So, you've put out some marketing like an ad on CraigsList, a classified ad in your local free weekly newspaper, maybe a few bandit signs or even some direct mail and now the phone is ringing with sellers calling in. What do you do? How do you handle the calls? What kind of information do you need to get over the phone?
Well, that's what we are going to cover in today's article: what you are actually trying to do on the telephone when your motivated sellers call.
First, if you are able to take the calls live: do it. If the calls are going to voice mail or an answering service, it is critically important that you call them back as soon as possible.
Second, use the property information form that you downloaded from us or that came with another real estate course that you've purchased as a way to systematically capture all the information about the property and the owners.
If you can pull from public records or your local MLS the information about the property before your call, then use the call as a way to verify that the information you have is valid instead of asking for the information all over again.
Besides the basic info about the property like bedrooms, baths, and square footage, you should be getting the following pieces of information from the seller:
- What do the sellers think the house is worth and how did they determine this value?
- What do the sellers owe on the property?
- What do the sellers want to sell the property for?
Why do we want to know these three key pieces of information? Because to negotiate effectively, you need to know what they think the value of the property is and why they think that, because they might be using bad data for their valuation. If that's the case, you want to be prepared for your meeting with them and be able to bring documented proof of more reasonable values. For example, they may be using a free on-line home price website that is giving them significantly over-inflated values. You could show them actual houses, similar to theirs, that sold recently to bring them back to reality.
In today's market we are seeing a large percentage of houses where the sellers owe more than the house is worth. Unless you plan to do a short sale with the lender to have them accept less than what is owed, you may want to pass on deals like this. That's why we want to know what they owe.
Asking the sellers to tell us what they want to sell their properties for will often give us an indication of motivation. Someone who tells us their house is worth X and wants to sell it for $10,000 more than X might not be motivated or have realistic expectations. However, a seller who knows their house is worth X, but would be willing to sell for $20,000 below X, might be worth talking to.
Of course, there are many other possible questions to ask when dealing with seller phone calls. For example, some people also think you should ask what needs to be done to get the property into excellent condition on the phone, but I prefer to discuss this when I meet the seller face to face. For me, I prefer to ask for some very basic info. This lets me do some research on comparable sales and pull up information about that house before I meet with the seller in person to discuss their property and how we might work together.
James Orr is a professional real estate investor, marketing expert and founder of the LearnToBeRich.com on-line investment game.
He works with a network of real estate agents, brokers and real estate investors across the United States through the AnalyzedDeals.com website.