If you want to really be successful as an investor, you must consider yourself "The Doctor" to the Seller's problems. Just like medical doctors, Sellers must see you as being professional, well educated, acting on their "patient's" best interest, and bound by a high code of ethics.
The medical process is the same everywhere. Whenever you go to a doctor, of any kind, for any condition, he will follow the three-part sequence of examination, diagnosis and prescription.
Unfortunately, most new investors do it backwards. They spend all of their time telling the Seller about their company, services, and how great they are, instead of finding out what the Seller wants or needs.
At the end of the conversation, they know all about the investor, but the truth is that the Seller DOES NOT CARE ABOUT THE INVESTOR! At best, if they have not fallen asleep or tuned the investor out, they have already made a decision.
And that decision is: to NEVER DO BUSINESS WITH AN INVESTOR WHO INVESTS ZERO TIME TO UNDERSTAND the Seller's NEED.
BEGIN WITH A THOROUGH EXAMINATION
The Key: Find Seller's Pain
Investors often miss this important variable. Therefore they do not really know what strategy to take when dealing with a Seller. If the Seller was not in "pain" they would never have called you, but they did call you because they knew that they had a problem that needed fixing. You've got to discover the financial impact or economic value of the problem. You've got to get the Seller to tell you how much it's costing them or how much sleep they are losing because something is not right with their house situation.
DIAGNOSE THE SELLER'S NEEDS ACCURATELY
The second phase is that of diagnosis. In diagnosing a Seller, you would repeat the results of your examination and double check to be sure that the problems that you detected were the real "pains" being experienced by the Seller. You would ask additional questions to confirm and corroborate. You and the Seller would mutually agree that this diagnosis seems to be an accurate description of the condition or problem.
Examples Identifying Opportunities to Profit by Eliminating Seller's "Pain" …
Seller needs quick solution …
Remedy: We can close in 8 days, but 24 hours – if necessary.
Seller wants to stop worrying about the house sale situation …
Remedy: Let us take care of your worries and put you at ease.
Seller is afraid of taking a major loss on the sale since they have no equity …
Remedy: We'll pay full price.
Seller does not want to be a landlord anymore. The property may have been rented for many years and have "tenant damage" …
Remedy: We'll fix it up and take care of management issues while allowing the Seller to retain tax advantages.
Seller is concerned about their declining credit rating – if payments are late …
Remedy: I'll guarantee your payments, electronically.
Seller has had property listed with a Realtor for 6 months or more and has not gotten an offer …
Remedy: We do not want to list your house we want to buy it.
Prospective home-buyers who have already viewed the property (if any) are not qualified to buy, or can not afford to buy AND fix it up …
Remedy: We'll buy it and fix it up.
Sellers are divorcing and will do anything to get away from the property – and each other …
Remedy: We can close quickly so you can go your separate ways.
Seller may have received many low-ball cash offers …
Remedy: We'll pay full asking price (by taking over their payments).
Seller wants to get out of debt.
Remedy: We'll payoff Seller's debts off with the sale of the home.
DETERMINE THE RIGHT PRESCRIPTION
Once this mutual agreement has been reached, and you have identified the "pain" accurately, you can move on to phase three. This is the prescription phase, where you show the Seller that your service is the best available treatment, taking all the factors of the Seller's situation into consideration. You show that, on balance, what you are suggesting is the best of all possible solutions.
Investors who buy the way that doctors treat patients find that their deals proceed far more smoothly and result in bigger and better profits in less time. Spend more time asking great questions like doctors, and less time talking about yourself and your company, and you'll create more opportunities, close more sales, and make more money. By asking better questions, and being interested in the answers, you can discover what the Seller's problems and issues are and then offer a solution. Most of the time, if they are not motivated, they will tell you straight out, right then and there. Hopefully, you did not make a trip for them to tell you this, but you learned this when you spoke to them on the phone using the Seller's INFO Sheet (mentioned earlier in this course).
During each conversation, you should ask detailed and clarifying questions about what the Seller is trying to accomplish, what the Seller's goals and objectives are.
A question I also like to ask is "What would you like to see happen?" And then I LISTEN while taking detailed notes about everything the Seller is saying as you're filling out our Seller's Info Sheet (which ask all the important questions you need to know about the seller and if it's a possible deal) – even on appointments. Its okay, they will respect that you are taking notes on how you can help them better.
Another good question I like to ask is, "What would you like our company do to help you?" This question really allows me to find out what the Seller is thinking and exactly how I can help them. This is also a question that is very easy on the ears and gives the sellers a sense of caring and peace. So I really do not have to guess or pressure them because getting to their motivation is just a couple of questions away. And once I ask those key questions, I know whether I have a deal or not.
And to seal the deal, the one question I use is: "When would you like our company to help you in your situation?"
If the Seller tells you that they have no real timeline, that they will just wait until the property sells, then this is often a sign that you are not dealing with a motivated Seller. Make sure you protect your time by being willing to walk away if it becomes clear that there is not enough motivation.
Main Goal is to Built Credible Rapport
No matter how the Seller responds, your main goal is to open a line of communication and develop a conversation about the property and the needs of the Seller. I know that some deals take 5 to 7 contacts before they close, so an important aspect of our system is follow-up. Even though they may not do business today, they certainly can call you back 3 to 9 months later because you keep sending postcards and letters and are constantly on their minds. Here is where you separate yourself even further from the other investors and buyers. I used to be surprised if they called me after a meeting or a phone conversation I had with them a year ago, but by continuing to send them letters and postcards, they remember me and call me because I was first on their minds.
If you will treat your real estate business like a doctor's by examining, diagnosing and prescribing a Seller's problems, you will make just as much as doctor and even more.
Remember, the sooner you get the Seller to start talking, the closer you are to arriving at an agreement and putting together a transaction.