Posted by Stacy (AZ) on September 09, 2001 at 22:55:48:
I’ve never seen it broken down into three variables like you’ve posted. I agree. Let your questions be free-form on the phone, as long as you cover the big three:
MOTIVATION!! - - Why does the seller NEED to sell?
URGENCY!! - - How soon does the seller NEED to sell?
FLEXIBILITY!! - - Will the seller consider terms? How much cash does the seller NEED?
Very good, Jim.
Stacy
Got my first call! - Posted by diana
Posted by diana on September 09, 2001 at 09:53:35:
Okay, I did everything to be prepared for this. I’ve read everything I can get my hands on, I’ve spent a year on this sight. Because of this sight, and some wonderful people, I got my feet wet with some multifamily rentals over the summer. I’m really gung ho on L/O (because I have no more ready cash)I think I could do well in this area too.
I’ve went over the script a million times. I know I am ready - then comes the first call to my ad. Talk about choke! I didn’t have my script handy (hell i couldn’t even remember where it was) I fumbled my way through though. Didn’t scare the guy away or anything. I just didn’t ask all the questions I should have. (Of course they all came to me when I hung up the phone!)
I guess my question is. If it looks like its a deal on my end, when do I bring up the L/O? I’m sure he has $$$ on his mind. Fairly motivated. Do you find its better to have your offer written out? Maybe with a sheet of paper listing all the pros of L/O? I know many of you do it differently. I’m leaning toward handing him the offer and running. (just kidding) But that’s how I feel.
I’m afraid of choking again. Guess I’m just venting cause the nerves have got me, but anyone who has some words of wisdom - I’d appreciate them now.
Re: Got my first call! - Posted by Jim Kennedy - Houston, TX
Posted by Jim Kennedy - Houston, TX on September 09, 2001 at 13:24:26:
I use a form that I keep at my desk where the phone is, to keep me on target as far as getting all of the pertinent information. Besides the usual information, (name, address, phone, # of bedrooms & baths, square footage, age, condition, type of construction, status of existing financing, etc.), here are what I consider to be the three most important questions:
MOTIVATION!! - - Why does the seller NEED to sell?
URGENCY!! - - How soon does the seller NEED to sell?
FLEXIBILITY!! - - Will the seller consider terms? How much cash does the seller NEED?
Once you know the answer to those three questions, you’ll know whether or not you have the possibility of structuring a deal that makes sense for both you and the seller.
BTW, these three questions are the same for any type of property. The other questions would vary depending on if it’s a SFR, multi-family, mobile home, commercial, etc.
If the conversation leads me to believe that either a “subject to” or a lease/option might be a viable solution to the seller’s problem, I broach the subject by asking something like “Mr. Seller, would it help if I were to make your house payments for you?”
Here are a couple of articles that I suggest you review: One is Joe Kaiser’s entitled “Get on the Same Page With the Seller”. You can find it at:
http://www.creonline.com/art-149.html
Another is Jim Piper’s article entitled: “How To Handle Telephone Calls”. It’s at:
http://www.creonline.com/mm_37.htm
Hope this helps.
Best of Success!!
Jim Kennedy,
Houston, TX
Re: Got my first call! - Posted by Doug (ON)
Posted by Doug (ON) on September 09, 2001 at 12:33:51:
No big deal. You said you didn’t scare him away right? Well then you just got a little lost, that’s ok. Like Randle said, you can always call back and say that you forgot to ask a couple of important questions.
I like the simple, chit-chatty style, where you just throw out the odd open-ended question and an idea or two and see what you get. On the phone there are a lot of things you can ask that really are not of much importance at this point.
Think about what REALLY matters… Is this person willing to accept payments for a while before getting the property out of their name and getting cashed out (if they have equity)?
If they’re set on cash, have the equity to warrent it, and the house is in good shape, you can always offer them cash at a 15-20% discount and tell them that you’ll have to run it by your investors to see if they’re interested. If they accept that offer, get it under contract (with escape clauses) and market it like crazy to private lenders, maybe you can do a Merle-deal.
Doug
Re: Got my first call! - Posted by Carey_PA
Posted by Carey_PA on September 09, 2001 at 12:10:53:
Diana,
What I did for the first couple of months was have the script that I wanted to use by every phone in my house with a pen and some paper. That way no matter where I was when the phone rang I was prepared.
You should practice with friends again and again and again. After a while, you won’t need your script. I don’t use mine anymore.
I try to figure out what the seller is looking for right then and there on the phone and if they are open to taking payments and don’t need ALL cash right now, then I’ll bring up the l/o right then and there.
Also, as far as this seller, don’t sweat it. You made mistakes on the phone…so what. Trust me, when you meet with him in person you are going to make mistakes too!! But, so what!! Consider this guy your guinea pig so to speak. You are practicing and if by practicing you get a deal then GREAT, but if you don’t get a deal from it, you were able to practice and be more prepared for the next one.
I think you can search the archives or look at the how to aritcles and there should be a Frequently Asked Questions article on L/O’s. You could take this with you when you meet with your sellers and let them read it.
Good luck,
CAREY
Re: Got my first call! - Posted by TRandle
Posted by TRandle on September 09, 2001 at 11:11:02:
Diana,
I’ve been talking to sellers fairly consistently for about 2 and 1/2 years and I still choke occasionally. Granted, sometimes it’s intentional, depending on my mood or an attempt to do a quick prequal due to inventory levels, etc., but frequently it’s not.
I tried various scripts at first and eventually went to a Seller Information Form that just has blanks for the info I want to gather. Now, I usually bounce around the form depending on which direction the conversation is headed, but I still try to gather the essential pieces of information I need.
To me, here’s some of the critical questions:
the loan balance
the monthly payment (and components if I can get it)
interest rate on underlying loan
repairs needed
why they’re selling
what are their plans if they don’t sell
cash needs and why they need it
can they defer some of the cash need
what they think the property is worth
I’m probably forgetting some others, but without gathering the important information, it’s difficult for me to know what type of transaction to offer. If I were going to try and squeeze all my sellers into a L/O box, then I would sit down and write out the “phrasing” for that offer. In my limited experience, the phrasing of the offer can make or break the reaction to it, unless the seller is so motivated they couldn’t care less.
Another option I found that helped early on was to just get general “buy-off” on some concepts and then make the offer in person. It’s much easier to build rapport and trust in person than on the phone. Also, I have called folks back and just told them I forgot some important questions.
Don’t beat yourself up too much. The learning never stops and our skills gradually improve with experience. At least you’re taking action (hopefully, at least semi-informed action) - I didn’t for a very long time.
Hope that helps…