I have read some of the phone script forums, but I still have some questions. I'm getting ready to start making phone calls, and getting out meeting potential sellers, so I want to make sure I do these things correctly. I know there is no certain way to do it, and that I should just get out and start doing it, but I do focus a lot on preparation.
I know some of the questions to ask the seller, but I don't know the order in which to ask them.
Am I supposed to run my comps on the address first, so I have an idea of what the ARV should be, before I talk to the seller on the phone?
Then, on the initial phone call, I verify and/or ask about the property specifics, including the property description, seller's motivation to sell, and the financials of what the seller wants, what the seller thinks it's worth, etc...
At this point, what numbers am I running in my head to see if this seller could be a potential deal?
Should I know whether this is a good seller to make an appointment with, based on the ARV, and what he wants for the property?
Do I figure in the mortgage payments at this time (if the seller even gives them to me)?
What if the seller won't give me the mortgage info?
What about asking for the equity info at this stage, or can this be done after a physical meeting with the seller?
What determines then, if I should setup an appointment to go see the property (what calculations make sense)?
Then, am I supposed to setup the appointment to go see the property, so I can include my potential repairs in the final number calculation (MAO?), and start building rapport with my potential seller?
I have all this information in my head and on my notes, but I'm having a hard time organizing what needs to be done at what stage of the meeting(s).
The past few months I've been receiving seller phone calls as well and I create a mock script that I repeat to myself every day, while in my office or driving to make it flow naturally. Definitely don't read from your script, repeat it every morning and eventually it will just sound like a normal conversation.
You can't possibly know which seller is going to call you from which list unless you have different phone numbers attached to each motivated seller list (which some people do, I don't)
Consider your criteria, you should have a general knowledge of around what the ARV is for your ideal property, my criteria is 3-4 bedroom with 1 1/2 to 3 bath under 2,000 sqft, 20 years or older. Unless you are just targeting a huge swath of area? For me I am sticking with 5 local zip codes, all suburban to make it easier on me.
I don't ask property specifics, you can look that up on tax records and it can be waste of time, here is how my script looks:
1. (seller) Hi this is _____ I received your letter
Hi, Yes, I'm Ken, I'm a local investor that lives... Thank you for calling me. Do you have couple minutes to talk?
2. (seller) Yes.. how did you get my information/ name
I walk local neighborhoods and your house was in an area I'd like to invest so I looked up the county records and your name came up.
Do you have a house you're wanting to sell? YES
Is the house currently listed with a real estate agent? NO
3. (seller) Yes, I'm thinking of selling this one property.
Do you mind if I ask WHY you are selling?
(seller) It takes too much time to care for the property... etc
Ok, I see well I'm here to help you and just have a few more questions:
--Are you the owner of the house, could you confirm your first and last name?
--Is this the best number to reach you? Is this your cell phone?
--What's the address of the house you are interested in selling?
--What's the timeframe you'd like to sell your home?
--Is the house occupied? Do you mind if I speak with the tenants?
--Do you have a mortgage, second mortgage? Do you mind if I ask how much you owe?
--Are you current or behind?
** I may not get to all of these or some of them the seller will have already told me out of order, remember to listen more than you speak, they'll give you a lot of information.
** Now here is the important part, talking price:
I always buy As-Is so you won't need to do any repairs. Can you tell me about the condition of the property? Roof, flooring, paint, etc.
(seller) It definitely needs a new roof, and some of the windows are leaking
That's fine, we can take care of it. For the house in its current condition, how much would you be willing to sell for?
(seller) IF PRICE IS HIGH
How did you come up with that price?
(seller) well the house up the street sold for that much, I figured mine only needs a roof and windows so $10,000 less should work right?
"I see"... be quiet for 10 seconds and see if they negotiate down with themselves.
If nothing... "Homes that are fully renovated will sell for around the price your asking, Your best bet would be to list it with an agent and see what you're home is worth, would you like an agent recommendation?"
** Don't be the bad guy and insult them when they're asking a price that you know just won't work. My sweet spot is from $80-$130k depending on which neighborhood, if they ask for much more than that I don't ever give them a price that I would pay. Ask them to do their homework and get back to you. Countering with an investor offer will only hurt your rapport.
(seller) IF PRICE is FAIR
Ok, that's in a price range that I could work with. How about I come by tomorrow, does 2pm or 4pm work?
Thank you! I'm going to sit down and do some research and I'll see you tomorrow. I'll give you a call an hour beforehand.
This isn't a script I came up with, courtesy of @Michael quarles and @j scott It was a combination of listening to their podcasts or reading their books.
I know time is precious and you don't want to waste it, but when starting out, try to get appointments, it will only help you get more tuned into this experience. Obviously if they're asking $300,000 and that is $200,000 over what you can offer then that's a waste of time. But if it's within 10-20k maybe give it a shot. And remember practice practice practice, don't read off a script.
Thank you for your reply Ken.
So, if they have a mortgage (loan) on the property, I'll also have to figure that in with my offer, while on the phone?
In other words, how am i negotiating a price on the phone south seller, when i don't know all the information, such as the repairs, or othet loans or even liens on the property?
I can't negotiate a price on the phone till i get that information, and calculate it out.... right?
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing