I can still remember it very clearly, the first time I took a motivated seller phone call. All that time and energy spent trying to produce a high quality list, scrubbing it for leads, making sure that I was intelligently spending my marketing dollars… and then the phone finally rings, and I could feel my heart jump.
What do most people do? They panic. I remember hearing here on the BiggerPockets Podcast the first time Danny Johnson took a motivated seller phone call, he panicked and threw the phone at his wife for her to answer.
My first encounter with a motivated seller wasn’t quite that dramatic, but I could remember feeling very uneasy as I was about to pick up that phone; in fact, I didn’t pick it up. I initially let it go to voicemail and had to work up the courage after the fact to dial back the number.
Of course, this was many years ago, and since then, I have put in a lot of experience and mastered the craft. Now I am so comfortable talking with strangers, it’s not much different than speaking with a friend. Not only that, but I can accurately predict what the seller will do or say depending on what I do or say. It’s like a big, complicated chess match in the back of my mind, and I know what moves will get me the winning play.
I would like to share some of that experience with you today, not from my perspective, but from the sellers I work with every day. The key is to think like a motivated seller – people say that a lot, but I don’t often see it explained in an actionable way that makes sense and can help you in the field. To really do this properly, you need to get in their mindset, so let’s role-play a bit.
The 20 Best Books for Aspiring Real Estate Investors!
Here at BiggerPockets, we believe that self-education is one of the most critical parts of long-term success, in business and in life, of course. This list, compiled by the real estate experts at BiggerPockets, contains 20 of the best books to help you jumpstart your real estate career.
Think Like a Motivated Seller
The key is to think like a motivated seller — put yourself in their situation. Let’s imagine for a moment that a close relative has just passed away, and you have several other siblings. The relative left everything behind, including the house, but did not put it in the proper vehicle to transfer the house to any one person. Now we have a probate situation with multiple heirs and a legal mess left in sorting through their legacy.
To complicate matters further, the other siblings are out of state and you are closest to your relative’s house. Now you have become the point of contact for sorting through all of this.
What I see time and time again in this situation, which is common, is that all the other siblings have their hand out at closing – but put in almost none of the work to get there. So now the seller not only has the stress of losing someone close to them, but also the weight of managing everything left behind with little to no additional help from his or her siblings.
At this point, no one is looking after the house since we hypothetically live too far away from the property to drive by and check on it a few times a week (another common situation). It has been a few months since everyone came by to clean out all the junk that had accumulated in the home – and now the grass is starting to grow over since you live too far away to keep an eye on the house.
And now code enforcement is on your back, sending you notices and fines. You open your personal mailbox, only to be flooded by postcards and letters from investors from all over the city. You begin to feel even more frustrated and upset. You just lost this loved one, and people are bombarding you with mail. What a bunch of vultures. You get upset and dump all the cards into the trashcan without thinking twice.
Working on Their Timeline
You don’t create motivation in this business. It all has to happen on the seller’s timeline – and you need to be front and center when they are ready to sell. In our hypothetical situation, the seller was initially not ready to sell the house to investors, but the hassles were starting to build up. Finally, once it reaches a tipping point, they will sort through the cards and either through luck or thoughtful intention, they will give you a call.
The First Call
The seller sees a bunch of XYZ capital or XYZ real estate group companies constantly mailing them, and they all start to bleed together and seem the same. He or she can’t make heads or tails of one company from another anymore. Every other card seems to say the same thing.
And suddenly in the back of the pile, there is one of my cards – just a picture of me and my wife describing what we do and how we are LOCAL people here to help. Sellers in this situation especially want to deal with another person they can trust – not some faceless corporation or something that reminds them of a bank. This is another reason I usually get the calls and many other investors never get a call in the first place. And when that call comes, you better be sure to drop what you are doing to answer it. Because if you don’t pick up, there is a pile of cards with your competitors on it, and the seller will just drop yours and pick up the next one to call.
I come into the home, and there are piles off other investor’s postcards. I see mine on a magnet on the fridge or pinned to a cork board. At this point the seller is at their limit; they have been being mailed constantly, they are sick of their siblings telling them what to do and not receiving any help, and they are ready to put this behind them.
It’s important to note at this point, many would be investors have given up mailing. While other investors come in and hassle the seller, beat them up on price, or don’t truly care about their situation, here is where I score a few wins. I genuinely care about the sellers and their situations, and I always listen carefully and try to offer the best advice possible. I go over contracts with them and make sure I answer any questions that may be looming in the back of their mind.
This is a tough time for them, so I try to be as comforting and informative as possible, even if that means selling to me isn’t their best option. You always know you have a good appointment if during the appointment you develop a good enough relationship at the house that the seller is starting to tell you what it was like to grow up there, gossip about the neighbors, or talk about how that last investor who came in was a jerk. And that’s always my goal: to build a relationship, to try and help them (again, even if that means no contract for me).
There will always be deals where the seller will parade as many investors through the house as possible to bid up the price as high as they can. But by far I find that if your offer is FAIR and you are the individual the seller has come to trust and respect the most, you will be the one walking out with the contract the vast majority of the time.
Hope my experience helps you net a few more deals in your business. Best of luck!
Investors: How do you form relationships with motivated sellers?
Let me know your experiences below!