I don’t remember where I heard it. Probably in one of the 10,001 REIA meetings I’ve attended over the years. But I instantly knew it was brilliant and I’ve been using it over the past several years to put a lot of money in my pocket.
What I’m referring to are two words that every real estate investor should have in their arsenal. The words are “Company Policy.” If you know how to properly use these words they will help you overcome a lot of objections and save and make you a ton of money.
For example, right now I’m in the middle of a subject-to deal. The sellers aren’t facing foreclosure and they’re not in any dire straits. Like many landlords that I do deals with they’re just sick of the hassles of owning a rental property.
Well, one of my goals is to get sellers to pay all of my closing costs. This usually amounts to around $3,000. So when I’m doing a deal I tell the sellers that they must pay the first $3,000 and that we’ll cover anything after that. When people object (like the folks I’m working with did) I tell them that its company policy they pay the first $3,000 and that we cover the rest.
Those “magic words” words often satisfy people and they don’t object anymore. (It worked on my current deal too.) Also, even before any objections arise at all you can use the words. If you’re sitting at a kitchen table explaining something you can say, “Mr. Seller, here’s the XYZ form and it’s company policy to have you sign this and pay for so and so.”
However, in order to use this line you have to have confidence. You have to not be so desperate for a deal that you’ll beg, borrow and steal to close a transaction. By the way, the more confidence you display, the more people will want to work with you and obviously, the more deals you will close.
But let’s say that you’ve got a really profitable deal…
And you use the “company policy” line and it doesn’t work. Then what do you do? You tell the seller that you’ll go back to your supervisors’ and talk to them and see if they can work around whatever the objection is. But you also tell them that you cannot guarantee anything.
By doing this, you never back yourself into a corner and you can always come back to a seller and tell them that “just this once you’ll do a huge favor for them and pay more closing costs, etc. etc. etc.”
Everyone I know who’s started using “company policy” has closed a lot more deals and have been amazed at the results. Try it out for yourself on your next deal. You’ve got nothing to lose.
Photo: Liz West