Rich Dad Education – Real Estate Blog

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Talking To Sellers

You can’t turn an unmotivated seller into a motivated seller.

Understanding this statement will save you from wasting your time when speaking to sellers.  Knowing the right questions to ask the seller and qualifying their answers will help you quickly determine if they are truly motivated or not.

Don’t Waste Time

That means yours and the sellers!  First, determine if the seller can sell the house at a price that will give you profit or cash flow.  I don’t want to waste thirty minutes on the phone with a person that just wants to see how much they can get for their home.  Find out if they purchased the home a short time ago, if they have just refinanced or if they owe more than the property is worth.  These are situations that may not allow you to purchase the home at a discount.

When a seller starts to describe how great the house is this may be a sign that they are wasting your time.  You want to build rapport with the caller and listen to what they are saying but don’t waste your time if you can’t get a word in edgewise. These folks are probably not motivated.  You want to look for situations like the following:

    • A job transfer
    • A seller who has a house in disrepair
    • A tired landlord who is sick of tenants not paying rent and destroying their house
    • A couple divorcing
    • An estate in the middle of probate
    • An inherited home the heirs do not want to be bothered with
    • A person facing foreclosure
    • A seller that has purchased another house and is paying two mortgages

Gathering the Information

A simple conversation with the seller will help you quickly gather information and decide if the seller is motivated and “wants” to sell their home or “needs to sell” their home.  Quickly asking questions will reveal the level of motivation of the seller and how much of a discount the seller will give.

There is typically no exact order to these questions.  Ask them in a way that makes the conversation flow. You will also want the seller to know you are really listening to them and not just recording their answers. You can expand on their motivation to sell by asking open-ended questions.  I like to have a form in front of me to fill out with the answers to my questions.  The form I like to use is in the Rich Dad Education Elite Wholesale Training workbook.  Following a script can sound just like “a script” and you want this to be more like your own conversation.  I find the form reminds me of what I need to ask but I put it into my own words and not someone else’s.

Here are some questions that I feel will give you a better understanding of when a seller is motivated and when they are not. You will get better at this with practice and eventually you will be able to tell if this is a property worth pursuing during your initial conversation.

    • Find out what is the address of the house?
    • How much are they asking for the house?
    • What similar houses are selling for in the area?
    • How many bedrooms and bathrooms does the house have?
    • Any garages, basement, attic?
    • What kinds of improvements have been completed within the last five years?
    • Does the house need any repairs?
    • When was the last time the kitchen and baths were updated?
    • Is there a mortgage balance on the house and if so how much is owed?
    • How much are the mortgage payments and are they current?
    • If they are not current on their payments, how much is needed to catch up the payments?
    • Is there anything that you do not like about the house?
    • How fast do you want to close?
    • If I were to pay cash and close quickly, what is the least amount of money you would be willing to take for the property?
    • How did you find out about me? (Keep track of which marketing is working best for you.)

Spend some time having them explain the problems they are facing and figuring out just how motivated they are. Most sellers, even the motivated ones usually give high asking prices at the start. Don’t let this discourage you.  You need to make an offer that makes sense to you as an investor.  Also, if they will not tell you the mortgage amount, they are not motivated.  A motivated seller will always tell you their financials on the house.

Listen to the Seller

If you listen to the seller’s situation you will build rapport with them and be in a better position to offer what they are willing to accept.

Often times it’s not about the price but the situation the seller is in.  Many sellers are worried about what they are going to do with all of the personal property that is in the house. Some might be in a predicament and will need to remain in the house for a couple weeks after the closing. If you are listening to them and can determine what the problem is, you can offer solutions. Find out what they really need.

Building Rapport

Talk to the seller about things that come up in the conversation.  Don’t be the power house real estate investor. This will makes them feel uncomfortable.  Most motivated sellers fear someone will take advantage of them.  I get them to want to sell to me.  Often my offer is lower than my competition…but they liked me.

Never tear the house apart whether you on the phone or in person. The sellers know what condition their house is in and are probably embarrassed as it is. I usually just talk briefly about the positive and negative aspects of the home.

When you are actually at a property, take the time to sit and listen to them.  It may be tempting to rush through a house but you should give them time to talk and build rapport.

Negotiations

Don’t be afraid to negotiate even if their asking price is high. Most sellers expect a little negotiation between buyer and seller.  I find they quote the asking price equal to the tax assessor’s estimate of value initially.  Simply verify how they came up with that price and if they said it was appraised at that price, ask if you can get a copy of the appraisal. This is when you will find out if they truly have had an appraiser out or if they are just going by the county records.

If you have a lot of competition, get a signed contract to lock out the possibility of losing the deal.  If you find during your inspection there are problems with the house that were not revealed on your initial visit to the house, you can always change your mind about the price and renegotiate the contract.

These are some of the things I feel you must know when you are marketing directly to sellers. You will rarely have to do the hard sell in order to get a house under contract.  If you are dealing with motivated sellers and treat them with respect there is no hard sell needed. Go out and start talking to sellers and making offers!

Margie Cromwell
Rich Dad Education Elite Trainer

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2 responses to “Talking To Sellers

  1. Click here February 25, 2013 at 10:36 pm

    There are some interesting points in time in this article but I dont know if I see all of them center to heart. There is some validity but I will take hold opinion until I look into it further. Good article , thanks and we want more! Added to FeedBurner as well

  2. Brian Talley March 26, 2013 at 6:37 am

    Couldn’t agree more with this: “I don’t want to waste thirty minutes on the phone with a person that just wants to see how much they can get for their home.”

    Not a lot of folks ask questions and prequalify them to filter out the real sellers.

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