Need Help with Telephone Skills - Posted by daveh

Real Estate Investing
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Posted by rayrick on April 09, 1999 at 21:01:45:

As is often the case, your statement makes so much sense that it seems almost embarrasingly obvious. I HAVEN’T been asking them, in gentle terms, “so why in the heck did you call?”, but I’m going to start!

I’d like to ask you one more question Jim, if I haven’t totally worn you out by now. What’s your cash bottom line? Just how much DO they need to discount for you to pay them all cash? And what is your typical method of procuring this cash, should they accept your offer (especially in light of your promise of a quick close)? Up to 65% FMV, I figure hard money is available. It’s that 65-80% range that I’m trying to get a handle on. Thanks.

-Ray

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Need Help with Telephone Skills - Posted by daveh

Posted by daveh on April 09, 1999 at 09:43:18:

I need some help with my telephone skills. I’m not scared to call but here’s the problem.

I know my main purpose of the initial call is to find out if the property seller is really motivated and also flexible enough to consider creative options. So I ask questions like “Do you need all your cash now?” or “Would you consider a lease option or land contract?”

At this point many of the sellers naturally ask “What’s a lease option?” or “How does a land contract work?” I want to give them a short, non-technical answer but I know I confuse the heck out of most these people. And we all know the confused mind always says NO. I feel like I step into quick sand to often on these calls.

I would be most grateful for some suggestions from this esteemed group. Do you have any simple motivation questions that won’t require a thesis statement later on?

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Re: Need Help with Telephone Skills - Posted by Alex Gurevich, TX

Posted by Alex Gurevich, TX on April 12, 1999 at 09:59:52:

Dave,
It seems you offer sellers solutions (like “all cash” , or “lease/Option”), as opposed to helping them to discover what they need. Note, I said helping them “to discover”, because in their mind they likely want you to go to a bank, get a loan, have a downpayment, and pay them full asking price. So, you lead them with your questions.

Here is how a conversation may go.

  • “what are trying to accopmlish ?”
    -“Well, we are trying to sell a house”.
  • “Why are you selling ? Are you moving out of area, or building, or something ?”
  • “yeah, we are building another home, and this one needs to be sold before the other one can be bought”
  • "so why do you need to sell this one ? do you need to get cash out of this one to put down on the new house, or do you have other money you could use? "
  • “well, we do have other money, but the lender says, we can’t have 2 loan payments”
  • “when do you need to finish your qualifying ?”
  • “within next 3-4 weeks, or we won’t get the house”
  • “so if I could solve the payment problems and help your loan qualifying process would you be interested in that ?”
  • “Yes, I suppose”
  • “I think I may be able to do this for you; could you work with me on how and when I can pay you your equity ?”
  • “Yeah, we might if we can get our loan approved”
  • “When would be a good time for you and your spouse to get together with me and work out the details ?”

As Rob, FL pointed out, to go through that much of work on a cold call to a FSBO in the newpaper seems like an awful effort,considering a 1-2% or less of conversion rate. You’d benefit from advertising, mail-outs, etc and having sellers call you, and not vice versa.

I, personally, have an answering machine doing further screening for me. The message says, that due to high volume of calls, we can only work with those families and individuals who need “to close the sale in 30 days or sooner”. If that is not the case, the machine politely advises callers to 1)not leave a message, 2)hang up 3) pursue a listing with a realtor, and 4) call us later if listing does not work.

My recorder gets a lot of hang ups, but every time I hear a click, I’m glad I have not wasted my time with unmotivated suspect. Not only time, but think of all the saved frustration of talking to a lot of folks who insist on their price and terms. On the other hand, once in a while I get messages starting with “I need to sell my house immediately…”, or “I need $20K in cash and I’m out…” which usually result in a closing shortly.

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Re: Need Help with Telephone Skills - Posted by Rob FL

Posted by Rob FL on April 09, 1999 at 17:45:56:

I think one of the problems is that you are calling the sellers without any knowledge of their motivation. I don’t go around calling ads out of the paper unless they indicate some motivation or flexibility, period.

Drive by FSBOs are a little harder. If they don’t indicate motivation or flexibility on their yard sign, and the house is not in bad shape, I would consider dropping them a letter in the mail instead of calling.

I like people to call me because the letters I send (and I send at least 50 per mailing) all basically say (1) don’t call unless you are motivated or flexible and (2) leave a message (I don’t want them to call and catch me off guard, I want to call them and be prepared).

On the other hand, if I know they are motivated or flexible either by their advertising or the fact the house is run down or they are in foreclosure or somehting, then I don’t mind being the first to call.

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Re: Need Help with Telephone Skills - Posted by Mark R in KCMO

Posted by Mark R in KCMO on April 09, 1999 at 14:20:45:

Dave,

You are getting excellent advice in all these answers. 2 questions that leads to finding thier motivation are:

1.) Why are you selling

If they tell you about job transfer, divorce etc, you know a little bit but some times this answer is unclear.

2.) How Quickly do you need to move?

This will generate answers like, Oh I’d have to find a nother place to live first, we are going to retire next year, or I’m heading out the door in about 15 minutes I have to report to my new job 1500 miles away.

Hope this helps

Mark R in KCMO

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Re: Need Help with Telephone Skills - Posted by LHoffman

Posted by LHoffman on April 09, 1999 at 11:52:21:

Hey Dave,

I found it hard as hell to describe what a lease option or land contract or yadda, yadda, yadda is over the phone. The main purpose of the telephone is to make an appointment. Believe me I found this out the hard way.

Once sellers would respond to my postcards I sent out. I would call them back find out why they are selling there beautiful house. Which they lived for 20 years. Then I jump right into would you consider doing a lease option, land contract or some type of seller financing. I lost them with all the mumbo-jumbo, they never heard of until now!!!

I tried to sell the Lease Option over the phone… H…e…l…l…o. Not only was I trying to sell them this thing, which they never heard of. I was trying to screen them even more over the phone. I lost them!!!

Now I send out a package explaining the different ways I can by their home. Then if they are in the least bit interested. I make an appointment to see the house. Walk through it, talk to them. Become friends with them.

There are going to be a lot of different ways other investors do thing. I hate cold calling. II know other investors who make cold calls. They love it. I work 50 hrs/week and the real estate gig part time. I’m lucky if I make 1 phone call a night. Now the postcards I can zip out in a few minutes. If they call me back. It means they are some what open to suggestions.

Hope this helps!!!

-LHoffman

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Re: Need Help with Telephone Skills - Posted by JPiper

Posted by JPiper on April 09, 1999 at 11:45:42:

Dave:

You say “I know my main purpose of the initial call is to find out if the property seller is really motivated and also flexible enough to consider creative options. So I ask questions like “Do you need all your cash now?” or “Would you consider a lease option or land contract?””

I would suggest that you take a look at the articles in the “Money Ideas” section of this site. They might give you a few ideas.

But in general, I don’t care for the approach that you’re indicating in the statement above. The first problem is that you need to clearly define the purpose of your call. Is it to screen the seller? Is it to screen AND find out information? Is it to SELL a PARTICULAR type of transaction? Your answer to this question would dictate what type of call you make. But in my case, my purpose is NOT to sell a particular type of transaction. My purpose is to screen, get information, and perhaps make an appointment if the information I get leads me to a conclusion that there is some POSSIBILITY for some type of transaction.

The questions that you give above are called “closed-end questions”. What that means is that the answer to them will be given by a “yes” or a “no”. If you ever want an answer that you don’t particularly want to hear, just ask a close-ended question?..you’re bound to hear it. “Do you need all your cash now?” Answer: “Of course I do Dave H.”

Your second question is more problematical. “Would you consider a lease option or land contract?” Answer: Seller (thinking “What the hell is a lease/option?”) says “No”??or he says “What’s that?” Now notice something. When the seller asks you “What’s that?”, he asking you an open-ended question?.that is, a question that requires a response of much greater detail than a simple yes or no. So now you end up talking trying to explain, why the seller is listening (maybe, or maybe his eyes are rolled back and he’s thinking about how to get you off the phone). When you’re talking, and the seller is listening?..YOU LOSE.

So the point here is that one of the goals of your call should be to get the seller talking about his property, his situation, his loan. You listen. To do this you ask open-ended questions.

What I’m trying to do on a phone call is to recognize circumstances where I can make some type of a deal. I don’t have a preconceived notion as to what that deal is. I going to ask sufficient questions?.open-ended questions?to understand the situation and what I might be able to do with it, if anything.

Personally, I don’t try to explain concepts over the phone, or go into much detail in that regard. If you make enough calls, someone might just jump right in and tell you “Yeah, I want to do a lease option. Matter of fact, how about I give you a 5 year deal, and reduce my price to boot”. But don’t hold your breath. I save explanations of programs for a time when I know all the information, have an idea of what I want to do with the property, have built some rapport with the seller, and have an inkling that what I am proposing might help the seller to accomplish a resolution of his needs.

JPiper

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Re: Need Help with Telephone Skills - Posted by William P Cummins

Posted by William P Cummins on April 09, 1999 at 10:15:20:

I think that asking about the cash needed is enough or possibly, per Carlton Sheets, find out how they will use the money. Use that clue later, if you make an offer, unless you can be part of the supply chain to fulfill their needs. I wouldn’t introduce anything else other than a lease option in the initial phone conversation. That is probably risky enough sounding to make the owner a bit wary of you even if you truly construct a win/win deal, which you always should.

In another business that required a lot of phone contact, my wife and I would fill out forms with things we expected to hear. We had two phone lines, so we would practice with the scripts of questions and forms on the phone. The use of an actual phone connection helped us overcome some of our problems in selling our services. Try to get a friend to work with you on the phone, as rehearsing on the phone works better than just practicing at the kitchen table.

Good luck…

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Re: Need Help with Telephone Skills - Posted by rayrick

Posted by rayrick on April 09, 1999 at 12:13:08:

Hi Jim,
I asked this question the other night in the chat room, but I’m curious to hear your take on it.

Suppose that you determine within the first few minutes, through the use of open ended questions, that the seller is not especially motivated. I’m always at a bit of a loss on how to proceed at that point. Just saying “Okay, thanks for the information, bye” seems a little awkward, when the seller at that point has no idea WHY I’m ending the conversation, that is, they don’t understand at that stage of the call why I’m not interested, because I haven’t told them anything about what I’m looking for. Do you ever doing any gentle probing about whether they might consider something other than an all cash sale at that point, so they have some idea of what you’re after? I’d like to leave the door open for future negotiations by saying something like “Well, keep my number, and if your circumstances change, give me a call” but they probably don’t have any idea what’s wrong with their circumstances RIGHT NOW (since I haven’t blurted out “sorry, you’re just not motivated enough for my tastes!”).

Thanks in advance.

-Ray

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Re: Need Help with Telephone Skills - Posted by JPiper

Posted by JPiper on April 09, 1999 at 13:02:26:

Ray:

My goal with calling on ads/lists is to get down the list to someone who presents the right circumstances for a deal of some type. The more time I take with a phone call, the longer it takes me to get down the list.

Once I’ve determined that someone is not meeting my “deal criteria”, my goal is to get off the phone?.make my next call. There may be someone who IS motivated, and DOES meet my criteria farther down my list, and who RIGHT NOW is about to sell their property. I want to find that person.

It may not be “touchy, feely”, but I’m going to terminate the conversation. I do it different ways, depending on what has already transpired. I might end the conversation by giving them one more chance to say something that interests me. Perhaps “If I paid you all cash, and could close in 2 weeks, what’s the lowest price you would take”. If that isn’t acceptable I move on. “It doesn’t sound like the situation I’m looking for, thanks for your time, have a nice day.”

I’m not trying to track EVERY seller, or create a lasting bond. If their ad is still in the paper, I might end up calling again. And when I realize, or they realize, that we have spoken before, we have a chuckle, and we start the conversation over again, figure out if anything has changed.

Someone has to pass my test to create any type of follow up with me. I will track certain sellers if they said anything of interest to me?.but mostly I’m either interested in pursuing now, or I’m interested in moving down my list. I’m not interested in creating a bond with EVERY seller.

JPiper

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Re: Need Help with Telephone Skills - Posted by leslie dear

Posted by leslie dear on April 11, 1999 at 05:31:21:

i really identify with you on those calling tips. some times i challenge myself to get a number of calls made in an hour. like twenty, it is really much tougher than it sounds. and done politely mind you. of course the clock stops, or you note their a number for a call back if you get a hit. i like calling back. people get to “know” you more from three little calls than one long one, especially if you ask them the best time to call.

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Re: Need Help with Telephone Skills - Posted by rayrick

Posted by rayrick on April 09, 1999 at 13:53:53:

Thanks Jim.
The situation I’m describing is just a bit different in that the leads I’m calling are folks who had enough chutzpa (sp?) to call me back in response to one of the postcards I sent out, a card that specifically says call me if you can be flexible on the terms of the sale or can give me a discount if I pay all cash (though you wouldn’t know it said that based on the calls I get!). So they are not a totally cold lead. This is why I thought there might be some value in maintaining some sort of relationship.

-Ray

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Re: Need Help with Telephone Skills - Posted by Matthew Luke

Posted by Matthew Luke on April 09, 1999 at 13:48:01:

What is your “test”? What “criteria” do you try to meet? What are the proper questions to ask?

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Re: Need Help with Telephone Skills - Posted by JPiper

Posted by JPiper on April 09, 1999 at 16:59:12:

Hi Ray:

Are you going to keep slipping in a few extra details as we go along?? LOL

If I’m getting this correctly you received a response to your card. The card says to call if they are flexible in terms or are willing to discount for cash. Now through some questioning you’ve determined that they aren’t motivated to do either?

I think my question would be “Mr. Smith, just exactly what precipitated your call today on my card? Are you interested in discounting your price for cash? Or are you interested in offering some type of special terms?” If I heard anything other than a positive answer to something in this question, I would terminate the conversation along the lines that I mentioned earlier. “Mr. Smith, it doesn’t sound like right now your property meets my criteria. Thanks for calling, give me a call if there is a change in your situation.”

My view would be that continuing to contact a guy who has told you he’s not flexible in one way or another would be a waste of time. I’d rather spend my time looking for motivation.

JPiper

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Re: Need Help with Telephone Skills - Posted by JPiper

Posted by JPiper on April 09, 1999 at 17:06:38:

Take a look at the articles in Money Ideas section here on the site.

My criteria is sufficient motivation or an existing situation that would indicate a possibility of outstanding terms, or a low cash price.

JPiper