You could build a sound wholesaling business with effective marketing techniques and the best follow-up systems, but none of that matters if you can’t close motivated sellers. No matter what stage you’re at with your business, there’s also room to improve your negotiation skills.
I’m frequently asked about how to talk to prospective sellers and how to seal deals. Earlier this year I held a live Facebook session that I want to re-share here. In this video, I introduce Matt Fullerton, who is Express Homebuyers’ Acquisitions Manager. We discuss how to negotiate with and close motivated sellers. Before we jump in, we share a bit about who we are, what makes us qualified to share advice with you and – most importantly – why you should listen to us!
This is a great resource for you to learn some of our tips and tricks.
The Initial Call
So what is the most important part of that process? It’s most definitely relentless follow-up. If you look at the greatest salespeople, they are the ones with the best follow-up.
The next most important thing in the sales process is the ability to negotiate effectively. What exactly does that mean? It means coming to an agreement with the person you’re buying the house from or the person you’re selling the house to that’s mutually financially beneficial. You get what you want and they get what they want as well.
We demonstrate this point in our role-playing. I pretend to be a prospective seller and “call” Matt. “I saw your TV ad and I’m interested in selling my house.”
Matt gets the address of the property and the information and explains the process. All the while, Matt is mirroring and matching what I’m saying as the caller. He’s asking the question back to me just to make sure he heard it. This method also tells the caller that Matt’s listening.
Next he asks for clarification about the condition of the house and why the I need to sell. When I say the house is “in great shape,” Matt says, “The house is in great shape. What does great shape mean to you, Brad? A lot of times it means something different to me than it does to others.”
When I ask how much Matt will pay for the house, Matt says, “Well Brad, I’m going to do a market analysis here. I’m going to take a look at what houses are selling for in your area as well as what our estimated repairs are over the phone. I’d really like to give you a hard number but the best I’m going to be able to do without putting my hands on the house is a range.” And then he schedules a home visit.
The Home Visit
At the home visit, Matt works to build rapport and trust with me, the seller. He explains the process and finds commonalities, such as “I like your picture there, Brad. Hey, I’ve read that book.”
Understand that only 8% of buying decisions are based on price. People don’t care about price for the most part. What they care about is that they can trust the person with whom they’re dealing. There have been several times Express Homebuyers got the deal despite their lower offer because the home seller felt more comfortable working with them than someone else.
At the conclusion of walking through the house, you get to the price negotiation. Generally, Matt finds out a number from the seller on the phone, before making the home appointment. He also gives the seller some sort of range that he thinks he’s going to be in.
(There’s a lot of great, realistic conversation between me and Matt in this part of the video.)
Going back and forth with me, discussing what a neighbor’s house sold for and what condition it was in, and finding out why I think my house should be that much and what I think about his number. Ultimately, what Matt’s doing is trying to get Brad negotiate against himself.
Throughout this process, you’re going to be focusing on the seller’s pain points, while continuing to build rapport. Matt makes jokes with sellers and makes them feel as comfortable as possible. He might put his hand on their shoulder to make them feel more comfortable, more relaxed, more trusting. And then he’s going to focus on how he can solve the seller’s problems. Again, people buy for two reasons.
They have an external problem and an internal problem. The internal problem is always emotional based and is the one that drives the decision-making. In the case of this example, the seller’s emotions are he’s scared by his health problems. He wants to get closer to family to either have them take care of him or vice versa. Matt is going to really hone in on that and say, “Listen, we can be the ones who…”
Now when you get down to your ultimate, “I checked with my office and this is what we can do for you” number, it’s better to use an exact number, such as $203,416. Why? Because an exact number makes it sound like the seller just squeezed every single penny out of your pocket. If you say $203,500, it sounds like there’s more room there, but $203,416, there must have been a lot of accounting work going into that last $416.
This same tactic works for Realtors as well. When you’re setting the price on the listing agreement, talk in detailed specifics because there’s a good chance your seller will then say, “Wow, this agent really knows what they’re talking about. They’ve really done their homework and they know it down to the penny.”
Last words of advice on how to negotiate with and close motivated sellers are find pain and find leverage, and use it to your advantage. Focus on the internal things. Are they embarrassed about their house? Are they stressed about losing it? Why did they call you? Focus on that, and then let them know how you can solve it.
Some of the best books Matt and I’ve read and recommend:
- Pre-Suasion by Robert Cialdini. In it, he talks about how people typically don’t let someone into their house unless they really trust them.
- Start with No by Jim Camp.
- Never Split the Difference by Chris Voss, is an awesome negotiation book.
- SPIN Selling by Neil Rackham is another good one. It lends itself to our sales process.
- We both also highly recommend working with sales trainer John Martinez. You can get in on an incredible discount deal he’s offering by clicking on THIS LINK.
You owe it to yourself to give this life everything you’ve got. It’s such a crime to just get by. God gave you so many tools, opportunities, resources, creativity, talent, intelligence, awareness, and so much more, so use it. Create the life you want. Give it your all and make this life count. You will never regret it.”