Talking with sellers on the telephone is something I do all the time. On a busy day, that can mean a dozen or more telephone conversations with people who have properties for sale. Typically, they’re calling on my ad or a postcard I mailed, and I’m on the phone with them for one reason only–to do business.
And do you know what? Every once in awhile an eager seller and I are able to put a deal together right there on phone. How’s it done? By getting on the same page with the seller!
In order for any of this to make sense, you really need to understand that whenever I’ve got a seller on the other end of the line, I’m much more interested in the seller’s situation than I am hearing the details of their particular property.
As far as I’m concerned…a house is a house is a house, and if you’ve seen one, you’ve pretty much seen them all. I’m not at all interested in the square footage or the number of bedrooms…I’m only interested in the seller’s current situation. He’s called, and I want to know why.
Unfortunately, sellers don’t normally just come right out and tell you what you need to know. Instead, you have to get them talking and, as they’re talking, you really have to pay attention to what they’re saying.
Don’t forget, my goal is to be able to climb inside their heads and really tune into their situation so I can put together a proposal that solves their immediate problems. You can’t do that until you’re on the same page.
It’s all about the questions you ask
So how do we get the seller to open up and start talking about the things we really need to know? Or how do we move the seller in the direction we want things to go? It’s all about the kinds of questions you ask.
Nearly every real estate course in existence instructs you to ask the seller about the number of bedrooms in the house. Or they tell you that you should ask about size of the lot. Some even give your a list of questions to ask with little boxes to fill in. Me? I couldn’t care less about that stuff.
Believe me, you don’t need to ask those kinds of questions. Sure, they’ll come up eventually and you can talk about that stuff when it actually matters or when you’re at a loss for what to say next. But until you’ve confirmed you’ve got a motivated seller on the other end of the line, those kinds of questions are a waste of time.
Instead, ask a question that forces the seller to ever so slightly tip his hand. How? I’ll often start off by asking something like…
What sort of time frame are we looking at here?
And when they answer, “Huh?” I’ll ask . . .
You know, how soon do we need to get this done?
That’s a question that’s designed to gently shake things up. If there’s a problem that’s imminent, we’re likely to discover it from the outset. Think about it, would your rather know the number of bedrooms or the nature of a particularly pressing problem that requires immediate attention. See the difference?
Knowing the number of bedrooms doesn’t do us much good at all, but discovering that foreclosure is just around the corner is something we really need to know if we’re going to be able to tune in and get a handle on their situation.
Now, if the fellow says he’s in no big hurry, it’s likely he’s not sufficiently motivated for the two of us to put something together and that phone call won’t be lasting a whole lot longer.
But if he says he’d liked to have had it squared away “yesterday,” then I know we may be on to something because yesterday is just about when I’d have liked to have done it myself. So instead of asking the seller about the type of heat in the house or the color of the kitchen, I might say something like…
I know you’d like to get this thing sold, but what is it you’re really looking to do here?
That’s one that causes them to scratch their heads and really get down to the nitty-gritty quickly. It’s exactly what we’re looking for, because until I know their expectations, I can’t formulate a plan that will solve their problems and get them squared away.
And sometimes when we ask a question like this, we learn that, no, they really don’t want to sell. Actually, they’d love to stay but they’re behind in payments and can’t get the money together to bring things current.
Great! We may have a better solution for them, one that keeps them in the home after all. Of course, if we’d only asked about the condition of the roof, we’d never have discovered this.
Ask questions to move them where you want them to go
Once we know what they’re really trying to accomplish, we decide how we might be able to assist them, and then we try to move them in the direction we’d like to see negotiations go. So, when it sounds like they just want out, I’ll ask…
It looks a little skinny. Are you expecting to walk away with any money here, or would it help if I just took over payments?
That takes negotiations right down to their “bottom dollar” quickly. If they’re planning to just walk away, we’re likely to learn about it with a question like this. And if they’re only expecting a thousand or two, we often discover that right here as well.
Of course, if they’re talking like there’s a whole bunch of equity here, and they plan on getting as much of it as they possibly can, I know that rather than buying this property today and having to come up with all that dough up front, I’d rather do a lease option that gets me into the property for next to nothing.
Now, DON’T ask the question “would you consider a lease option?” Grrrrr. That’s missing the point.
Remember, you want to gently move them to where you need to go, not beat them over the head with YOUR big ideas. I introduce the lease option conversation by asking…
What are you going to do if it doesn’t sell?
What am I hoping they’ll say? “We’ll probably just rent it out.” And when they do, we move right into talking about a lease option by asking things like…
How would that work?
And then we let them tell us about THEIR big idea.
Questions are the key
The quality of the questions is what separates the novice investor from the real estate pro. Questions that can be answered with a “yes,” a “no,” or a number are probably questions you don’t need to be asking. And don’t simply try to memorize my questions–that’s not the idea here. These are merely examples to show you the flavor of how successful negotiations can go.
Get on the same page with the seller. Get into his head and figure out his objectives by asking questions that gently force him into opening up, and then use questions to move him in the direction you want things to go. Done well, it’s magical.
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