Time is Money – Screen That Real Estate Deal from the First Phone Call

 

Time is money and the quicker you can sort out your deal leads to determine the duds from the deals, the more profitable you will be.

So after doing the work to generate deal leads, usually in the form of a seller call or a Realtor call about a listing, you need to have a quick and easy way to screen the deals, and this starts right on the phone.

Some of you may be generating all online leads, although I think you might be missing out if you don’t take phone calls directly from the sellers.  Others might be utilizing a call service to get the pertinent facts over the phone so you can call them back.

Also by screening over the phone you may be eliminating some deals as some sellers just may not be very forthcoming over the phone but might share more after you build rapport with them face to face.  That said, a truly motivated seller, one that needs to sell the house to you, YESTERDAY, will be very willing to share just about anything you want to know over the phone.  The less motivated, might be motivated on down the road and you might want to let them “cook a bit” and then follow up in a week or two.

So what do you say over the phone to screen?  Well, first you want to build a bit of rapport and ask simple questions:

How did you find out about us, the marketing department alway’s likes us to find out?

Can I have your phone number in case we get disconnected?

What is the address?

Basic details like bedrooms, bathrooms ??

You are just getting them used to answering questions.  If they balk at any of the above, they are probably not that motivated, but I have yet to have anyone fail to answer the above.

If as you move forward you start getting one word answers or they start not wanting to talk, go back to safe ground and asking information that is cut and dried:

Bedrooms, Bathrooms, Square Footage, Area, Neighborhood, Condition and rather than making it Q and A, make it conversational . . .

“Can you tell me a little bit about the house?”  Some times this will get you the rooms of the house run down and other times information about condition or if you are lucky it will get you the story.

Usually they call and want to know how you work.  So you can tell them that you get a bit of information from them over the phone to make sure we are a good solution for them, we do a bit of research and then we come out to the house and make an offer.

Now we get into the information we really need

Question 1.  Ownership

Do you own the house or are you calling for someone else?

You would be surprised to know that people who don’t own houses will call for a child a parent or a friend.  That’s ok, but we need to know why they might be calling for someone else and who will be making the decisions.

If they are calling about an estate house on behalf of the state you want to then ask who all will be in on making the decisions.  If they ask why use my story of us negotiating a contract to purchase a house from one person and then having his sibling who was living in mom’s house scott free refuse to sign anything or move out.

Question 2:  Why Are they Selling

My next thing to find out is why are they selling.  I might asking them “Why are you selling?”  or I might ask “Tell me about the Situation”.  Then shut up and let them talk.

You want to be sure to stay in control of the conversation so you can reel them back in if they get of track.  I have found that the more the seller talks, the better the deal we get, so shut up and let them talk, just direct the conversation with some key conversational questions.

So you want to sell for what you owe?  Roughly how much is that?

You said you were behind on payments, can you tell me what they are?  Does that include real estate taxes and insurance.

You said you had to clean out the house and sell mom’s stuff, how soon did you want to get it sold?

If they don’t go into their story

As I talk to them, I try to find a way to ask several times in several ways why they are selling.  So if I start with What is your Situation, we will come back around to Why are You Selling and eventually get to What will you do if it doesn’t sell.

Question 3:  What if it doesn’t Sell

This question can get you a lot of information on motivation.

They might just live in it and stay for a while.  These are people you might want to set up to follow up in a week or two because they don’t need to sell now.

Or they will just rent it out.  Great, they don’t need the money so ask them what they think it would rent for.  This might be a prime candidate for the seller to finance you in the transaction.

What are you looking to find out if its a deal or a dud?

 Motivation and Situation

So as you talk to the person you are looking to see if they have a compelling reason to sell the property AND a time pressure to do it in the next 60 days or less.  Next do they have a situation that will leave enough equity for you to be able to get a great cash price or a seller who does not need all their equity right now so they could be flexible on the terms.

If they have no motivation, you can usually put them on a call back reminder to check in with them in a week to 10 days, a few months or a year depending on the situation.  We have seen houses that didn’t quite have the motivation sell a week later to someone else for less than we would have paid, but we forgot to follow up and we have had sellers that we thought had already solved their problem call us back 2 years later – SO FOLLOW UP.

If they have an unworkable situation, then there is probably nothing you can do and their is no point in moving forward and spending more time on it, some deals just cant be done.  For example a house that is upside down and the seller can afford the house but doesn’t want to afford it and is scheduled for foreclosure in a few weeks, it’ is very doubtful you can get a deal out of this.  Or a situation where the cost of the repairs to the house or the repairs or taxes or what ever are more than the house is worth, then there is no point moving forward.

Now if they have the situation that will call for a quick sale and if you could get your numbers a really great deal, you might want to go take a look and build some face to face rapport to see if you can then get the motivation where it needs to be.  A good rule of thumb is if it’s free and clear or really high equity go take a look.

And then there is the ever pleasant “I already have an offer”, which I greatly doubt.  If they had such a great offer, why didn’t they take it.  To give you a what if, I had a seller who had a written offer from another investor but the seller had not yet signed it.  This investor had offered $90,000 to close in 60 days.  We went to take a look and offered $75,000 to close in 2 weeks and he took our offer.  Our offer  while less that the other, solved their motivation and situation much faster, so in the seller’s eye’s, our offer was better.

Want more information on screening deals over the phone, come out and see me at the August 11th MAREI meeting where we will be evaluating deals and take a look at the following articles: