If you have been wholesaling real estate for a good length of time, you will run into sellers who will occasionally accept a lower offer to get a deal done. Mind-boggling, right?
After speaking with a few sellers who did not close deals with me, I would follow up with them just to take note on their transaction to better evaluate my process and to cultivate my skills. In doing so, I noticed that money some of the time is not the determining factor. Of course, as wholesalers, we understand that money is not always the motivating factor or they would sell their property traditionally. However, there are other laws at work that can sway a seller’s decision.
In speaking with a few of these sellers, they pointed out 5 things in our general conversation that swayed their decision to accept a lower offer than mine.
Here are 5 factors that made me miss out on deals, and I would like to share them with you so you can avoid these mistakes.
5 Common Reasons Wholesalers Don’t Get the Deal
1. Perceived Bad Motives
One of the sellers felt that my motives were wrong; I asked that she please elaborate because this is normally not how I come across, and I would hate to give off that impression. She stated that during negotiations, I was not patient enough with her, and I was more focused on getting her under contract.
After the discussion, I totally remembered the day, and it was a rough one, and I may have projected the wrong attitude, which gave her a negative perception of my intentions. I was in a rush because I double booked appointments, and at the time, I did not focus on the customer at hand. This was a wonderful lesson learned: Give every seller your undivided attention, especially during negotiations.
2. A Lack of Exit Strategies
Maximizing every opportunity means you have to have numerous strategies; there cannot be a one size fits all approach when working with sellers. At the time wholesaling was my one trick pony, so every seller needed to fit within the golden rule of 70% ARV. Well, not everyone is that motivated to lose 30% marketshare, no matter the situation they may face.
I now have multiple strategies that I use to get a deal done. In the beginning it was difficult to transition, but in order for me to become more of a player, I needed to have more than one iron in the fire. I lost deals because other wholesalers were able to market deals that were thinner because they had buy and hold investors on the buyer’s list and not just flippers, or they were able to do creative financing, or they just listed the property traditionally. I am continually working to expand my product offerings to aide my sellers.
3. Bad Timing
There’s not too much to say about this, other than “right time, right place” will usually get you the deal. I used to beat myself up about this, but I understand now that no one will be able to capture every deal. However, continuous marketing will keep you in the mind’s eye of the seller who is on the fence. Be prompt in returning phone calls and keep the marketing machine going.
4. Ineffective Communication
This also ties in with #3. You may miss a deal due to timing, but please never miss a deal due to ineffective communication. One of the sellers stated that I spoke in real estate jargon, and it was hard for her to follow me in our discussion. Shame on me, right?
Please learn that you need to communicate on the lever the receiver is on. Tone, pace, and voice projection are important; however, you still want to guide the seller along the conversation without losing them.
5. A Failure to Follow Up
Everyone know that you must follow up with sellers continuously, unless they hang up on you, the property is sold (closed escrow) or they state they are not interested and please do not contact them again. If their response is neither of these mentioned above, guess what? You need to call them.
One of my biggest mistakes was missing out on a deal because the property was listed at the time (pre-license) and under contract. You will still need to follow up on these deals. In the example of mine, the property fell out of escrow and another investor was continuously watching the property to see if it would close — and that is exactly what happened. There was no closing, and he/she got the wholesale deal. Be willing to accept “NO” until you receive “YES.”
I hope these 5 factors help you when talking and meeting sellers along your path to becoming a real estate wholesaling machine. If you have any horror stories on missed opportunities you don’t mind sharing, we would leave to hear from you.
Investors: What has kept you from landing deals?
Be sure to let me know with a comment!