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Have you ever felt intimidated to know what to say when a seller calls you back and you know that you need to give them a below-market offer on their house, but you feel that weird feeling in your stomach, like, OOH, I just don't know if I can do it?
In this blog, we're going to cover exactly what to say to the seller. That way you have confidence and know how to make that offer that allows you to find discounted real estate and build wealth and freedom in your life. Featuring some helpful tips and tricks from The DealMachine REI Podcast hosts David Lecko and Ryan Haywood.
The Simple Approach: Just Ask for an Offer
One simple yet effective approach Ryan suggests is to directly ask the seller if they are interested in getting an offer on their house. Whether you're knocking on their door or speaking over the phone, keeping it plain and simple can work wonders. This approach allows you to initiate a conversation and gauge the seller's interest without immediately pushing for specific details.
Ryan shares that in their real estate business, most conversations with sellers start with a postcard. The seller usually mentions receiving the direct mail and expresses curiosity about the offer. This is when Ryan takes the opportunity to ask them to tell him more about the house. He explains that hearing a little bit about the house upfront can provide valuable information and help in determining the next steps.
Handling Difficult Conversations
Selling a house is a big decision for most people, and it's natural for sellers to have emotional attachments and concerns. Ryan and David acknowledge that these conversations can be challenging and nerve-wracking. It's essential to approach these conversations with empathy and transparency.
Ryan emphasizes the importance of explaining the rationale behind your offer to avoid coming across as offensive. He suggests offering an explanation of how you arrived at your offer price, taking into account factors like property condition and market value. This demonstrates your professionalism and genuine interest in finding a mutually beneficial solution.
David shares his approach of starting the conversation with a statement that acknowledges the potential to offend the seller. By stating that you don't want to offend them and then explaining the reasoning behind your offer, you create a more open and understanding atmosphere. This can defuse tension and allow for a constructive dialogue.
Gathering Information and Setting Up Appointments
During the initial conversation, Ryan advises gathering important details about the house. Asking questions about the number of bedrooms and bathrooms, and the condition of the roof, furnace, and water heater can give you a rough idea of the property's condition. This information can help you assess potential repair costs and estimate an offer price.
Both Ryan and David stress the importance of setting up appointments promptly, whether it's meeting in person or over the phone. Demonstrating your eagerness and professionalism by being flexible and accommodating to the seller's schedule can set you apart from competitors who may delay or postpone appointments. Being prepared and ready to make offers swiftly shows your commitment to helping sellers and can give you a competitive edge.
The Best and Worst Seller Call Stories
Ryan and David share some of their best and worst experiences during seller calls. One of David's most successful calls came from a seller who responded to his postcard after months of receiving them. The conversation was straightforward and resulted in David acquiring the property. He emphasizes the importance of staying calm and focused on the next step, even when you might lack experience or have limited information.
Ryan shares a particularly challenging call where the seller was initially angry and demanded to be removed from their mailing list. The conversation took an unexpected turn when Ryan empathized with the seller's frustrating divorce situation. By expressing understanding and demonstrating genuine interest in helping, Ryan was able to turn the conversation around. Although the deal didn't materialize, the interaction highlighted the importance of empathy and adaptability in difficult conversations.
Taking Action with Limited Information
Ryan recalls an early experience where he purchased a property for just $1,000. Despite having limited information about the house, he took action and acquired it. His initial objective was to wholesale the property, but after potential buyers showed no interest, he decided to turn it into his first BRRRR (Buy, Rehab, Rent, Refinance, Repeat) property. With an investment of around $52,000 in renovations, the property which started at $1,000 resulted in an ARV (After Repair Value) of $92,000 and now generates steady rental income.
Another interesting story Ryan shares involves a house he bought for a single dollar and an Applebee's gift card, which he later sold for $8,000. This example demonstrates how unconventional approaches and creative problem-solving can yield profitable opportunities in real estate.
Conclusion
Confidently handling seller calls and making below-market offers is a crucial skill for real estate investors. By approaching conversations with empathy, transparency, and preparedness, you can navigate these interactions successfully and unlock valuable investment opportunities.
Remember, it's okay to feel nervous, but with practice and experience, you'll gain confidence and become more proficient in your real estate investing journey.