Struggling with sellers that are not highly motivated

Struggling with sellers that are not highly motivated

Investor · Los Angeles , CA · Member since 2014 · 132 posts · 25 votes

My direct marketing has primarily attracted sellers with "mild" interest in selling or sellers curious about what I would pay for their property. The intention here is not to create a discussion about the quality of the lists and the type of copy, I realize both these require further optimization to generate motivated leads. Regardless, anyone that sends direct mail must encounter these curious callers that would like an offer on their property. They appear to have no "problem that needs fixing" and are in not in a situation that requires a fast sale. They do not want to meet in person or let me see the property. Nevertheless, they still picked up the phone and called me (they usually mention how they get loads of mail from people like me).

I am curious how other BP members handle these situations? I typically let them know that I will do some research and call them back with a number. When I call them back they generally thank me for the offer and inform me that when/if they are ready to sell they will call me back.

Should I follow up by sending an offer in the mail or a letter in the mail describing the offer?

Should I not give them a price over the phone and mail them an offer instead?

Should I provide an explanation of how I arrived at the offer # like an itemized breakdown of my costs?

or are these people just a complete waste of time?

hopefully some of the BP heavyweights that do a lot of deals directly with sellers will chime in on this one

@Aaron Mazzrillo

@Tim G.

@Jerry Puckett

@K. Marie Poe

@Dev Horn

@Brian Daly

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Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
12y

I don't waste time with unmotivated sellers. I have seen newby investors go from REIA to REIA dragging the same non-deal around trying to squeeze water from a rock. They ask everyone how to structure a deal out of this dead lead. I like to refer to it as 'strangling the lead.'

The problem here is not the unmotivated seller, it is your volume of deal flow. If you have 5+ calls a day coming in, do you really want to or have time to spend on the unmotivated ones? No. So, you need to put these non-sellers on a follow up, or just leave them on your list and keep mailing them. Time and circumstances changes all seller's minds. When the phone stops ringing with motivated sellers, send more mail!

I think Ron LeGrand was the one who said it, and if so, it is the best saying related to this situation, "Some will, some won't, so what! Whose next?"

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  • Agent/Investor · Murphy, TX · Member since 2013 · 542 posts · 304 votes
    12y

    Get their email address so you can email them an offer and then put them in a drip marketing campaign once a month for another 9 months or a year. Keeps you in touch and saves you the expense of mailing them.

  • Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
    12y

    I don't waste time with unmotivated sellers. I have seen newby investors go from REIA to REIA dragging the same non-deal around trying to squeeze water from a rock. They ask everyone how to structure a deal out of this dead lead. I like to refer to it as 'strangling the lead.'

    The problem here is not the unmotivated seller, it is your volume of deal flow. If you have 5+ calls a day coming in, do you really want to or have time to spend on the unmotivated ones? No. So, you need to put these non-sellers on a follow up, or just leave them on your list and keep mailing them. Time and circumstances changes all seller's minds. When the phone stops ringing with motivated sellers, send more mail!

    I think Ron LeGrand was the one who said it, and if so, it is the best saying related to this situation, "Some will, some won't, so what! Whose next?"

  • Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
    12y

    Oh wait, you're in Los Angeles? Disregard what I said above. That is for people investing in Detroit. Uh, yeah, just keep on those unmotivated sellers. You should go to all the REIAs and ask everyone you know how to make a deal. I'm sure there's an answer hiding out there somewhere. I've found they typically call when I got to about the 90th follow up call. That's what you got to do. Call them like crazy all day long. LOL

  • Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
    12y

    I am also a Realtor (secondary to being an investor), so I will sometimes try to get them to list their home with me. Or, I may ask them if it's OK if another Realtor friend of mine calls them, and then I can earn a referral commission if they do list with another Realtor. And sometimes I just ask them over the phone for the address of the property and how much they are asking for it. I then tell them that I will do some research over the internet and will call them back if I am interested. By the way, I have gotten some good listings over the years when I have the time available to try to get the listing myself. Usually when I refer the lead to another Realtor, it rarely turns into anything.

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y
    Originally posted by @Bryan L.:
    I am also a Realtor (secondary to being an investor), so I will sometimes try to get them to list their home with me. Or, I may ask them if it's OK if another Realtor friend of mine calls them, and then I can earn a referral commission if they do list with another Realtor. And sometimes I just ask them over the phone for the address of the property and how much they are asking for it. I then tell them that I will do some research over the internet and will call them back if I am interested. By the way, I have gotten some good listings over the years when I have the time available to try to get the listing myself. Usually when I refer the lead to another Realtor, it rarely turns into anything.

    I was wondering about this, as I'm considering getting my license. After my initial conversations with sellers I know there are someI could convert to listings. But I'm doubtful about referrals as it adds another party to the mix. They called my number, got my letter, or went to my website or saw my ad. I don't think they are likely to work with someone else, no matter how nice I make the other agent sound.

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y

    Tell them that offers take time and resources and that you only make offers to sellers that are ready to sell. Tell them that if their property is in great condition, needing no repairs or updating, that they are better served by a real estate agent. Because they are! I promote listing the property to all my sellers and I'm not an agent. The motivated sellers make it clear they don't think that will work and will tell you why. The unmotivated ones were just hoping for a free home valuation, or were planning to list and wanted to save 6%.

    Let them know to keep you in mind for the future or if they don't get the offers they are looking for and that you would be happy to hear from them anytime.

  • Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
    12y

    @Account Closed I think I could convert more of these leads to listings if I had the time (and desire) to really work them. But for whatever reason, whenever I refer them to another Realtor, it seems that the conversion ratio is very low. Actually, I would much rather do the referral if the conversion ratio were better, because a successful referral is real easy money.

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    12y

    The conversion ratio Is low because while an agent will take the referral they will also be working the other leads they have.

    If they are not a broker they are automatically taking a broker split and then on top of that a 15 to 25% referral fee they are lucky to get 50% for their time.

    If this is a short sale for 100k and they get 3k total after referral fees it's 1,500 before expenses.

    If the buyer or seller lead becomes a real pain the agent just says it is not worth it and gives up. If you referred them then guess what they are now hounding you the broker that referred saying how bad this agent is you referred off to.

    I do not take referral fees and haven't for years. I just tell people about someone else I think might work for them that I do not focus on that niche. The person I hope in kind refers me with no fee expected. It's vary rare to find an agent you refer to that actually follows through because usually those types are busy transacting their own stuff directly for more money. Now some broker/agents live off of referral fees alone and swear by them but I have just never seen them to be that great in my business.

  • Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
    12y

    @Joel Owens - But, on the other hand there are so many agents who struggle to make a living. And many of these struggle because they can't generate leads. And I have leads on a regular basis that I can refer out to someone. I just wish that I could find the right person to refer them out to. Needs to be someone who is good, but not too busy. Haven't found the right person yet.

    Actually, I never really tracked the source of my leads very closely, but I think I had the best success at switching "un-motivated sellers" to listings when I used to advertise in the Homes and Land Magazine. I would advertise all of my listings, and then I would have a section beneath the listings that said "I Also Buy Houses". I got several good listings that I think originated from that ad. But alas, the cost of that ad is higher for me now so I don't run it anymore. But I still get leads from other ads.

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    12y

    "I just wish that I could find the right person to refer them out to. Needs to be someone who is good, but not too busy. Haven't found the right person yet."

    That is the million dollar question........... : )

    It's the same for all others who want to refer but not have to do constant follow up and almost do the deal themselves to make it go through. That would be like me having agents again at my brokerage that I got rid of years ago.

    I just do not want all that drama in my life. It's not worth it to me to endure that for a referral fee.

  • Investor · Los Angeles , CA · Member since 2014 · 132 posts · 25 votes
    12y

    Probably about half the calls I get are from people that think I am an agent looking for a listing even though my marketing clearly says otherwise. Once I explain I am not an agent I find that people generally warm up a little bit. I could get a license and try and monetize some leads that way. Probably about 10% of the calls could turn into listings within a few months. The thing is I actually think it adds credibility not being an agent as well as the fact that my marketing would be more limited as an agent.

    @Account Closed how are you generally presenting your offers? are you mailing them or calling them back with a verbal offer?

  • Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
    12y

    @Mike S. How is your marketing more limited as an agent? In my "I Buy Houses" type of marketing, I just include the words "buyer/agent" somewhere in there.

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y
    Originally posted by @Mike S.:
    Probably about half the calls I get are from people that think I am an agent looking for a listing even though my marketing clearly says otherwise. Once I explain I am not an agent I find that people generally warm up a little bit. I could get a license and try and monetize some leads that way. Probably about 10% of the calls could turn into listings within a few months. The thing is I actually think it adds credibility not being an agent as well as the fact that my marketing would be more limited as an agent.

    @Account Closed how are you generally presenting your offers? are you mailing them or calling them back with a verbal offer?

    For the unmotivated sellers, I mail them or email them. For the motivated sellers, I do whatever makes them happy!

  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y
    Originally posted by @Bryan L.:
    I just wish that I could find the right person to refer them out to. Needs to be someone who is good, but not too busy. Haven't found the right person yet.

    If someone is good that is WHY they are so busy.

  • Investor · Los Angeles , CA · Member since 2014 · 132 posts · 25 votes
    12y

    @Bryan L. I was told that (at least in CA) all marketing must include your license number. All marketing would also have to be cleared by the broker where my license would be held. Online marketing would also require disclosures, it just seemed simpler not to get it.

    However, I am still considering it, an argument can certainly be made either way.

  • Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
    12y

    @Mike S. I don't know CA law and I'm no attorney, but it seems to me that your "I Buy Houses" kind of advertising is not advertising brokerage services, so it may not have to be subject to all of the rules. You will probably still have to disclose that you are an agent, and that part is easy.

    I want to buy your house, any condition. I buy houses as-is and I can make an offer to you on the spot. Call me today.

    All-Star Investments

    Mike S. President

    (buyer/agent, license number BR549)

  • Investor · Los Angeles , CA · Member since 2014 · 132 posts · 25 votes
    12y

    @Bryan L.

    @Account Closed

    A lot of the conversations I have go something like this...the seller is typically guarded and does not want to disclose much. They may be motivated but after all I am a complete stranger and if they are motivated they may not be willing to open up immediately about personal/private issues.

    Seller: Hi you sent me a letter saying you want to buy my house on 123 Maple

    Me: Thanks for calling can you tell me a little about the property the condition etc?

    Seller: Your letter says you buy "as is"

    Me: Yes I do but to give you an accurate offer its best that we meet and I take and I take a look at the property

    Seller: Well your letter says you are ready to make an offer as is what is the offer?

    Me: I would be happy to call you back in couple of hours when I am back at my office with an offer.

    Seller: OK call me back

    I call back make an offer over the phone the seller says that sounds fair let me think about it and I will hold onto your letter if I decide to sell.

    Any suggestions on how to better handle a situation like this?

    Also should I be giving the seller an itemized breakdown of how I came up with my offer?

    Thanks!

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y

    I say "tell me what's going on" with the property. If they say nothing, I ask why they are selling. That's when I find out they just what to see what I'll pay (but won't be selling in this lifetime). Or I find out why they are "thinking" of selling but probably not any time soon. Or they tell me what's going on. Condition is the last thing on my mind.

    There's no need to talk about the condition if there is no motivation.

  • Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
    12y

    @Mike S. - I usually start out with them on the phone something like this, especially if I don't have much time to waste.

    Them: I seen your ad on ........(I won't even comment on the grammar).

    Me: Yes, I buy houses. And I have to ask you first if you have it listed with a Realtor already, because I am also a Realtor (that gets the disclosure out of the way).

    Them: No, we don't have it with a Realtor yet, we just want to sell it.

    Me: OK, can you give me the address, because I can find out a lot of information about it over the internet.

    Them: 123 Intheboondocks Road, BF Egypt, TN.

    Me: OK, thanks. I will do some research and I'll call you back if I'm interested.

    And here's where it really helps that I am a Realtor. I will check my MLS to see if there's any history on the property there, and I will also check CRS (which is included in my MLS) to see how much they owe on it. Ninety-nine percent of the time they will either owe more than it's worth, or it will be on the other side of BF Egypt, and the research stops right there. Now, if there's a small amount of equity and I might want to get it as a listing, I may call them back and set up an appointment. If there's a good bit of equity and it looks like I might be able to buy it, then I'm on the road to see it as fast as I can.

  • Rehabber / Flipper · Simi Valley, CA · Member since 2010 · 597 posts · 259 votes
    12y
    Originally posted by @Mike S.:
    @Bryan L. I was told that (at least in CA) all marketing must include your license number. All marketing would also have to be cleared by the broker where my license would be held. Online marketing would also require disclosures.

    Are you sure about this? According the "Regulations of the Real Estate Commissioner", item number 2773 states "A real estate broker or salesperson, when engaging in acts for which a license is required, shall disclose its, his or her eight (8) digit real estate license identification number on all solicitation materials intended to be the first point of contact with consumers."

    I'm not a real estate attorney, but it would seem to me that buying a house is not an act for which a license is required, and therefore the advertising to buy a house is not required to have the agent disclosure. But I'm sure if you asked most brokers, they would tell you to do it anyway. Or, I could be wrong about the disclosure in the first place. :)

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y

    I don't think you are wrong. This discussion has come up several times, here on BP and elsewhere. A supervising broker might require it of their agents, but that's not the law. I think most agents believe that they are required to disclose that they are an agent but would hard pressed to find the actual law.

    Anyone in CA know of a law that requires such a disclosure? Is it a CAR requirement or an actual law?

  • CA · Member since 2011 · 762 posts · 182 votes
    12y

    There is no legal requirement that I know of. If a broker chooses to join the association of realtors or mls there may be some rules to follow, but these are private organizations, they don't make law.

  • Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    12y

    Agreed, here anyway it's a NAR requirement, but not state law. However, if you ever end up in a dispute headed for a judge, or admin hearing, the fact that you didn't disclose, which Should indicate a superior knowledge on your part, certainly won't help your fate in the eyes of whoever is deciding it. As for advertising, if I'm advertising as an investor, and not offering RE brokerage services, it wouldn't apply to the advertising itself.

  • CA · Member since 2011 · 762 posts · 182 votes
    12y

    You are probably right Wayne, but the notion that somebody that is 18 yrs old that never graduated high school with a newly minted re license has "superior knowledge" in the eyes of the law over a non-licensee like J Scott or K. Marie I find quite amusing.

  • Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    12y

    Yep, that's why I capitalized Should. It's amazing some of the ignorance I run across with some agents, Especially what a purchase contract means, and doesn't mean, how to look for mortgages, liens, taxes, etc.

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