The most successful real estate investors know how to convert leads. Securing deals is often a matter of knowing the seller and delivering what they want. It requires you to be flexible and willing to bend. Over the course of the year, there is at least a handful deals that are gained or lost simply based on how well you negotiate. The best negotiators know that the deals are gained when both parties leave happy. Here are five ways to convert more leads into actual deals.
1. Find the right seller: Time is one of the most important assets you have in business. How you spend it dictates where your business goes. Instead of wasting time with sellers that aren’t serious about selling, find motivated ones to work with. This could mean working with homeowners in distressed situations, such as foreclosure or short sale. It could mean finding landlords that desperately want to move on from their rental property. It could even mean knocking on the door of a property that looks like it hasn’t been touched in months. Whatever your method is, it is important to spend your time with the right sellers. A motivated seller is much easier to work with and will give you an answer much quicker. Conversely, a seller that is just kicking the tires will drag their feet for days and ultimately end up wasting your time. To convert more leads to deals, you need to start with finding the right seller.
2. Find motivation: Once you find a seller that is interested the first thing, you need to do is find out why want to sell. In cases of foreclosure or short sale, the answer may be obvious. However, you still need to ask the question. Motivation is the key for any type of action. Some sellers are motivated strictly to get out of their current situation. Others want to sell, but only for their price. Some are just fed up with the town and want to move just for the sake of moving. Instead of putting on a fancy pitch that you think the seller wants to hear start by asking questions. Find out why they want to sell, in what timeframe and eventually find out what their magic number is. Very few deals will be gained in the initial meeting but you can find out where you stand just by asking these questions. Once you find their motivation everything else you do in the presentation and during negotiation should come back to this.
3. Avoid real estate jargon: Distressed sellers don’t want to be given a fancy pitch. They want to be treated like any other type of traditional seller. The best way to do this is by discussing the deal in layman’s terms. This doesn’t mean you need to dumb it down but you should avoid any investor specific talk. Instead of just jumping into the contract or the property spend some time to find out about the seller. In addition to asking questions about motivation you should get to know the seller. This will serve a few purposes. For starters it will make you look like less of an investing machine and more like a human being. Secondly, this will help you know how to deal with things down the road. If the seller has children they may want to finish out the school year before selling. The more comfortable the seller feels with you the greater chance they will sell to you.
4. Know the property: Before you even enter the property you should know as much as you can about it. Start with the basic information you can obtain through online property searches. From there you should ask your real estate agent for the listing sheet of previous transactions on the property. This may be able to give you some information on the condition. Once you start talking to the property find out as much as possible. Ask questions about every major appliance, the roof, foundation and anything else you feel is relevant. This will give you an idea of the cost of repairs which will directly impact your offer. Knowing the work that needs to be done you can share these figures with the seller. The more that they understand the cost associated with the property and the real value the greater chance they will see things your way.
5. Be straightforward: There is a way to discuss your offer price without being pushy or condescending. You need to strike a balance of what you think is a fair offer while still leaving the seller happy. With every offer you make, you should be ready to justify the amount. Explain the work that is needed and the risks you are taking. If you come across as greedy or sneaky, the seller will see right through this and find someone else to work with. Always be as straightforward as possible about what the process entails and what they stand to get out of it. They may need a day or two for this information to sink in, but they will always appreciate your honestly. If the seller feels you are genuine about helping them and working with them, every step of the way you have a definite advantage.
In most cases it is not what you say to sellers, but how you say it. Everything matters, from the clothes you wear to specific words you use. The more sellers you talk to, the more comfortable you will become. Getting a large volume of leads is important, but it is more important to convert these into deals.