Deals in the newspaper? - Posted by Kevin

Posted by Brent_IL on October 07, 2003 at 11:07:36:

I don?t mind, you can ask anything you wish. I may not answer everything.

?Do you still spend a fair amount of time making outbound calls??

  • Essentially none, but I probably should start doing some outbound calls. My offer presentation is so cut-and-dry that I could use some practice interacting extemporaneously with the seller.

?What percentage of your business comes from this activity??

  • None.

?When I was a re-la-tor, I used to make a lot of calls. Got kind of tired of it, but it was effective.
Just for kicks, I made a few calls a month ago, and found that 3 out of 8 had just rented their homes instead of selling.

Hmmm…

The key, I believe, is consistency.?

  • I believe that you?re right. Oh well, maybe next month you can catch three others before they rent them out.

One of the difficulties encountered is that the calls the sellers receive from inexperienced investors and REALTORS® wanting to list tend to put them off. On the other hand, if they do talk with us, they may have an urgency to sell.

?What I’m thinking of doing is a front-end call to gauge motivation and “test” if there’s a possible deal… then maybe put them on a postcard campaign, so the next time we speak they’re the ones making the call. First-call closes, IME, are rare.?

  • The sellers have placed themselves on the prospect list by placing their ad, so it probably wouldn?t be a bad idea to stay in touch with them. It?s sort of the same concept as continually remailing a good list. Like any other advertising, we have to hit them when they?re ready to take action.

Deals in the newspaper? - Posted by Kevin

Posted by Kevin on October 06, 2003 at 12:23:56:

Can anyone tell me if they have a good success rate finding deals in the newspaper? I find tons of ads saying things like “foreclosure,” “motivated seller,” or “estate sale” and all they ever seem to turn out to be is another investor who already bought the house in foreclosure or whatever and is just trying to flip it for near fmv. Also, I see ads with stats like buy for $x, $y repairs, sell for $z… and the numbers usually look pretty fantastic. I hear that usually these numbers are really optimistic and sometimes even just bogus… should I even bother calling these people? Yes, I know I could research all the facts but why bother if chances are it’s a waste of my time?
Anyway, I’m starting to wonder if I should even bother with the paper. Maybe I’d be better off just relying on advertising and trying to farm neighborhoods. What works best for all of you out there?

Re: Deals in the newspaper? - Posted by Nick O

Posted by Nick O on October 06, 2003 at 20:38:53:

Kevin you may have better success if you let your ads age. If you call on one of those ads that are 2-3 wks old than even the investor tends to become “motivated”. I also agree with keeping a log of your calls by phone # that way you don’t call back bad “deals”. Good luck!
Nick O

Re: Deals in the newspaper? - Posted by Brent_IL

Posted by Brent_IL on October 06, 2003 at 19:26:15:

The advantage of using the telephone is that it allows you to screen leads quickly. The purpose of the initial call is to eliminate callers and/or properties that do not meet your buying profile. Load eliminating questions into the front of the conversation, so you can cut it short, when necessary. You only need a few.

Over 20 years ago, I learned from Ray Como to organize callbacks by phone number. Investors might change the form of their ads, but they won?t change their number. Once you know that the phone number belongs to a retailer, don?t bother calling back.

Re: Deals in the newspaper? - Posted by KEN

Posted by KEN on October 06, 2003 at 16:57:23:

I am finding the same thing here to be the case I live in a small town, and the newspaper is full of investor sales, and void of motivated don’t wanters. Hang in there.

An interesting twist on Newspaper Deals - Posted by Ernest the Home Buyer

Posted by Ernest the Home Buyer on October 08, 2003 at 03:13:13:

I am testing out a rather interesting twist on all of this. The strategy was borrowed from Joe Kaiser’s ‘hoping they aren’t home’ how-to article as well as Finkle and Conti’s aged ads theory.

I use Voice Broadcasting to contact people that advertise in newspapers and on FSBO sites. I have built software that helps me find, sort and categorize phone number lists.

My message is simple: Call my 24 hour recorded message. From there the person can determine if they want to talk to me further.

The broadcast service I use allows me to deliver two messages: One that is delivered to machines and one that is delivered Live. The Live message is setup so that the listener can transfer directly to my hotline service and to opt out of further calls.

I’m still testing. But so far my results TOTALLY surpass what I got with postcards and display ads. In the last 4 weeks I’ve averaged: 336 dials and 16 messages on my hotline at a cost of a fraction of getting the same response from a postcards. Remember: These are people who left a message after listening to the message. I’ve found my leave message rate to be about 15 to 20% of those who call.

This SURE beats spending $400 on postcards and only getting one or two responses and one followup message that isn’t really motivated.

My only concern now is the National Do Not Call Registry. Yes, I know that I’m not selling anything…only looking to buy. Furthermore, I’m contacting people who should want to be called on their ad. However, some people may get annoyed since they may have already sold their property before getting my message. (I call 10-12 week old for sale ads.)

Any thoughts?

Re: Deals in the newspaper? - Posted by Kevin Hamilton

Posted by Kevin Hamilton on October 06, 2003 at 20:36:56:

Hey, thanks Brent. What do you mean by “using the telephone”? I am assuming you mean advertising and taking calls as opposed to calling “for sale” ads-- is that correct?

Also could you elaborate a little about how you organize your callbacks, if possible?

Thanks again for your time, I really appreciate it.

Re: An interesting twist on Newspaper Deals - Posted by Brent_IL

Posted by Brent_IL on October 08, 2003 at 21:26:10:

I can?t add anything helpful, but your results sure are intriguing. I wonder about the affect of aging on the returns. It would be interesting to try it out on new leads, too.

I would think you could make an argument that advertisers are soliciting calls regarding the sale of their property. You have no way of knowing the average number of days to contract of a FSBO. It’s probably longer than the days on market of listed sales. I think you will have to be diligent about pulling the numbers of folks that have asked not to be contacted who may have more than one ad in the paper.

Re: An interesting twist on Newspaper Deals - Posted by Tom PA

Posted by Tom PA on October 08, 2003 at 14:27:40:

Any deals come out of it yet?

Re: Deals in the newspaper? - Posted by Brent_IL

Posted by Brent_IL on October 07, 2003 at 01:18:37:

I?m sorry I didn?t state what I meant more clearly. I was referring to calling ads in the newspapers.

Strictly on the basis of the ratio of calls to deals, it?s more effective to advertise and have sellers call you. Many of the ones who go to the trouble to call will be ready to deal.

Calling ?For Sale? advertisements in the newspaper is an activity similar to the ?Look and track 100 houses through the sale and you?ll be an expert? rule popularized by Bill Green. When you talk to sellers over the phone you don?t have to give them your correct name or the right telephone number if you don?t want to, but you can stay sharp witted, practice handling objections, test different phrasing, and make lowball offers. Even when doing so, you can still look for the needle in the haystack, the motivated seller.

?Motivated Seller? is a poorly defined term because anyone who would thoughtfully consider the sale of their property is motivated to sell. Rehabbers will listen for vocal signals that the property is available inexpensively enough to warrant a rehab. I look for signs that the seller will continue to participate in some fashion after the closing. Foreclosure buyers will try to find out what it will take to bring the financing current. The questions you ask should direct the conversation to the areas that are most important to you. The color of the house can wait.

Earlier today I glanced at the posts on the Mobile Homes board. I don?t frequent the forum, but when I do get over there, I make it a point to read the posts of Dr. Craig Whisler. These are two excerpts from a reply he gave.

?There are two kinds of motivated sellers…one is ‘motivated’ to dump his problems on you and the other is ‘motivated’ to give you a good deal.?

?You need to learn to distinguish between the putative motivated seller and the true motivated seller. The first one really isn’t motivated at all. They are just distressed and shocked to find themselves hanging upside down from the flagpole in front of their bank.?

This is what you are trying to determine when you are calling newspaper advertisements, if the seller has what it takes to come to a mutual understanding with you. If they do not, churn ?em and burn ?em.

Ray Como?s suggestion was to keep a record of calls on which you collected information, and to index them by the last four digits of the telephone number

For example, if you called the numbers following, and the seller started to talk with you, you would index the information given and your impressions in this way.

312 987 6543
654 3210
630 741 2589
369 8521
847 895 6932

The info records are divided into area codes first. The 312 area code contains two records, 6543 and 3210. The 630 category also has two records, 2589 and 8521. Area code 847 has only one record, 6932.

I use a call sheet when I talk with sellers regardless of who calls first. When the seller starts to give information, I write the last four numbers of the telephone number in the top corner. This is the record I preserve if we don?t agree to meet. After a while, all the real estate ads seem alike. Before I make a call, I?ll look for that number in the file. If I find it, then I have to decide whether to call again or let it age for a few weeks. This makes it easy to observe time on the market, follow any price reductions, and track investors trying to flip retail. Some real estate agents don?t disclose their agency affiliation in all ads, but you will know them by their four-digit number.

Re: An interesting twist on Newspaper Deals - Posted by Tom PA

Posted by Tom PA on October 09, 2003 at 06:36:15:

I don’t think that the new Telemarketing Rules would really apply here. However, there are some other rules that apply to Automated Dialing Equipment. I still think that he is OK since he is replying to advertisements and not randomly or sequentially generating numbers to call.

Re: Deals in the newspaper? - Posted by rm

Posted by rm on October 07, 2003 at 09:04:11:

If you don’t mind my asking…

Do you still spend a fair amount of time making outbound calls?

What percentage of your business comes from this activity?

When I was a re-la-tor, I used to make a lot of calls. Got kind of tired of it, but it was effective.

Just for kicks, I made a few calls a month ago, and found that 3 out of 8 had just rented their homes instead of selling.

Hmmm…

The key, I believe, is consistency.

What I’m thinking of doing is a front-end call to gauge motivation and “test” if there’s a possible deal… then maybe put them on a postcard campaign, so the next time we speak they’re the ones making the call. First-call closes, IME, are rare.

Re: Deals in the newspaper? - Posted by Kevin

Posted by Kevin on October 07, 2003 at 07:17:51:

Thanks for the responses, everyone. I really appreciate it!