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How To Prescreen Potential
Sellers
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hen a potential seller calls you want to be able to quickly determine whether you are dealing with a motivated seller. You can waste a lot of time talking on the phone with sellers who just aren’t going to give you what you need to buy their ho
use.
One of the first things sellers will ask when they call you is something like, “How does your program work?” or “Can you tell me about what you do?”.
Here’s how you reply and the questions you ask to find out if you have a potential deal or not:
1. “Before I get into what I do can I get your first name.
How did you hear about me? (you need to know what advertising is working)
Well, (insert their name), I am a real estate investor who is associated with a group of investors who has been buying and selling millions of dollars worth of properties in Tennessee and various other areas of the country for the past several years. For those people who qualify, we offer a unique opportunity.
The only way I can tell if you and you house would qualify for our assistance is to ask you some questions about your property. If at any time I feel like I can’t help you then I’ll simply tell you so and make any recommendations I can on what you may try next.“
Can I ask you some questions about your property?
OK, before I do that can I get your phone number in case we get cut off?”
2. “What’s the address of the house?”
3. “Is the house listed with a Realtor? If yes: “When does your listing expire?”
You need to know right away if a Realtor is involved so you can decide how to handle this property. If they have a Realtor and their listing isn’t about to expire soon, then you may have to use a strategy where the Realtor gets paid the commission out of your buyer’s option fee. If it about to expire or there is no Realtor, then you are free to use any strategy that fits.
4. “Can you tell me a little about the house”
At this point you don’t need to concern yourself much about the features of the house. There are ways to make money on just about any house. You just need to get a basic idea about what the house is like so you can ask the following question.
5. “How much work would it take to bring the house up to excellent condition?”
You need to know what the seller thinks about the house so you’ll at least have a general idea of what the house needs for repairs. You don’t always get an accurate picture on this one. I’ve had sellers tell me their house didn’t need much at all and when you go there, it looks like a tornado came through.
6. “Are you building another house, or why are you trying to sell it?”
This question usually gets the seller to tell you the real reason for selling. The “building another house” part takes their minds off the “why are you trying to sell it part” so you’ll likely get a more honest answer. You need to really listen to determine if this seller fits as a candidate for a motivated seller. If they don’t fit then you may just want to move quickly to the last question. If they are selling due to financial difficulties, you’ll want to find out if they are behind on payments and by how many.
7. “How much do you owe on the property?”
Most people don’t have any problem giving you this information. Every once in awhile you may get a little resistance. Just tell them you need all the information to be able to make a good offer on the property. If they won’t answer, they aren’t likely motivated anyway.
Along with finding out how much they owe, you want to find out what their payments are, are taxes and insurance included, what their interest rate is, and what type of loan it is. You also want to find out whether they have any home equity loans or second mortgages.
8. “Would you sell the property for what you owe?”
Asking this question right away before you have any idea what the property is worth, or even what the seller is asking, will ease some of the tension this question can create. Some sellers will be offended by your asking the question if they have a lot of equity. If so, then just say something like, “I guess your property is worth a lot more than you owe” and move on to the next question.
9. “If we had an appraiser come out what would he likely show the value of the property to be?”
You need to find out if they had a recent appraisal or a Competitive Market Analysis (CMA) done by a Realtor…or if they are just guessing.
10. “If I paid you all cash and closed quickly what is the least you could take for the property? Is that the best you could do?”
You may not need to ask this question if they owe what the house is worth. Otherwise, if they answer this question you’ll have a good idea where to start your offer price. You would consider this figure the highest you would pay and try to work down from there. In many cases they won’t give you a price and they’ll want you to make an offer. Or they’ll just say “I don’t know.”
If the seller has already told you they need cash now for some reason, then they obviously wouldn’t be receptive to leasing their house to you. But that doesn’t necessarily rule out owner financing. I’ve had sellers refinance the cash out of their house and let me take over their financing.
11. “Well, from what you told me, I don’t yet know if your property is right for my investment purposes. But I know that I won’t be able to make a profit if I have to go out and get new financing to cash out your loan.
However, I have several ways of buying properties such as lease purchasing your house or just taking over existing payments and maintenance until I could refinance your loan at some time in the future.”
These ways probably wouldn’t work for you would they?”
In most situations you’ll want to ask this last question to really gauge how motivated they are. The last sentence that includes “probably wouldn’t” may seem to some like you’re setting yourself up for failure.
This relates to a science called Neuro-Linguistic Programming (NLP), which studies the structure of how humans think and experience the world. NLP uses the term “mismatcher” for a person who looks for the difference in things rather than how they are alike. Mismatchers always look for what is wrong with something you say and then try to contradict it.
Unfortunately, almost everyone becomes mismatchers when dealing with the sale of their most expensive asset: their house. No one wants to make a mistake in selling it. By essentially saying “this probably won’t work for you” a mismatcher would naturally want to say that it would. It also makes you sound a little reluctant so the seller may try to convince you that buying the house is right for you. The first sentence does this too.
Where the call goes from here really depends on the answers the questions above. If the seller says they are open to leaving the financing in place, then you need to go out and see the house and build rapport before you submit your offers. If not, then you may just want to politely tell them you don’t think you can help them and then end the call.
Tim Bruxvoort
Remedy HomeBuyers, LLC
8161 Highway 100, #194
Office: 615-662-4141
Nashville, TN 37221-4213
Fax: 615-301-8609
Web site: www.remedybuyers.com
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