Posted by Joseph Turner on May 29, 1999 at 22:26:36:
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HURT 'EM SO’S YOU CAN HELP 'EM - AND IF THEY AIN’T HURT, WHACK 'EM! - Posted by Bill Gatten
Posted by Bill Gatten on May 29, 1999 at 22:11:28:
The following comes from a conversation I had with Brad Crouch at lunch yesterday. He suggested I post it.
At least a half dozen times, I’ve observed as participants on CREO discuss how they tried to make a deal fly, and how it just didn’t work out. In many of these cases, I’ve wanted to yell out? “Hey! It’s your sales technique? that dude you’re dealing with doesn’t know he’s hurt, and therefore doesn’t realize that you can ease his pain?and you didn’t do anything to make him feel that pain!” To paraphrase a quote of Mike Tyson’s: “When the other guy don’t got no pain and I can see I ain’t makin’ no gain, I bite a hunk of his ear off and spit it at him?Hey! That takes his mind off whuppin’ me, don’t it? And if he wants me to be nice, then he has to be nice too, or I’ll bite off somthin’ else!” Well, maybe he didn’t say it exactly that way: and, as a matter of fact, now that I read it back, I think it?s mostly a non sequitur anyway… but I’m sure you get the idea.
THE HURT 'EM AND HELP ‘EM’ PHILOSOPHY.
Think about the easiest sale you ever made. I’m betting the client was in some relative discomfort and perceived your offer or your product to be just what he needed to bail himself out. When you stop to consider it, isn’t it always easiest to make a sale when the client really needs what you are selling and knows it (feels his pain)? Let’s say you opened a parachute shop on Main Street today. How long do you think you’d wait for your first customer? A few days? A week? A month? Well, OK then, let’s now open the same business in the aisle-way of a Lockheed L-1011… with two sputtering, flaming engines… at, say, 32,000 feet… over Tuscaloosa (pain). Now, do you suppose orders for your product would roll in a little faster? And, too, do you think you might be able to raise your prices a tad?maybe even cut back on quality control? Hey, if a chute or two fail to open, whose gonna sue (given the distance to Tuscaloosa from up there and the requisite sudden stop)? And wouldn’t you be able to ask your clients if they might want to Super-Size their order, to include, say, a ripcord and maybe some buckles and straps to hold the darn thing on with?
In the above analogy, bear in mind that it’s not only the “timing” and “location” that stimulated your parachute sales. Those factors helped, of course, but more importantly, it was the “need,” or the perception by the prospects of their own intense “discomfort,” and you or your product’s ability to alleviate it. When they’re hurt and they know it, and you have the cure, you can sell them anything. However?they can see your cure as the greatest thing since monkey glands, but still not buy, due to not being aware their pain. They’ll then obviously balk at any attempt to persuade, no matter what you have to sell.
The solution? Well?quite simply? if they don’t know they’re hurt, then in order to sell them an Aspirin, you have to whack em’ a good one on the forehead with a wooden mallet (figuratively speaking of course). And if one doesn’t do it…whack 'em again!
The idea here is that when a prospective seller doesn’t “feel the pain,” then he can’t recognize any need for whatever medicament you may be able to provide or prescribe? no matter how good it may be. In other words, if OTB’s (Over-the-Barrel sellers) are not aware of the true negative impact that a Foreclosure will have on their credit record and pocket book, they may “walk” on their bank obligation before you have a chance to make your L/O (or PACTrust™) offer. By that stage of the game, they usually don’t care much any more. The rest of their credit is shot anyway; their ego is at an all-time low; the bank account is gasping for breath; the little woman has probably run off with the Culligan Man again; and the guppies are all belly up in brown water. Why should this seller care about your kind and gracious offer to capitalize on his misfortune?
However, what this guy may likely NOT realize is that, absent a timely BK filing, a Mortgage Foreclosure will not only screw up his credit; but that it will also justify 1099 income taxation on all mortgage relief. Such taxation can, in fact, include a whopper of a tax bill for all payment relief, debt relief, administrative costs, refurbishment expense, and any Real Estate Commissions paid by the foreclosing entity. If he doesn’t know about ALL the bad stuff, it might seem appealing and much less trouble to just “let the house go back to the bank” and suffer the credit glitch, rather than considering your seller-assisted financing proposal (L/O, AITD, Land Contract, Equity Share or Land Trust). Therefore, it becomes incumbent upon you as a professional to crack this guy a good one with something rigid, right between the eyebrows every chance you get. In other words, if you want to help him and he’s not hurt? well?you have to hurt him. A Boy Scout trying to help a little old lady across the street, who has no perceived need of being on the other side, is likely to get sucker-punched or whacked on the head with her walking cane, if the out-of-control street sweeper bearing down upon her from behind isn’t brought up at some point.
In your sales approach with an Over-the-Barrel, but reticent owner, you might offer something like, “? but of course it’s true that a Lease Option is a good thing for me: though perhaps even more important, is the fact that it’ll save YOU a tremendous amount of money with respect to that Income Tax Issue.” “Huh? What income tax issue?” “Oh?well?I thought you might know all about that, but my understanding is this?”.
Or how about the guy who asks “Why should I stay on the loan for you, when I could just sell the property and be rid of it?” Here’s another place where the prospect needs a good metaphorical head-butt. Remember, it’s not only your “job,” but also your obligation, to mention how expensive it is to market a property and how all Realtors and buyers are conditioned to demand maximum refurbishment and the lowest purchase price. He also needs to be apprised–this seller–of how ordinary RE commission and Closing costs, when coupled with a low-ball offer, are likely going to run him upward of 20% to 25% of the sale price. And this is not even counting his REFURBISHMENT COSTS. Then when it’s all finally over with he’ll need to be reminded that he’ll still have that pesky Capital Gains issue with which to contend. Taxes are now due on the gain on the money he borrowed five years ago? the money he hasn’t paid any income tax on?YET (unless, of course, he does it your way).
Finally, here’s one from just today. I have a seller who was upset because I expected him to make the final month’s principal and interest payment on the fixer we’re picking up from him on a PACTrust? Sandwich. Principal and Interest are ALWAYS paid in arrears; therefore, to have the loan current when I take possession, my FIRST payment actually becomes his last one, and his responsibility. It?s the Golden Rule: I’m putting up my gold, so I make the rule. I was sure that when he found out I also wanted him to pay for all termite and dry-rot damage, he was going to throw another Hissy Fit. So, instead of just breaking the news to him that he had another $2-3,000 bill ahead of him (on top of his final month’s P&I Payment), I instead told him that I had some bad news that might put the whole deal on hold (instilling pain). I explained that the termite and dry rot problem was worse than we thought: that if the termites weren’t holding hands the whole house would fall down (more pain). At this point, instead of becoming upset, he humbly asked what, if anything, could be done to save the deal (he FELT the pain, my brothahs and sistahs!!). I then had only to suggest that if he’d take care of the termites and the dry rot, which he’d have to do with any other buyer anyway, perhaps we could proceed. He agreed and the work starts on Tuesday. He didn’t have to know that we’d have paid for all of it if we’d had to? to cure our own pain (“He who loves least [or appears to] is ALWAYS in control”).
Hurt 'em and help 'em. If they’re not hurt and you need to help them, in order to help yourself, find a sharp proverbial stick somewhere and poke 'em in the proverbial eye with it (?or maybe tap them on their figurative soft-spot with the business end of a figurative cast iron soup ladle). Just make sure that when you do, you have your proverbial investor’s first-aid bag with you, and that you know where everything is, and how to use it.
Good luck,
Bill
Great post Bill! Keep it up. I usually can’t understand what the hell your saying but that time i got it. - Posted by GINO
Posted by GINO on May 31, 1999 at 13:39:06:
Re: HURT 'EM SO’S YOU CAN HELP 'EM - AND IF THEY AIN’T HURT, WHACK 'EM! - Posted by Laure
Posted by Laure on May 30, 1999 at 20:48:21:
Brutally honest…until it hurts. Yes, I could use some of that ! Although my ex said I already was brutally honest ! LOL that just tickles me !
Laure