From Meeting To Signed Contract In 4 Easy Steps
As a real estate investor, it is your job to convert leads into deals. How well you are able to do this is what gauges your success and separates you from every other investor in your area. This takes much more than stating your case and hoping that things go your way. There are certain ways to speak to sellers. When you take the time to speak to them and explain your process, it will build a trust that often leads to you closing a deal. Being a fast talking salesperson does not work. The direct approach is the best approach. There are four steps you should follow to get a seller to accept your offer. This article will help you to go from meeting to signed contract in 4 easy steps.
Step 1 Initial Contact
When you are dealing with sellers, it is much different than dealing with bank owned properties. When working with a seller, you can communicate with them directly. When you go through a real estate agent or a negotiator, you won’t be able to understand what the seller is thinking. Initial contact is the first and a very important step. It doesn’t really matter who reaches out to who, as long as you make a good impression during the first conversation. It will set the foundation for all of your future communication with the seller. During this conversation, you want to find out about the property while answering any questions that the seller has. One important thing to find out is what is the seller’s motivation for selling. The answer to this question will drive the rest of the transaction. By finding out as much about the property during the first conversation will give you an idea whether you would be wasting your time pursuing the deal.
Step 2 Due Diligence
After you speak to the homeowner, you have a lot of work to do. You should never take all of the information that the seller gave you as fact. It is important that you verify all of the information about the property that you were given or any numbers that you were given during the initial contact. You should look at recent sales of homes that are similar to the one that you are interested in and find out what these homes sold for. Also, you should take a drive through the neighborhood so that you can get a good sense of the feeling there. You may think that you know the neighborhood, however, the house could be in a subsection that can change your views. The more you know about the neighborhood, the better as it can have an impact on the property value. You should have all of this information within 24 and 48 hours after your first conversation with the seller. You should know everything you can before you meet up with the seller to see the property.
Step 3 Follow Up At the Property
Just like your initial conversation, you should get as much information when you meet with the seller at the property for the first time. If you are not an experienced investor, you should bring a property checklist so that you know what to look for and you don’t miss anything. You should begin with the exterior of the home and work your way in. If there are any issues with the home that would require costly repairs, you should write them down. If there a problem in the attic or basement, it can have an impact on what you are planning to offer for the property. After the tour, you should sit down with the homeowner and talk numbers. Be sure to bring your comps with you so that you can validate your offer. You should avoid trashing the property, however, you need to make sure that the seller understands where you are coming from. You should start by asking the seller what they think their home is worth. This will set a starting point for the negotiations. If the number is too high, you can explain why you feel that way and give a more realistic number. You can explain what you can do and how you plan to do it. You can also get into the expected time frame and let them know how they can benefit by working with you. You should not try to hide the fact that you are an investor trying to make a profit, however, you should highlight the risk that you are taking on. The seller will appreciate your honesty and be more willing to work with you.
Step 4 Signature
One out of 10 times, the seller will agree to work with you as soon as your finish your presentation. The other 9 times, you would need to be patient, but still, push the seller for an answer. If they are not ready to commit, you should set a firm date that you expect to hear back from them. You should give them no more than two or three days. When they do contact you, it is important that you find out what they are feeling. In some cases, you may need to change your timeline or your numbers a bit. One thing that you don’t want to do is give the seller too much time. If you allow them to continue to put you off, they will for several weeks. You should stress any dates that are important for a short sale or foreclosure. If they still refuse to commit, you should let them know that the offer you are making now may not be the same in a few weeks or months. When telling them this, never be condescending or pushy. It is best to put yourself in the seller’s shoes. You should try to understand what they are going through. If you think like a seller, you will get many of your offers accepted.
In order to close a deal as quickly as possible, you should follow the above tips. The more you know about dealing with sellers, the more successful you will be.