Script of telephone negotiation with seller today (Advice wanted)

36 Replies

One of the many calls that I had today.  I am using Michael Quarles advice about getting the seller to give me their minimum.  I have had success and failure with this.  Here is the part of a phone call that I had today where I failed and, the point where I failed with this one is where I fail on the other ones and end up offering.

Me: Taking into consideration that I could basically close on the day of your choice how much would you accept as the minimum price for your building

Seller: Well listen I had it sold for 520000 last year so how much would that be minus the 4 percent commission...500000

Me: So the minimum price that you would be willing to take is 500000

Seller: There you go that is what it would be, if you are going to tell me that you will propose me something than it is up to me to accept it or refuse it.

Me: Well you just told me that your minimum is 500000 so it would be pointless for me to offer anything less than that because that is the minimum you would accept.

Seller:  Listen, you have not seen it yet, you don't know where it is.  If you are serious and the funds are there then make me an offer.

Me: How much is the mortgage on the property?

Seller: There is no mortgage it has been years since I had a mortgage.

Seller:  blahblahblahblah

Me: I am getting the impression you are more negotiable than 500000, how much are you willing to take as a minimum.

Seller:  lol listen William go see the building, if you are interested I think you know the address

Me: I have all of the information for your building but, before I take the time to make an appt to go see a property I have to know that the owner is within my range.

Seller: What is your range

Me: I have to know what your true minimum price is and then I can tell you if it is in my range.

Seller: Ah damn, what is my minimum...if I tell you my minimum is half a million you are going to say well I am not interested.

Me: That's right

Seller: What is your maximum?

Me: Well I mean (sigh) I have a maximum and I understand that you want to know it.

Seller: Tell me your maximum and I will tell you whether we can come to an agreement or not.

Me: (Giving up the battle) Alright well uh I will just pull up my calculations to give you a precise number

Seller: Sure

Me: Okay so my maximum will be below 400

Seller: Below what!

Me: Below 400

Seller: No forget about it I didn't say that I was willing to give it away.

Me: I understand

Seller: Listen this is not costing me anything and it brings me in 10000 clean each year.

Me: I understand, thanks for the call and give me a call if you are interested in selling fast with no hassle.  For the time being I have absolutely no interest in buying it for the price that you are asking.

Seller: No problem take care

Me: Byebye

My first thoughts on this interaction is that it was very weak on my part to give in and give him my maximum rather than he give me his minimum.

What does BP think about this?

Here is my honest to goodness thoughts....

I have worked in a call center for years and this sounds super familiar to me. You started to hit heads with the guy. 

While a lot of people like the so what's your minimum approach it rarely works. If I ask and they tell me great. 9/10 they want you to make an offer. I normally show comps, repair estimates, and what a typical investor would pay.

"I know you want X and your house is worth it! In perfect shape... If you take a look at my estimate the home really needs ______ to get it up to par with the competition. Knowing a traditional investor would offer you mere pennies on the dollar at 65% - repairs - fees that puts us at (really low).... Knowing good and well the situation with your home what do you think is fair? Normally they will then give me a number that I can get them to come down from there on. 

Just last week we talked a 190k property down from 130k to 100k with that approach.

Ryan Dossey, Real Estate Agent in IN (#RB15001099)
Originally posted by @Ryan Dossey :

Here is my honest to goodness thoughts....

I have worked in a call center for years and this sounds super familiar to me. You started to hit heads with the guy. 

While a lot of people like the so what's your minimum approach it rarely works. If I ask and they tell me great. 9/10 they want you to make an offer. I normally show comps, repair estimates, and what a typical investor would pay.

"I know you want X and your house is worth it! In perfect shape... If you take a look at my estimate the home really needs ______ to get it up to par with the competition. Knowing a traditional investor would offer you mere pennies on the dollar at 65% - repairs - fees that puts us at (really low).... Knowing good and well the situation with your home what do you think is fair? Normally they will then give me a number that I can get them to come down from there on. 

Just last week we talked a 190k property down from 130k to 100k with that approach.

 Thank you for the response Ryan D. Do you do that approach for every call that comes in?

@Ryan D.  Is your scenario a discussion with the seller in person after you've seen the house?

@William Johnson  My suggestion would be to tell the seller that, "unfortunately we're not able to go look at every property and without seeing the condition of the property, I'm unable to quote you an offer.  If you can provide me with what you consider a fair price, I can run some preliminary numbers and call you back in a few minutes to talk about taking a look at the inside."  You might also see if he is willing to seller finance it instead of an all cash price.

You really want to build value in your offer. You gave him a number (which I don't view as weak at all.) but you did not build value in why. You have to explain your reasoning. Why does it make sense for them to sell the property to you? Why is your offer completely legitimate. That's why I use a repair cost estimate. Your offer has to be presented in a logical format. You offered the seller 20% less than his asking but didn't tell him why. 

Ryan Dossey, Real Estate Agent in IN (#RB15001099)

@Wes Eaves  Thank you for that particular way for me to explain to them why I need their lowest price

@Ryan Dossey  What do you recommend to say when there is practically no repairs to be done that would justify the price difference?

@Ryan Dossey   do you have a voicemail or pick up live calls? If you have a voicemail what do you say on it? 

The above response is normally when I have seen a house/walked through it. However the process has worked in person, over the phone, and by email. Why are you offering him 100k less? Simply just what it makes sense for you to pay? What you can afford? 

I let all of my calls go to VM currently. I work an unrelated 9-5. 

I want my voice mail to sound like they called a friend. I don't use any Real Estate wording whatsoever. My marketing is set up to look like I have PERSONALLY selected THEIR home. "I'm really Sorry that I missed your call. If you could leave me a message I will call you back as soon as possible."

Ryan Dossey, Real Estate Agent in IN (#RB15001099)

OMG I would NEVER have that conversation with a seller over the phone.  I don't blame you because a smart person told you to do it that way, but what you fell into was the DEEP DARK HOLE of trying to negotiate price over the phone with someone with whom you have established ZERO rapport & you have not seen the property so you could be a mile off anyway.  What works for Michael Quarles may not work for mere mortals like you and me.

On the call, I just want to make sure they have (1) equity and (2) motivation and from there I set an appointment and go see the house before getting into the numbers.  But I'm also interested in helping them in ways other than a simple cash purchase if the cash does not meet their needs (e.g., lease option, list with my agent partner, joint venture, etc.) so I see every caller as potential $$ via several different exit strategies and would personally never handle them as was described in your post.

@William Johnson 

Sorry man looks like I missed your question. If there is no work to be done (which I have never seen) you would just have to let them know that your offer is not contingent upon inspections or anything. You will pay what you offer with no hoops for them to jump through. You make your offer and tell them that is the price that works for you and move on. You don't want to get emotionally invested in one particular property.

Ryan Dossey, Real Estate Agent in IN (#RB15001099)
Originally posted by @Ryan D.:

The above response is normally when I have seen a house/walked through it. However the process has worked in person, over the phone, and by email. Why are you offering him 100k less? Simply just what it makes sense for you to pay? What you can afford? 

It is based on the 70% formula. My price that I would have offered him concretely would be 335,000. (ARV 500 x .7 minus 10k reno (Back fire escape staircase) and 5k wholesaling fee.

Originally posted by @Dev Horn :

OMG I would NEVER have that conversation with a seller over the phone.  I don't blame you because a smart person told you to do it that way, but what you fell into was the DEEP DARK HOLE of trying to negotiate price over the phone with someone with whom you have established ZERO rapport & you have not seen the property so you could be a mile off anyway.  What works for Michael Quarles may not work for mere mortals like you and me.

On the call, I just want to make sure they have (1) equity and (2) motivation and from there I set an appointment and go see the house before getting into the numbers.  But I'm also interested in helping them in ways other than a simple cash purchase if the cash does not meet their needs (e.g., lease option, list with my agent partner, joint venture, etc.) so I see every caller as potential $$ via several different exit strategies and would personally never handle them as was described in your post.

 Thank you for the advice!  Would you mind elaborating a little bit about what you would have done differently using my example?

I am learning from your post @William Johnson ! Thank you. 

Here is another forum post I found from last year that you may find helpful. Good advice. 

Micheal Quarles approach!

I am getting a lot of ideas from this thread and from others.  One thing I am really working at doing is cutting down my time per call.  I don't want to be on the phone too long and not too short of a time either.  I do want to create rapport however, what is going to give me more value (and I would really love your opinions on this) talking to two sellers per hour and having great rapport with them or talking to six sellers per hour and having low to mediocre rapport.  Mainly I want to give myself the best chance possible of getting their real bottom line price while being able to blow through as many sellers as possible in search of the gold rush!

@Dev Horn  I have been thinking about what you said about only using their motivation and whether they have equity in the house as your criteria to going to visit...if I would have been using this strategy from the beginning of my marketing campaign in October I would have visited at least 20 houses by now.  These were people who oftentimes had no or small mortgages and were very motivated...to get top value for their homes.  Are you saying that there is a very good chance that I have missed out on making a crapload of money?

@Caressa T.  Thank you for the reference to the discussion!

@Ryan Dossey  Man now I don't know which way to go because I am starting to see how split pro investors are even amongst themselves about making an offer versus making them make the offer. 

@Dev Horn  

 you hit the nail on the head unless these folks that are doing this type of buying IE direct mail or whatever have so many leads that they could not possibly get to them all. Then they are truly wasting their time money and effort.. This is a BELLY TO BELLY business your job should be when you get someone to finally respond to you, is to simply set and appointment to meet them... You should never talk about numbers on the phone... Other than hey is it free and clear or what do you owe on it.. If they say 300k and its a 150 property well then you know you have a short sale to work on..

Weak sales people get blown away everyday on the phone.. Once you meet with them then the real salesmen ship and talent comes to play..

Qualify lightly on the phone.. present in person close in person.. that's how its been done for hundreds of years.

I suggest to everyone who wants to be a wholesaler to watch the 2 movies.. Tin men and Glengarry Glen ross there you will see pro's in action.. and how it was in the day.. Its how I was raised I was raised with a father that sold land.. and got his 3 leads a week... If you were caught trying to close on the phone your butt was fired. 

So try it some time  establish a reporte' with the client in person.. you may never know they could take a shine to you and sell you the property cheaper than they intended.

@William Johnson 

  to answer your question you posed to Dev Horn... YES YES YES... you fubared yourself.

it takes a lot of porch time.. people blow you off on the phone in person they are different and so are you... unless you are so swamped you can't take the time because your closing way to many deals over the phones and making hundreds of thousands of loonies then you don't need to see them in person. but if that's not the case get in front of them.. who do you think is going to get the deal you in front of them or the next person who calls and trys to talk them into selling over the phone.

Originally posted by @Jay Hinrichs :

@William Johnson 

  to answer your question you posed to Dev Horn... YES YES YES... you fubared yourself.

it takes a lot of porch time.. people blow you off on the phone in person they are different and so are you... unless you are so swamped you can't take the time because your closing way to many deals over the phones and making hundreds of thousands of loonies then you don't need to see them in person. but if that's not the case get in front of them.. who do you think is going to get the deal you in front of them or the next person who calls and trys to talk them into selling over the phone.

 Wow! This totally throws what I have traditionally been taught on its head.  To summarize you recommend to just confirm equity and motivation and not do any qualification about what they would take over the phone. Just make an appointment and get in front of them.  Also I've added two new movies added to my list.  Thank you 

It is true for 99% of sales people but there was a lady RE agent that worked expireds and broke all the rules. On the phone she sounded like an angel and was very convincing. In real life she was a bull dog and looked like one too. She would get appointments and once inside she didn't leave until it was listed. She had already done most of the negotiating on the phone and just went to get them signed up.

@William Johnson 

  I have been in sales all my life... and again unless you have so many leads that you can't possibly get to them all and you need to do this over the phone then by all means.

But if your like many who only get a few leads a week or so.. then for sure in person is the way to go.. remember people hang up on the phone .. it impersonal  when you are in front of them you control the encounter  in the day and that day was literally 30 years ago I was white hot at sales.. when other guys would take 5 hours to tour and close I could do it in 2 max.  I would sell 6  parcels in a day when others would be lucky to do one. But I was taught by some of the best.. and that is what is sorly missing in this whole BP thing is sales skills everyone talks about other things but no sales skill how do you close the deal. that's what its all about.. I flat guarantee you a guy like Aaron Mazillo just did not luck into being a rock star wholesaler I bet he is great in person..

But anyway I could go on and on .. watch those movies .. and if you need to really learn how to sell go work at a car dealer they will teach you sales skills.

A great sales men will make far more money in the tyupe of RE your trying to do than some guy who is book smart but is a zero in personality.

@Jeff S.  

  I came to Oregon I 92 and got in the timber business.. NOw you talk about an unmotivated seller.. that's the Oregon landowner who has been there 50 to 100 years has a million dollar worth of standing timber is living in some 1200 foot piece of crap home out in the woods.. but would not know what to do with the million bucks.. those were tough folks to close.. I learned early on to let my partner do that.. He was a master but he NEVER did anything over the phone we had appointment setters  ( telemarketers) he wanted to show up with his smoked salmon Fresh salmon ( in season) Elk Jerky all these treats.. and then just sit there and talk for hours.. But the folks love him.. and he landed the deals I ran the back office and the RE development side of our business. I was good at sales but not like him.  LOL...

Certainly not one size fits all in sales @Jay Hinrichs  .There were 2 sisters that were number 1 and number 2 in the large agency I worked as a youngen. They were sweet grandmotherly types with nice southern drawls. The number one salesperson Ruth was hard sell and never left without the order while the 2nd would tell the buyers to go home and think about it. The buyers would go home and be back in a couple hours begging her to write them up. All the agents were amazed. She sold her own listings and sold themfull price.

@Jeff S.  

  one had the real time close the other the take away close.

My style. was this.

I would say this verbatim.

" I am not a used car sales men I am not going to hound you;.. But I know you would not have come in and spent all this time If you weren't serious... only rude people do that and I know your not rude.. I have some things I have to do in my office ( I was showing land so my office was to walk to another part of the property and check on lot line or some BS. When I come back I would just like a simple yes or no.. And NO is OK  and the whole time I have been telling them no is OK .. However if its yes then I expect to do business today. So you folks talk about it then let me know yes or no>"  that was my close and it was darn effective.

The other reason the phone close does not work is you have only 1 leg of a two legged deal you need the wife and or hubby you want them both together if not your going to waste  a bunch of time when the wife tells the hubby HELL no we aint doing that.

If we see something that meets your needs @Jay Hinrichs  are you ready to write a check today?

@Jay Hinrichs   

@Dev Horn  

@Jeff S.  

@Ryan Dossey  

I am getting 10 to 15 leads coming in each week from my advertising and I am contacting 15 to 25 FSBO / MLS per week. I work an un-related job at 32 hours per week and I have 4 children (Just to put my real time constraints in context). I would estimate that about 5 to 10 of those leads have enough equity and motivation to make it interesting for me. The main challenge to overcome right now is that I only have enough time to visit and perform the related due diligence surrounding these visits on a maximum of 3 of those properties.

How would choose 3 out of the 10 properties that you would visit on in my position (equity and motivation being equal for all 10 sellers)?

If @William Johnson pretty hard to pinpoint what exactly to look for out the 5 you say are potentially good. Guess you need to tighten your criteria so you have less possibilities. In my experience sometime first impressions can be way off so you just keep learning. Think it is one of those experience kind of things.

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