Close Deals Like a Pro When Buying Directly From the Home Seller
Closing the deal to a lot of people is the ultimate accomplishment but many folks cant seal the deal. Many of you have heard me talk about reducing your chances of a seller telling you “maybe” when you are buying homes directly from homeowners. What we need to understand is that time is our most important asset. Sellers will steal time away from you by saying “maybe” to your offer when they really mean “no”. Yes’ are fantastic, no’s are ok but maybe’s will drive you crazy. So let’s walk through how to reduce or eliminate the “maybe”.
Stop Taking “Maybe”, “I’ll See”, “I’ll Let You Know”
It all starts with setting the standard upfront. Right after you build some report and before you start talking about the deal you should set a commitment to not say maybe upfront. This goes for you and the seller. I will walk you through two ways to do this.
The first way is often referred to as the report card. The idea is for each of you to put a grade on the possibility of working together. If it is a good fit and you should work together you get an A. There is nothing personal about this; you are grading the idea of working together not grading each other as people. It sounds like this:
You – “Thank you for allowing me to come over and talk to you about your house. Do you mind if I ask you a couple of real quick questions?”
Seller – “Sure, go ahead.”
You –“I will be sharing with you some ideas and some offers to buy your house today. Some of them may sound totally crazy to you. Sometimes when I brainstorm with someone I get a little on the crazy side. If I share anything with you that you absolutely hate are you ok telling me that?”
Seller – “Of course”
You – “Great! That would be like giving me an F if we would grading the likelihood of us working together. On the same hand, I am sure you are ok letting me know if I share an idea that you totally love right?”
Seller – “Yep”
You –“Great! That would be like giving me an A. Now in order for this to work, I too will be grading the likelihood of us working together. You see I really want to buy your house but it needs to work for both of us. As you know I am an investor and I am here to make a profit. You are ok with me making a profit right?”
Seller – “Sure as long as you help me”
You – “OK so we are each going to grade each other at the end of our meeting. I am very busy like I am sure you are so if I get anything other than an A I am going to go ahead and assume it is an F. We both really need to give each other an A or it does not make sense to work together. Does that sound fair?”
Seller – “Sounds a little harsh but I understand what you are saying”
You – “This is really the best way that I have found to respect each other time so I promise to give you the grade at the end of the meeting today. Can I expect the same courtesy from you in return?”
Get Down to the Point
At this point of course they will say yes. Who would ever say no when you ask them for the same courtesy in return? And there you have it. You can modify this however you want. I learned it as a grading system but I don’t use the grades when I do it. I simply say we either love the idea (price/terms) or hate it and it will take us both loving it to work together. Using the last line every single time and if nothing else you need to memorize this “I promise to give you the grade at the end of the meeting today.
Can I expect the same courtesy from you in return?” or like I would say “I promise to let you know if I love the idea of working together or not and I promise to do that at the end of the meeting today. Can I expect the same courtesy from you in return?”. It took me a long time to get comfortable with doing this.
Be Straight Forward
For some reason asking the seller to tell me yes or no was always so hard for me. It is easy now, and sellers are never offended and most often actually respect it. Another much easier way to get a commitment goes like this:
You – “Mr. Seller, we are going to have a conversation today about your house. I have no idea if I want to buy it or not. Because I am an investor I really need to be sure that I make a profit. Are you ok with me making a profit?”
Seller – “Of course, as long as you get me out of my situation”
You – “I will see what I can do. I don’t want to put any pressure on you today. There is no need to sign a contract or anything like that ok?”
Seller – “that sounds good”
You – “Good, I am going to ask a favor though. My time is very important to me so do you mind telling me if I make an offer or share an idea that just will not work for you and would you mind telling me what about my idea did not work?
Seller – “sure, I can do that”
Sounds simple and is much easier right? Yes, and it won’t be as effective as the first but it will be effective. The advantage to this one is when you actually make your offer if they say no you can remind them that they promised to tell you why they don’t like it. If you can get them to tell you why you can come up with another offer that may work.
Pay Attention to the Signs
Notice in both examples I am upfront and clear that I am an investor and I need to make a profit. I do this for two reasons. First, they already know you are an investor and that you are going to try to make a profit but with you being upfront about it, it eases them. It makes them feel comfortable that you are not hiding anything. When they are calm the appointment will go much better.
The second reason is I want to be clear that I need a good deal so they are not shocked when I actually make my offer or start to negotiate. It won’t be a surprise to them that I am offering less than it is worth. I want to be clear that this is not necessary but it will help you get more deals and it will save you a ton of time chasing the maybes. I do this every time I meet with a seller. Go meet with a seller and give it a try. You will be glad you did.