Today, let us look into some of the mistakes that you, as a buying real estate investor, want to avoid while dealing with sellers.
1. Focusing on a Non-Seller
The first is pinning too much effort on a salesperson who isn’t really a salesperson. And it goes back to one of my favorite principles, which is the 80/20 rule, or the Pareto principle. In the case of real estate or when you are getting deals, convert 80 percent of your time into the 20 percent that will actually get you results. This is just an example.
You want to focus on someone whose property is in distress and the owner is really motivated to sell. Maybe they’ve just inherited it, or they’ve recently moved and they’re tired of managing it, or they need to be able to pay for some unexpected expense, or other examples of that nature. need cash. Another would be an owner who for some reason has a timeline to sell – whether it’s now or within the next few months.
2. Using Equal Pitch
The other mistake is running with the same pitch. In general, a complete game changer for me has always been a follow up. This is where money is made. But when you’re following up, if you’re consistently using the same message in your calls, saying: “Are you interested in selling now? now are you? Are you interested now? You will simply be put on the block list and the person will not want to talk to you again.
Connected: Real Estate Leads: How Much Do You Really Need To Follow Up?
So if you are able to be creative with the methods that you follow, it goes a long way. I’ll give you some examples:
- I like to use a Rubik’s Cube, a cute little one, with a note that says: “Hey, let’s figure it out.”
- Another one I’ve been implementing recently as a follow up is sending birthday cards.
- And another approach is value-based, saying to the seller “Have you considered a 1031 exchange?” (A 1031 exchange is a way to avoid taxes.)
Following up is just a way to stay top of mind, as it comes at a time when someone may or may not be interested. Anything can change. And if you’re at the forefront of their mind, you’ll be their preferred contact.
3. Not letting the salesperson talk
Sometimes vendors like to wander around; People generally prefer to hear themselves speak. So if you’re constantly cutting them off, it’s not allowing you to make that connection.
Plus, when people wander around, it can be beneficial to you. You are able to get more details about the property which you can avail later during the negotiation. This can help you determine if the person on the other end has a problem that you can help solve.
If there isn’t a problem, then you don’t really have a solution to offer. Then, you can just move on to the next person who has a problem for you to solve, which lets you focus your time back where it’s most worthwhile and you might be able to get a great deal. Can
4. Making It All About Price
If the person knows that the price is all you’re in it for, they’ll understand. Of course, you want to get a good deal on it. But just by talking about price, you won’t be able to build that rapport.
So if you’re having a conversation about property and trying to understand if there’s a problem that needs to be resolved, but you’re constantly pushing, “Okay, how much can you get it for?” But would you like to sell?” Then they’ll leave with someone else.
Connected: How To Build Rapport With Motivated Sellers
Sometimes it’s not really about the price. I was not the highest bidder in terms of the actual offer I provided for the property I am speaking in front of in the above video. But I was able to build that rapport and that relationship with the owner, and then I was able to get the upper hand over all the other bidders.
Actually, just because of building that relationship there were no other bidders. It cut off all the others, even though they had higher offers.
5. Having a Shorter Deal Pipeline
If you have a small pipeline, it means that you don’t have enough leads or owners/salespeople that you are prospecting. So you are just focusing too much time on those which will not give you the most results.
You may have fallen in love with a property the owner is not trying to sell. It sounds desperate when you are trying to negotiate and buy that property. Conversely, if you have a large enough pipeline, it allows you to move on to the next one.
That’s it! Here are the five mistakes you want to avoid. And myself, I still make mistakes, and I’m still learning on my own. And that is why I generally like to share my experience as an entrepreneur/investor and my journey in this industry.
Questions about the tips above? Tips of your own to add?
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Note by BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.
