5 Mistakes Investors Make When Dealing With Sellers
Our team deals with quite a few investors and although they want us to keep an eye out for potential properties to invest in, a lot still try to find properties to buy on their own as well.
Today, let’s go through a few mistakes you, as a real estate investor looking to buy, want to avoid when dealing with sellers.
1. Focusing on a Non-Seller
The first one is focusing too much effort on a seller who is not actually a seller. And this goes back to one of my favorite principles, which is the 80/20 Rule or Pareto principle. You want to spend 80 percent of your time on the 20 percent that will actually be selling.
For example you want to focus on someone whose property is in distress and the owner is actually motivated to sell it. Maybe they just inherited it, or they’ve recently relocated and they’re tired of managing it, or they need the cash to be able to pay some unforeseen expense, or other instances of that nature. Another one would be an owner where there is a timeline to sell for some reason—whether it’s now or within the next couple of months.
2. Using the Same Pitch
The second mistake is following up with the same pitch. In general, an absolute game changer for me and my team when dealing with any client, not just sellers, is to always follow up. But when you are following up, if you’re just constantly using the same message in your call, saying: “Now are you interested in selling? Now are you? Now are you interested?” You will easily be put on their block list and that person will not want to speak to you again.
As anyone on my team will tell you - when you call, there always has to be a good reason for it. And whatever you’re saying or offering has to have value to the seller. So if you’re able to provide useful and helpful information when you contact the seller, that goes so much further.
The follow up is just a way to stay top of mind, because it comes down to timing when someone may or may not be interested. Anything can change. And if you’re at the forefront of their mind, then you’re going to be their go-to contact. And that’s a Win-Win for both of you since the last thing the seller wants is to have to interview agents. However, he/she will have to if they’ve blocked you or stopped talking to you because you’re not offering them anything of value when you call them.
3. Not Letting the Seller Talk
Sometimes sellers like to talk about their homes and all the updates they have done to the house; generally, whether it’s homeowners or buyers like yourself, people love to hear themselves talk. So if you’re constantly cutting them off, that is not allowing you to build any rapport.
Plus, when the sellers talk, it can be beneficial to both of you. You’re able to get more details about the property and their personal situation and they will feel more confident in contacting you if/when it comes time to sell since you already have all the info about them, their house, etc.
It can also help you determine if that person on the other end has a problem you can help solve.
If there is no problem, then there’s really not a solution for you to offer. You can just move on to the next individual who does have a problem for you to solve, which goes back to focusing your time where it’s most worthwhile and where you can be of the most benefit to the seller. Again, the 80/20 Rule.
4. Making It All About Price
If the person knows that price is all that you’re in it for, they will sense that. Of course, you want to get a good deal on it. But by just making it all about price, you’re not able to build that rapport.
So if you’re having conversations about the property and trying to understand if there is a problem to be solved, but you’re constantly hitting on, “OK, what is the price that you would want to sell it for?” then they will end up going with someone else or contacting a real estate agent like me.
A lot of times it’s not really about price. If you’ve built rapport with the seller and have provided helpful, useful information in the past, the seller may give you the first chance to make an offer on the property. In most cases, if you offer a half decent price, the seller may decide to just sell the property to you without seeing what other buyers are willing to offer. By building rapport you may cut out any other potential buyers, even if they may have been prepared to offer more.
5. Having a Small Deal Pipeline
If you have a small pipeline, it means that you don’t have enough leads or owners/sellers that you’re prospecting. So you’re just focusing too much time on ones that will not give you the most results. Once again the 80/20 Rule. This could be where an agent (like me) comes in. We have a much larger pipeline of seller prospects and all you have to do is take our call when we come across a motivated seller with the perfect property for you to invest in (our contact info is at the end of this post if you would like to become one of our VIP Buyer Investors).
Maybe you fell in love with one property but that owner is not trying to sell. It seems desperate when you’re trying to do your negotiations and buy that property. In contrast, if you have a large enough pipeline, then that allows you to just move on to the next one.
That’s it! Those are the five mistakes that you want to avoid. So if you are an investor and have any further questions for me about this very important topic, or would like to become one of our VIP Buyer Investors, please reach out by contacting me at one of the numbers or the email address below.
Thanks for reading today’s BLOG!!!
Brian Kondo
Sales Representative / Team Leader
The Brian Kondo Real Estate Team
Re/Max Hallmark First Group Realty Ltd.
905-683-7800 office
905-426-7484 direct
brian@briankondo.com
www.BrianKondo.com
www.BrianKondoTeam.com
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