If all sellers were interested in selling from the first contact, the investing business would be a piece of cake. Unfortunately, as most investors know, this is rarely the case. It typically takes multiple times reaching out before a deal is made. If you stop at the first, second or even third attempt, you will often miss out on a deal that is there for the taking. The key to getting any deal is in following up with the seller multiple times until a deal is made, one way or another. In most cases, a distressed seller is going to sell to the most persistent buyer. If you give up before you get an answer, you are missing out on many deals.
Every distressed seller you talk to is an opportunity for a deal. Some sellers and properties may not be a good fit for you and your business, but the opportunity is there if you are willing to pursue it. This starts with the initial contact and getting as much information as possible. On that first call you need to find out their motivation, timeframe and expectations for the sale. You will have a very good idea of what kind of prospective deal you have once those three questions are answered. You cannot expect even the most desperate sellers to sign a contract after speaking with you for ten minutes. After you know what they want to do, the real work begins.
You should have a system in place that will help you in following up. This can be as elaborate as having an app dedicated to following up or something as simple as a notebook with call times and dates. Leaving a message is important, but it is not going to get the job done. Ideally, you will get several ways to contact the seller on the first call so you can email, call home or text on a cell phone. The goal is to get them back on the phone and move the deal closer to contract. While you are content leaving a message, someone else may be meeting at their house or reaching out through social media. If you do leave several messages, you can try mailing a letter with a hand written envelope or leaving a business card in their mailbox. You cannot think that leaving messages is enough. You need to do whatever it takes to find out if they want to move forward or not.
It may not be reasonable to expect an answer from even the second contact either. Most distressed sellers do not want to sell and will spend most of their energy looking for alternatives that will keep them in their property. In some cases, they can find a family member that can help with the mortgage or their lender will accept a loan modification request, but more often than not they will end up spinning their wheels. This process could take several weeks, if not months, before they realize their options are limited. If you give up after a week or two without hearing back, you will never get this seller to work with you. Even if you don’t hear back you don’t know if your messages, letters or emails are having an impact. You never want to be rude or demanding when reaching out, but let them know you are there if they have any questions or need your assistance. If you commit to reach out until you have an answer and do it in the right way, you will find yourself with at least a handful of deals a year you would otherwise not have had.
Not only can following up give you a great chance at a deal, but it will also give you a better idea of the market. Even if you don’t get the deal, you should monitor every deal you want or make an offer on. Doing this will be a learning experience as to what you could have offered or changed to get the deal. If you think about the business with a larger scope, all it takes is a few deals either way to make or break your business. If you can get one extra deal a quarter, that is four extra deals a year. This could have a big impact on your businesses bottom line or give you access to four realtors, attorneys and sellers that you otherwise would not have had. Getting your offer accepted is great, but even if you don’t, you should follow through and see what the property sold for and to whom. This information can help on future deals down the road.
If you can follow up and get a deal months after your first contact, you will gain the admiration and trust of everyone in the transaction. You never know if a realtor or attorney on the selling side will notice your efforts and send the next referral they have your way. Following up is not only important in getting deals, but it is critical in growing your business. Deals will not just fall on your lap. You will have to go out and get them. Oftentimes it takes less than a few minutes to reach out to someone once a week for several weeks. If this is all that is standing in the way of your next deal, it is certainly worth following up.