I don't want to burn that bridge.

My question is: Are there certain question you can ask right on the phone that will "qualify" these sellers? Tactfully of course. And if you don't like what your hearing, just politely tell them "your property doesn't fit our criteria...sorry". Or something along those lines.

Again, phone is starting to ring, and I've looked at, at least 30 properties in the last two weeks, and made offers on 3. I just don't want to be driving all over the place to look at something that's probably not going to work out. But I guess in my head I'm thinking "a lead is a lead, and you never know? I would really like to get this narrowed down over the phone to save some leg-work.

I've had calls from people who just listed or re-listed with an agent. Would you go see these? I've had several of these.

I don't want to sound like an idiot, I certainly know how to conversate. Just trying to refine my craft, if you will.


Thanks in advance for all replies.

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Andy J.
Wholesaler · Colorado Springs, CO · Member since 2009 · 286 posts · 255 votes
17y

Going through my list of questions, some will draw out motivation more than others if you listen well.

What is your remaining mortgage balance? I've found that typically unmotivated people will ask you why you need this, the motivated ones would give you their account number for the asking.

What is your mortgage payment? Same as above.

Are the payments current on the house? Good sign here of motivation, although a lot of people never get motivated enough to do something about it

Why are you looking to sell this house? I have found unmotivated folks to say: I'm looking to buy a new house in a different part of town, I just wanted to see what you would offer, I'm tired of this house, I've had the house listed for a couple weeks and no offers at asking price.

What is your asking price? Having them tell you "what I owe" isn't always a good sign of motivation but is more so than not.

What is the estimated value of the house? Ask this right after "what is your asking price?" and it will be a huge help in determining motivation. I think you'd be surprised at the amount of people who knowingly ask for more than its worth... BY THEIR OWN ADMISSION!!!!

When do you want to move? The asap answers are usually good motivation. This summer, or when I get a good price, or whenever it sells typically aren't good answers for me.

Is your house listed with a real estate agent? The yes or no usually doesn't help, but the explanation that comes along with the answer is good.

If you were to list the house with an agent, what repairs do you think would be necessary to put the house in retail condition? and pair this with How much do you estimate those repairs would cost? Many people think that new carpet, paint, and updating bathrooms is only $2,000 for a 2,000 sq. ft. house. Take their estimates with a grain of salt, again, the explanation is more indicative than the number itself.

Would you be willing to allow us to take over the payments on your house? This question is obviously eluding to a subject-to deal but will help determine motivation nonetheless. Not quite 100% but darn close of the motivated folks will say yes.

When can we arrange a time for me to see the house in person? If you get a "my grandkids are in town for 2 more weeks, after that would be ok" it's not a good answer. The "I'll be home from work in 20 minutes" really could go either way on motivation.

Hope this helps, good luck to you.

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  • Valerie Pedigo
    Real Estate Investor · Pittsburgh, PA · Member since 2009 · 73 posts · 18 votes
    17y

    Hi Norm - hope all is well!

    Are these deals not fitting in the wholesale mold? For example, ARV x 70% - repairs - fee = max price. You may have found leads for a different exit strategy. Let's say you have someone who wants close-to-retail for their house, but are willing to do a lease option or carry back financing.

    As far as narrowing down over the phone - I found some scripts that seem to make sense. Do you want me to email them?

    Bottom line is making an offer that fits into your numbers and if they think it is too low - then politely end the call and follow-up a few months down the road. They may be more willing then.

    Sounds like your mailers are getting great response!

    3Reply
  • Norm Chrostowski
    OP
    Real Estate Investor · Lakeview, NY · Member since 2009 · 309 posts · 49 votes
    17y

    Mailers are doing well, better than expected. Same with my ads.
    Don't know if "they'll' delete this, but my e-mail is [EMAIL REMOVED]. I'd love to see what you have, thanks.

    I usually don't consider an offer til I see the property. I'm trying to eliminate that leg-work, and ask very specific questions that lets them know I'm probably not going to offer full market value? (I'm exhausted, hope I'm making sense).

    Everything is based on 70% ARV minus repairs and my fee.

    0Reply
  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    17y

    You can ask tons of questions but it doesn't mean you will get the right answers as a lot of homeowners either don't know, are afraid to say things outloud, or they hope by hiding it you will be able to help them - like if they don't say it it doesn't exsist.

    Chances are you are not the first person they have talked to - nor the last unless you put them under contract.

    The only way not to be a D$*K is to not be one - you can be compassionate if that is your thing but I don't think you should pretend to be an angel either. Just be yourself that is the number 1 thing that trips most people up.

    Reading scripts are fine just know most will know your reading a script and after you do it 100 times it can come from the heart a bit more - so good practice.

    As for questions....depends on who you are calling - are you calling distressed sellers?

    - name
    - address
    - what is your situation
    - how did you get into it
    - what is the ideal outcome
    - are you willing to move out if I can help save your credit
    - how much is owed on your first mortgage
    - how much is your payment
    - does that include taxes/insurance if not how much are those
    - how many months behind
    - what have you tried to do to get out of it - why didn't it work
    - how much is your second mortgage
    - how many liens do you have for how much
    - has a realtor provided you with any value/comps of your home

    Bottom line is you want to find out why there are where they are - how much they owe - etc....the opening questions about tell me about you are designed to get you some trust with them - once they know you care a bit they will open up.

    Frankly - you need to pretend to be making an offer right there on the phone - get all the info you need to make an offer - then run comps and do your own research - but if your going to 30 homes and rejecting 27 I would ask yourself why you rejected them when you saw them - what was it you found out that you didnt' know and come up with a question.

    - condition of home
    - does your home need any work
    - what is the age of the furnace/hotwater/plumbing/windows/roof/kitchen etc.....

    When calling families I would find out all you can.

    But as Valerie said - you may want to network with other buyers and give them leads and they can do the same to you or you can have multiple exit strategies so most homes will fit one model or another.

    10Reply
  • Norm Chrostowski
    OP
    Real Estate Investor · Lakeview, NY · Member since 2009 · 309 posts · 49 votes
    17y

    What I find Scott is a lot of people trying to sell their junk..literally. OOT's try to get rid of the REALLY bad ones first. A home that will comp out at 40k that needs 25k in rehab is not going to get it done. By the time you purchase it, plus the assignment fee, it's not worth it.There's no room for anyone to make $$$. A lot of these are beyond repair, or priced way over what I would buy them for. If the houses were valued at 70-80k maybe, but not at 40-45k, not worth it IMO. This is what I've seeing so far. Some of these homes were FSBO"s that I took it upon myself to call and go see. One could turn into a pretty nice short sale.

    I haven't rejected 27 of them. Some I haven't made an offer yet. Still doing some due diligence. The ones I have, will be very good if accepted. And I shouldn't have a problem finding buyers for them. I'm not being to picky, just picky enough.

    I don't want to go to my buyers EVERYDAY and say..look at this, look at this, oh and try this. I feel it hurts my credibility. When I come to them with something, I want them to feel confident I've done my homework and it fits their investing criteria. I'm certainly NOT desperate, and don't want to come off that way. Again very tired, hope I'm not babbling.

    The scripts are just to get an idea and for reference. I don't have to read from one, I'm pretty personable.

    Thanks for the indepth reply.

    1Reply
  • Dory Peters
    Real Estate Investor · dc, Washington D.C. · Member since 2008 · 392 posts · 89 votes
    17y

    Actually, I make my offers site unseen. After my offer is accepted, then I'll arrange a visit for one of my team members or myself.

    Since I don't want to lose any cents, the numbers first must make sense.

    Otherwise, for me it's a waste of time to visit anything that I haven't already put under contract--at least in most cases.

    4Reply
  • Norm Chrostowski
    OP
    Real Estate Investor · Lakeview, NY · Member since 2009 · 309 posts · 49 votes
    17y

    So you have an idea of the value, and give them a price over the phone? Basically saying "this is what I'd have to pay based on values in the area.."

    Not that I want you to reveal any of your "secrets", but could you elaborate on a typical conversation/deal?

    Also after you put it under contract, and go pay your visit, what if the place is complete shambles, or there's more rehab than expected? I.E. foundation problems etc...

    0Reply
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    17y

    Scott's list is good, but I think you need to find out why they want to sell, too. That's the motivation factor. If they're not strongly motivated, they probably aren't a good candidate.

    I assume since you're doing mailers that you're targeting an area you know well. So, you should have a good idea, for example, that a 1000 sq.ft. 3/1 will rent for $900 and would sell in good condition for $110K. So, you know going in what its worth if its in great condition. Say $55K as a rental or $77K as a flip. Whatever works for your buyers. As they say "the roof needs work" or "the roof is only two years old", you can adjust your price accordingly. Take what they say at face value.

    If they seem to be motivated, then once you come up with a number, ask them what they want. Say you've come to $60K as the number. They say "$90K". You'd say, "You know, I just can't make any money at that price. I really need to be in the $60-75K range". If they say "no way", then the conversation is over, for now. Tell them to keep your name and number and call if circumstances change. If they say "maybe we could make that work" or some such, you arrange an appointment. They're thinking the high end of that range, you're thinking the low end, but that will all come out eventually. At least you have a number in their head, and they haven't said no.

    If the property doesn't match their description, adjust you price. Certain things, paint and floors especially, always have to be done, so just include that cost up front.

    10Reply
  • Norm Chrostowski
    OP
    Real Estate Investor · Lakeview, NY · Member since 2009 · 309 posts · 49 votes
    17y

    Thanks Jon. That's kinda what I've been looking for.

    Ive had many calls that the house was listed by a Realtor, and it hasn't sold or they're not happy with them. Would you pursue these?

    Also if you determine they're not motivated, is there a tactful way of saying "your not motivated, good bye"? Make sense?

    0Reply
  • Andy J.
    Wholesaler · Colorado Springs, CO · Member since 2009 · 286 posts · 255 votes
    17y

    Going through my list of questions, some will draw out motivation more than others if you listen well.

    What is your remaining mortgage balance? I've found that typically unmotivated people will ask you why you need this, the motivated ones would give you their account number for the asking.

    What is your mortgage payment? Same as above.

    Are the payments current on the house? Good sign here of motivation, although a lot of people never get motivated enough to do something about it

    Why are you looking to sell this house? I have found unmotivated folks to say: I'm looking to buy a new house in a different part of town, I just wanted to see what you would offer, I'm tired of this house, I've had the house listed for a couple weeks and no offers at asking price.

    What is your asking price? Having them tell you "what I owe" isn't always a good sign of motivation but is more so than not.

    What is the estimated value of the house? Ask this right after "what is your asking price?" and it will be a huge help in determining motivation. I think you'd be surprised at the amount of people who knowingly ask for more than its worth... BY THEIR OWN ADMISSION!!!!

    When do you want to move? The asap answers are usually good motivation. This summer, or when I get a good price, or whenever it sells typically aren't good answers for me.

    Is your house listed with a real estate agent? The yes or no usually doesn't help, but the explanation that comes along with the answer is good.

    If you were to list the house with an agent, what repairs do you think would be necessary to put the house in retail condition? and pair this with How much do you estimate those repairs would cost? Many people think that new carpet, paint, and updating bathrooms is only $2,000 for a 2,000 sq. ft. house. Take their estimates with a grain of salt, again, the explanation is more indicative than the number itself.

    Would you be willing to allow us to take over the payments on your house? This question is obviously eluding to a subject-to deal but will help determine motivation nonetheless. Not quite 100% but darn close of the motivated folks will say yes.

    When can we arrange a time for me to see the house in person? If you get a "my grandkids are in town for 2 more weeks, after that would be ok" it's not a good answer. The "I'll be home from work in 20 minutes" really could go either way on motivation.

    Hope this helps, good luck to you.

    16Reply
  • Andy J.
    Wholesaler · Colorado Springs, CO · Member since 2009 · 286 posts · 255 votes
    17y

    Norm,

    As far as letting them off easy if you're not interested in the house, here's what I suggest. Get to know a real estate agent in your farm area, every lead that you talk to or meet with and can't or won't make an offer, recommend them to your Realtor.

    I say something along the lines of "You know Mrs. Seller, based on the information you've given me, to be honest with you at this point I don't think I'm going to be your best option (or I'm not going to be able to make you a competitive offer) If you'd like I can refer you to my personal real estate agent, she's one of the best in this area and can probably get you a better price"

    I have gotten my agent at least 3 listings in the past 3 months and many more appointments. Needless to say you could always ask your agent for a referral fee if they get a listing. I don't ask for anything as mine is very helpful if I want a second opinion on comps, or want to look at REO's on my schedule, or want to submit 20 lowball offers, they can also be a good source of leads as well

    6Reply
  • Norm Chrostowski
    OP
    Real Estate Investor · Lakeview, NY · Member since 2009 · 309 posts · 49 votes
    17y

    GREAT advice Andy thank you. Especially about the Realtor thing. I've been having problems getting comps quickly...this might be the "one hand washes the other" kind of thing....HMMM?

    Be back later. Bank , mailers, and bandit signs work today ...I look forward to much more great advice when I get back....

    Again, thank you

    0Reply
  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    17y

    Norm - if your talking to someone who is working with a realtor and it hasn't sold or they dont' like them you need to find out why.

    Priced to high - they are wanting to much - the home needs a ton of work - they are not really interested in selling. Why don't they like the realtor?

    Why - Why - Why is important. Jon said to find out their motivation in moving - I agree 100% - I generally do not ask "what is your motivation" - that is why I put these three questions on my list above:

    - what is your situation
    - how did you get into it
    - what is the ideal outcome

    You could add in there "why are you moving/selling" -

    The concept of making offers before you see the home is fine - but in your case you would have made 30 offers on the phone and still would cancel 27 of them for some reason (I know you haven't rejected 27 yet your doing research but you get the point).

    At somepoint you need to get to the home and decide yes or no.

    Your original question was how can you save time by going out to 30 homes - by making offers on all 30 your not that time - your still going out to all 30 homes.

    I am not saying that is a bad strategy - I did that for a bit but it just wasn't the strategy for me.

    As for your numbers you gave that is why you need to ask questions - you need to ask about the condition of the home - the types of repairs and get specific because people will lie in generalities - "oh it needs some work but not a ton" - ask about everything - the windows / roof / kitchen / walls / floors ... just take a move in check list and go down it if you want.

    When I started to get very specific on the phone several things happened for me....

    1. People started to understand I was serious and not like the rest who would call.

    2. They started to trust me because of number 1 so they started to open up more.

    3. I didn't waste as much time seeing homes that didn't fit the bill - I got so detailed on the phone that I could start to make offers over the phone becasue I had a ton of info

    Yes you will get time wasters - that is part of it - part of this line of work.

    As for being tactful - that really depends on you - sounds like your looking for a script and believe me it will come of as a script - I am not joking when I say just be yourself. Say what comes in that moment. I have said to some that they are not motiviated enough and I can't help them - or told the wife the hubby doesn't want to sell and till your on the same page I can't help....and I have also said this home doesn't fit my model and left.....

    Just need to read the situation and say what you feel is appropriate at the moment as each moment is unique.

    The best way to learn what to say is go to all 30 homes and say something - really - that is the best way to learn how to talk to people - talk to them.

    4Reply
  • Norm Chrostowski
    OP
    Real Estate Investor · Lakeview, NY · Member since 2009 · 309 posts · 49 votes
    17y

    SWEEET! I got a vote (What the hell is that?).

    I've gone to 30 houses, and most of them are not what I'm looking for. I've been told "you'll look at 100 homes, make an offer on 10 and maybe buy one". I believe I read that right here on biggerpockets? Scott, you sound like looking at 30 homes is a lot, and I should have made offers on more of them, and/or bought something by now? I think I'm on-track. Am I wrong here?

    I have NO problem talking to people, I was just asking if there are question you can ask to "weed out" the un-motivated, and save time driving to EVERY SINGLE property.

    0Reply
  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    17y

    Hey Norm –

    What I think of your results really isn’t important – all I know is this…you first post said “I can't help wonder if alot of these are a waste of time to even go look at……. I just don't want to be driving all over the place to look at something that's probably not going to work out.â€

    Reading your post gave me the impression that you were not happy with your results and that you were seeking some qualifying questions others ask to help narrow down the homes they go look at and the sellers they have a second conversation with.

    If that isn’t what your seeking then forget everything I have said because that is where my comments are coming from as that is what I read into your original question.

    What I have listed out are a few of the many questions that I have personally used to qualify both the sellers and the home on many different levels before taking time to do more research.

    I know about the 100 home rule – and if that is your guidepost then you’re right on track and sine you haven’t yet dismissed the other 27 homes you may be ahead of that curve.

    “I have NO problem talking to people, I was just asking if there are question you can ask to "weed out" the un-motivated, and save time driving to EVERY SINGLE property.â€

    The answer is yes – see above – and as far as talking to people I was not implying that your not good talking to people but in two posts here you have said:

    "And if you don't like what your hearing, just politely tell them "your property doesn't fit our criteria...sorry". Or something along those lines."

    "is there a tactful way of saying "your not motivated, good bye"? Make sense? "

    So you have asked twice in this thread how to "talk" to people or what to say during certain situations or how best to phrase things.

    All I am suggesting is from my experience the best thing for you to do is to talk to people and you will find out what fits well for you.

    1Reply
  • Andy J.
    Wholesaler · Colorado Springs, CO · Member since 2009 · 286 posts · 255 votes
    17y

    The 100, 10 , 1 rule isn't hard and fast. Keep in mind that a lot of the deals are not going to come to fruition at your meetings. Don't be afraid to ask what you want for either, if it's not a good deal at their numbers, have them bring cash at closing to make it work. Clearly these aren't as frequent, but they do happen.

    Follow up with your leads after you meet with them, and do it often, at least 30% of my deals have come from people calling back weeks or months later saying they're ready now. Keep your name in front of them, mail them something every week or two (less frequent as time goes on) for a year, it will greatly increase your business.

    0Reply
  • Brian P.
    Wholesaler · Salt Lake City, UT · Member since 2009 · 1k+ posts · 401 votes
    17y

    Have to agree with Andy. Over the years I can't count the number of deals that I put together from my rejects.

    My father in law was a long time life insurance salesman and one day he opened up a desk drawer and it was filled with letter size paper with handwritten notes regarding suspects/prospects that he had run into, he would check with the top sheet when he had down time and if nothing new put it on the bottom of the pile with any new notes.

    His sales manager said to throw them out and forget them but his list of clients had a star next to some names and he told me they were former dead leads or referrals from former dead leads and I saw a lot of stars. So I followed suit for my real estate and the dead leads were not always so dead. I still keep that drawer working even today.

    I also put ideas for possible deals into that drawer and it gives me a chance to remember them and often put one together. Not high tech but very useful.

    1Reply
  • Silver A.
    Real Estate Investor · Select a State · Member since 2010 · 79 posts · 17 votes
    15y

    Hi all,

    this is very helpful topic, maybe you can help me with two specific sticking points when qualifying the seller over the phone? I searched, but didn't find the answers.

    1) I have placed an ad somewhere and now a prospect is calling. He sounds like a nice eldery man. He has a house which is empty and in need of some serious renovation. I'm asking him why is he interested in selling the house.
    He responds honestly, "I'm 75 years old and have (some chronical condition)." Or "I am sick and need to move in with my children" or "I am sick". And then there is the silence when I should say something...

    How should I respond to that? I am three times younger and looking to buy below market value. He is selling a place he has lived in for longer than I have been alive.
    I imagine building rapport somehow would be the way to go but how can I relate so that we would have more rapport, and where to go from there?

    2) Same situation as above. He is asking "how much am I offering?" I say that I need to see the place for myself at first before making an offer, as no house is the same.

    Then he hangs up.

    or: I am asking him myself, "have you thought of the price that you would be happy with, considering that there I am the buyer and can close in a week?"
    And he goes, "how much are you offering?"
    "(wide price range), but I would need to see the house first to make a precise offer".

    Then he hangs up. And the house will be on the market in a week, I never hear back. When I call them few weeks later they say my offer was WAY too low.

    I'll appreciate any ideas on how to deal with these situations.

    S.

    0Reply
  • Erin Gary
    Residential Real Estate Broker · Concord NC · Member since 2015 · 11 posts · 0 votes
    9y

    @Valerie Pedigo hello, I am wondering if you can email me those scripts as well...still kinda learning BP and don't know whether to post my email address in the thread or Direct message you??? Thank you for your help

    0Reply
  • Anthony Varela
    Portland, OR · Member since 2017 · 18 posts · 5 votes
    9y
    Originally posted by @Dory Peters:

    Actually, I make my offers site unseen. After my offer is accepted, then I'll arrange a visit for one of my team members or myself.

    Since I don't want to lose any cents, the numbers first must make sense.

    Otherwise, for me it's a waste of time to visit anything that I haven't already put under contract--at least in most cases.

    When making offers site unseen, assuming that is over the phone, are you simply saying, "I'll pay you $XXX,XXX" and are you stating that this offer is contingent upon X?   Does any of that need to be in writing?   

    Thanks

    0Reply
  • Cody Evans
    Wholesaler · Fairfield, CA · Member since 2017 · 472 posts · 145 votes
    8y

    Great thread.

    @Erin Gary

    @Valerie Pedigo

    Do you have those scripts?

    @Anthony Varela

    I would doubt the answer is in writing since that would involve an in person meeting to do the due diligence. I haven't done this before but my guess would be to probably start off by giving a number in my price range on the low end after asking them all the SPECIFIC questions on property conditions(floors,roof ,etc). After you hang up go check neighborhood comps to find an ARV and talk with a real estate agent to see what they figure the ARV is for the house. Compare/contrast your number to theirs while learning. Get a number in your head and check to make sure the numbers work. When you finally meet the seller check around the property and be upfront about what you found when you did your ARV calculations. I plan on wholesaling so I plan to buy the house at 65% ARV. If I see the price we agreed on is way unreasonable then look around the property and try to figure in repairs so you can figure that in and give them a more accurate price you can buy at.

    This is my rough idea as someone who has not done a deal yet so take it with a grain of salt. Please poke holes in my plan if you can. Get good at this so you don't have to revise every deal like "I know we agreed 85k but now I really need it for 75k" because that sounds sort of sketchy to me. BE ethical, the money is going to come so don't tarnish your reputation in the meantime.

    0Reply
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