Most of us will inevitably have to speak and interact with sellers, again. This can be a nerve racking time for both you and the seller(s). Whether you are just starting or an old pro, we all feel the butterflies from time to time.
Don’t let inexperience sabotage a potential slam-dunk deal. It is too easy to let a seemingly harmless comment permanently damage your relationship with the seller. People have all sorts of personality style, speech patterns and humor levels; being respectful and learning these will help you relate better to people.
Let’s cover some common things that investors say or do that you shouldn’t:
- Being too honest – Yes you should always be honest with everyone, but walking through a property pointing out every flaw will not earn you points with the seller. I remember walking through a property for sale and laughing jokingly at the terrible paint job in one of the bedrooms. It turns out the seller’s daughter, who had passed away years before, had painted the room herself. Needless to say I felt like a jerk and the rest of the time I spent there seemed uneasy.
The property will always have more sentimental value to the seller than to you. No matter the condition, stay professional and never look down at a sellers’ living conditions. The sellers need a friend now more than ever. Acknowledge the defect, account for it, and move on.
- You’re not going to get that price – People typically do not like to be told that they can’t or won’t get something. It is important the sellers know you have their best interests in mind, and that you’re not just trying to make a quick buck. If the seller is asking way too much for their home, tell them by being honest and tactful. Tell the seller the current prices your company is buying comparable properties for in the area. If you haven’t yet bought a property make up a reasonable, but low price as an example to the seller. Try suggesting that the seller list the property through a Realtor, this instantly establishes a bond of trust because you are giving the seller an outside alternative to you/your company — plus, you can already assume the seller won’t call a Realtor because they need a fast sale.
- I can definitely do that – You always have the best of intentions when promising a seller something, but issues may always arise. Try to always under promise and over deliver. Sadly, in the past, I have done the exact opposite! It is hard to regain trust with anyone when you agree to a certain price or terms and can’t deliver. Until you write a contract use words like; “this sounds doable”, or “I don’t think we’ll have a problem getting this done.”
- I have all the answers – Unless you know everything about everything (no one does), you will never have all the answers. Often when we first start investing, we dread being asked a question we can’t answer as real estate can be confusing.
What will happen if you do not have an immediate answer to a seller’s question?
You may think that you’ll be laughed at, called a fraud and ran out of town!
Of course not.
If the sellers know you are passionate about helping them, you don’t have the answers to every question. Say something like, “that’s a great question. I am curious about that myself. I’ll get that answer for you within the day.”
- Take it or leave it – Some investors tell sellers to “Take it or Leave it.” It is easy to develop a rapport with sellers if you end up following these investors to the door. While “take it or leave it” gets your point across, it leaves no wiggle room for the seller. When you lock yourself into 1 or 2 firm offers, you cut the seller off from giving you feedback; you may have been only be a few cents away from finalizing a great deal.
As real estate investors, we tend to look at properties just as numbers on a balance sheet. How much cash can we make on this deal? Try to always remember that the house might still be a home. Be a friend to the seller, stay professional, and make the sweetest deal you can. You will be surprised how these little tricks can help you close loads more deals. Plus the positive word of mouth advertising will be priceless.
Profitable investing everyone for 2010!
– J. Fed