Don't Blow Your Big HOLLYWOOD Moment with a Real Live Seller!
Back in 1999, when I started out as a real estate investor, I was both terrified and intimidated by the thought of speaking with sellers.
I am, by nature, an introvert, so chatting up complete strangers doesn't come naturally to me. I apparently never mastered the finer points of conversational technique, like how to make a smooth transition from small-talk to asking intimate and personal questions.
Plus, the few sellers I did eventually reach always seemed to be in a bad mood and never really wanted to spend much time talking to me.
(In contrast, I never felt anxious talking to prospective tenants. With them, the dynamics seemed more in my favor: I had a house that they wanted to live in, so it always felt like I had the upper hand.)
Fast forward a couple of decades and I now freely admit that talking (and listening) to sellers-in-need is one of my all-time favorite things about this business! It's also the highest-value activity that any investor can perform, yet so many of us work really hard to avoid it!
That's tragic, because I believe all the best opportunities start with a great seller conversation. Here, then, are Three Simple Steps I use to fully optimize my time in front of a seller.
1 - Identify a Legitimate Seller Need
My anxiety about talking to sellers stemmed from not knowing how to get sellers fully engaged and hanging on my every word. I didn't understand a basic truth: Everyone, introvert or extrovert, man or woman, Southerner or Yankee, will gladly chew your ear off all day discussing their particular problems and challenges, especially if they believe you can help them!
So, nowadays, I only want to talk to sellers with serious problems and challenges!
As an investor, I understand that we have a very specific role in the real estate ecosystem. We exist solely to purchase properties regular buyers won't, or to buy them faster than regular buyers can, or to do other things in ways regular buyers can't.
If a seller is prepared to put their property in top condition, spend several weeks showing the property to prospective buyers, and close in a month or so (pending financing), then they honestly don't need to talk to me (or any investor, for that matter). They should just list their home with an agent, and I'm happy to refer them to one of the several great ones I know.
The beauty of this realization is that now, going into a seller conversation, I'm fine whether they need my help or not: My job is to simply determine which situation they're in, and to do so as quickly as possible.
I do this by asking a few key questions. Among my favorites are:
- "Are you most interested in getting top dollar, or are speed and certainty more important to you?"
- "How soon would you like to be 100% done dealing with this house?"
- "What do you think it would cost to get the house ready for someone to really love living in it, and are you prepared to make those renovations?"
The added bonus here is that, since I'm not terribly invested in their responses, I don't come across as pushy or desperate. This is all about them and their needs. I'm just the guy checking to see if my help is needed here or not.
And everyone, including sellers, loves talking to that guy...
2 - Listen and Think Like a True Advocate
Once I've determined that the seller does have a serious and pressing real-estate-related need, my next step is to figure out how to solve it.
Note, I did not say that the next step is to buy their house. Only once I understand the full situation can I know whether I even want their house. The only way to know for sure is to wade waist-deep into the details.
And, the seller will gladly give me all the specifics I need, as long as they recognize that I'm truly here to help, not to push for a sale or try to steal their home. They need to trust that my agenda is aligned with their own.
This trust must be earned, but once you have it, you can sidestep that whole awkward and uncomfortable tug-of-war to extract critical intel from an unwilling seller.
My mission is to fully understand the seller's situation and suggest multiple solutions that could resolve their specific challenge. I call this approach Deep Service, and my positioning is direct, honest, and simple:"I can't help you unless I know the whole story, and you do want my help, don't you?"
That said, we are investors, after all, so eventually we need to buy something. So, of course, always get the deal if you can! Just be open to the idea that selling the property is not always the ideal outcome, for the seller or for the investor.
Over the years we've done many great deals with sellers. But we've also helped sellers: list with a great agent; refinance their home; deal with problem tenants; delay a foreclosure sale; secure a quality contractor; and, engage a great attorney. In every one of those cases, the best solution for the seller didn't involve us buying their house at all, but we were still able to add value by making a great referral or recommending a resource or strategy the seller hadn't considered.
And, everyone loves anyone willing to stand in their corner and genuinely help out.
3 - Leave the Door Open and the Welcome Mat Out
Sometimes, the seller already has a pretty solid plan in place for selling their house. In the old days, upon realizing this, I would congratulate them and then make a swift, if not graceful, exit.
Now, even if there's no deal to be done at this time, I'll always ask the seller One Last Question: "It looks like you have this whole house thing handled, but would it be OK if I checked back with you on <Critical Date>, just in case?" (An example of a Critical Date would be when their agent listing agreement expires, or when the sale is scheduled to actually close.)
No one has ever said no to this question. No matter how confident the seller is that they don't need me, everyone loves having multiple options and exit strategies at their fingertips. And, we've all seen our perfect plans crash and burn at the last minute at least once in our lives.
Better still, by explicitly asking for (and getting) their permission to follow up, I can call again later without ever feeling like a pest or a weasel. Hey, I'm just honoring my promise!
And when I do follow up with the seller, they're genuinely happy to hear from me!
If everything is still on track, then I ask my One Last Question again, but now with a new and later Critical Date. I will repeat this until the property is either all the way sold to someone else, or until I get the contract myself, whichever comes first.
Get Yourself a 5-Star Movie Review
The upshot of this Deep-Service approach is that now sellers want to talk to me. I'm their Idea Guy with all sorts of creative suggestions and helpful referrals for solving their particular problem. They gladly take my calls, respond to my texts, and call me back to share recent developments.
In response, I love talking to them and it shows on my smiling face (in person) and in my excited voice (on the phone).
And, that makes me feel like a true movie star!