Wholesaling Houses - Talking with Potential Sellers

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1) Talking with Potential Sellers – Getting the Right Information

Once you get on the phone (on exchange emails) with a potential seller, you will want to make sure that you ask the right questions. After all, before you make any sort of investment you will want to get as much relevant information as you can.

This course is all about making sure you get the right information when talking with potential sellers.

Hello, everyone and welcome to myOpenPath session on “Wholesaling Houses”. Today’s subject matter is talking with potential sellers. My name is Jack Bosch. I am co-founder of myOpenPath.com, the largest trending library for real estate investing, online wealth building, and financial independence on the planet.


All right. So with that said, let’s get started. What will you learn today? Today, you will learn the following. You will learn what it takes to gather information. You will learn how to do that. You will learn how to get information when talking to the seller. You will learn what to say and what not to say, and you will learn how to negotiate over the phone. All right. So that’s the main pieces we’re going to talk about right now. As I said, let’s get going.


Module number 1 is gathering the right information when talking to the seller. So when an owner calls, and after you send a piece of direct mail, after you send them a letter, if you sent them a postcard, once you’ve put a door hanger or something on there, or whatever different ways you found that we already talked about to get a hold of those owners that you think are not interested in their properties anymore, when an owner calls you back or perhaps you have a wrap thing around your car and you drive around the neighborhood, somebody picks up the phone and calls you because they have a house they want to sell, then you want to be prepared, very simply. Because this initial call, it’s says right there in the screen, is crucial because you are building, at this point, rapport with the owner and this has a huge impact on whether they decided to do business with you or with the next guy down the road that’s going to call them on that house.


So, therefore, very simple. It’s important to be friendly, professional, confident, ask the right questions, answer their questions correctly. And getting this part right means that you have a good shot of getting the deal done. Let me actually go quickly one side back, just in case you take notes. You can actually take those pieces down. So the key is getting this part right, this means that you have a good shoot at getting the deal. Getting this part wrong, this initial kind of part, without bringing it up again, where you’re not friendly, not professional, not confident, you don’t ask the right question. Guess what? Then it almost guarantees that the deal will not go through and that you’re going to be walking away empty handed.


Here’s the thing. There’s a formula to this. There’s a process to this but you got to make sure that you put that smile on your face. Because if you do this formula totally grungy, too grumpy, and not with the smile on your face, then don’t be surprised that, at the end of the day, you don’t get deals. So here we go. Be friendly and professional starts literally when you pick up the phone. People do business with people they know, like, and trust. It’s been proven again, and again, and again, and again. Right? Just think about it. If you need to call a plumber and you worked with two plumbers before, one was polite, friendly, courteous, professional, clean up after himself, and the other one was pretty rude, S.O.B., and he was like dirty, and both got the job and both charged you the same. Who would you call back again? Of course, you call the guy back who is nice, and professional, and clean, and on time, and all those kind of things.


It’s only logical, it’s only human beings’ normal…the 10 commandments for that matter, right? So here are some pointers to make sure your caller gets the best first impression. Number one, you want to pick up the phone if you can…unless you do a loud volume. If you do a loud volume, then you can have a call center answer for you. But the point is, when somebody calls, somebody should be picking up the phone. If you let it go to some voicemail, the voicemail is not even adjusted to say, “Hey, if you’re calling about this house blah blah blah,” but instead it’s like dogs barking in the background, people and kids screaming, and there’s this random message that’s pre-recorded, it’s going to turn them off. They don’t even know. I mean, would you think that somebody who answers the phone call like that even has the money to buy a house from you if you’re in distress. No! You’d think that guy is broke just as bad as broke as you. Or not as you personally, but if you’re the distressed seller who wants to sell then somebody on the other side…


However, if you have somebody who picks up and says, “Hi, this is Jim Smith or Mary Smith with XYZ Property Buyers. Okay, great. How can I help you?” Then you go to the questions, and you have a smile on your face, things like that, then they’re like, “Oh, wow. These people actually know what they’re doing, and there’s actually a chance they really can help me.” Think about what they’re thinking. So when you pick up the phone, smile before you say hello. And also ask them right away how you can help them. I just did that naturally and that’s what you got to do to.


For times you cannot answer the phone, like after hours or so, again, make sure that the voicemail is friendly, precise, gives a reasonable time frame on when you will call them back. Don’t tell them, “Hey, I don’t know when I got to call back. So just leave a message, I’ll call you back.” Don’t say, “I’ll call you back in the next hour,” when you know you can’t call back in the next hour. So point your voicemail to say, “Hey, somebody, if you’re calling after hour, somebody’s going to call you back the next business day.” Now they have an expectation. They know they called at 6 p.m., they called too late. The next day at 8:00, or 9:00, or 10:00, or 11:00, somebody’s got to call them back. And be prepared with a cheat sheet that allows you to go through the conversation easily. Now those cheat sheets can be used online. There’s virtual tools for those. I’ll show you one in a moment. Or you could even have them literally printed out in front of you in the car. You pull over and you take that phone call when necessary.


So the other thing is, be confident. You can be confident even when you’re just starting out and being a little prepared. They say, sometimes…and I usually am not a big fan of that statement but, in this case, it makes sense. “You fake it ’til you make it.” What I mean by that in this case is, if you don’t know much about real estate yet, if you’re not really prepared about it, that’s the first deal you might do, then you’re almost like peeing your pants, you’re so nervous, don’t let that show. You got to be on the call, saying like, “Yes. Hello! This is Mary Smith. This is Jim Smith. How can I help you? With property buyers, how can I help you? Awesome! Great! Thank you very much for calling. How are you doing today? How can I help you? Okay, great! You’re interested in selling your house? Wonderful. Let me ask you a couple of questions.” And if you’re in the middle of something, say like, “Hey, can I put you on hold for just one moment? I’ll be right back. I just want to make sure I have the property file in front of me,” or so. Now you put them on mute and you get out wherever you are, to a quiet place, and grab that sheet and you unmute them. “Hey, Mr. Smith. Yes, I’m back. So I apologize for that little delay. Let’s get going. Tell me, what’s the property address?” and so on and so forth.


So now, you are going into their conversation. And even if you were in this quiet place, and if you had everything in front of you, and you just freaked out, then it’s just like, “You know what, can I put you just on hold for about 10 seconds? I just need to grab another pen.” You put that on hold. You’re like, “Aahhh, oh my god,” freaking out, whatever it is that you need to do, you collect yourself and you unmute them. It’s like, “Yes. Hello, Mr. Celo. Wonderful. Thank you very much for your patience. So let’s go.” And then we want to cover a few things right now that you define on a cheat sheet that you left to the phone, that you have, or electronically, that you can ask the right questions and also get some Frequently Asked Questions. You’re already prepared in front of you.


So here’s how you call process, call program looks, or our call program actually, that we categorize the questions that we ask. So for example, you ask, if the owner doesn’t have much time, we may only gather the essentials. One of the things you ask the owner, I mean, they called you in the first place, because the best time to talk to a seller is when they call you. So when they call you, they usually have a few minutes. They’re not just calling for 10 seconds. If you have to call them back because you missed their call, now they might be already in their car, on their way to the car, on their way to dinner, on the way to lunch, on the way to…you name it. You’re already in the next call and now they don’t have the time anymore. So therefore, the best way to talk to people is when they are calling you. So chances are, at that point, they have some time. And if they don’t have time, you ask for a convenient time to call them back and ask them the rest of the questions.


But here, if you look at that, this is like, the screen here says, caller, owner of record, accounting information, property information, property liens, value, and so on and so forth. So there’s a few things that we ask the people when we go for that. All right. Here’s a quick overview right there on the screen. So now, the main pieces are really the ownership information, property information, and then lien and value information. That’s basically what we want to ask for.


So the cheat sheet, the script, should contain the following: a very simple, friendly, pre-defined greeting script. Basically, something you can read off every single time until you have it memorized, or whoever takes the phone call until they have it memorized. By having something like that written down, also you can start outsourcing that. So if you want to do more than the deal whenever the deal comes along but instead, you want to do 10 deals a month, chances are you will no longer be able to take every phone call. So in that moment, you want to have something that’s written, that’s scripted out, not just to help you but to help the next person that comes in line and actually asks those questions.


So if you have that script, then we also want to have space for the minimum information you want to get from the caller, which is very simple. You want to get their name. You want to get their phone number right away off the gate just in case you get disconnected. Have you ever called AmEx? AmEx does exactly the same thing. They’re like, “Oh, Mr. Bosch., thank you very much for calling American Express. You are a,” whatever, “customer. Just in case we get disconnected, what phone number are you calling from?” Well, you give them your phone number and then guess what they just did? They just, not only did they…it is useful in case you do get disconnected, but it’s also useful for them to update their records. And you do the same thing, you have their name and the mailing address, but you don’t have their phone number. So now it gives you additional piece of information that you can use to call them back.


Also, you ask them, “Are you the sole owner of the property?” Or if not, “Are there other people on title?” Why would you need that? Because if there’s five people on title and one of them calls you, how in the world do we know if that person even has enough rights to sell the property? How do we know if they all want to sell? Perhaps he’s the only one that wants to sell and he wants to pull a fast one over everyone else. So you want to know, “Are you the sole owner?” “Yes, I am.” “Okay, wonderful, great.” Or, “No, I’m not. I own this with my brother.” “Great. So you’re interested in selling your properties. Are your three brothers also in agreement about selling the property and how are they able to also sign the sale agreement if and when I make you an agreeable offer,” is one of the questions you ask right back. And they’re like, “Yes, my brothers are available. They’re here in town. Just send me the offer. I will have them sign it. Everything is cool.” Or, “No. My brother gave me a power of attorney.” Okay, that is cool, too. Or, “My brothers are…I don’t even know where they live, but they own the property with me.” Now, we already know. We got a problem. And problems mean less money for the seller. So whichever way you turn this, you can make this still happen but you do have to have a solution for it.


Then you ask…and the more information you get, the better it is. Now you ask, “What’s the address of the property?” So here’s the thing. In a housing world, contrary to the land world…in myOpenPath platform, we have several land courses. There’s a lot of discussion about land flipping going on, particularly tax delinquent land flipping. In the land world, properties often don’t have the property addresses. So people go by…we go by the parcel number. The parcel number is cool because it’s always a very accurate number, but the address is also very important piece of information. So the address is just as important in the housing world as a parcel number. As a matter of fact, most owners won’t know the parcel numbers but they will know the address of their property. So if you mail to multiple states, if you’re like a big player or you want to be a big player and you send in three different areas like in Florida, and in Oklahoma, and in Texas, so you send letters to people who don’t want their properties anymore.


Then you want to ask them what state or county the property is located in so that you can find it in your records, whether the property is currently occupied, and if so, by whom. Now, why would you want to ask that? Well, very simple. You want to ask for two reasons. Number one, if the property is vacant, your sale is much faster. And it’s also usually…well, it could be either easier or harder to get into the property. But usually, often, there might be some vandalism and things like that. But if the property is occupied, is often is a little bit in better condition.


And then the other thing is you want to ask, “By whom?” Because if it’s the tenant, you might be obligated to certain tenant laws and tenant things. The tenant just signed a 12-month lease and you want to wholesale that house, it’s going to be a little tougher with a one-year tenant in there. Unless the house is in good condition, you get it sold to a landlord. But if the tenant is month to month, in that case, it’s not that much of a big deal because the moment you have another contract you issue the tenant a 30-day vacate notice. And so that when you wholesale it, the wholesaler can come in and actually go and rehab that place.


All right. Also, how many bedrooms? Now you have to get into the nitty-gritty. What kind of a house is it? Is it a three-bedroom-two? Is it a four-bedroom-two? As a matter of fact, that’s something you probably want to ask very, very quickly upfront before you even ask if they are the sole owners. How many bathrooms does the property have? What’s the condition of the property in? And they’ll answer, “Well, it’s good. It’s fine,” or, “It needs some work,” or something like that. And that’s your opening, then in a minute, to dive into more details about the property.


You ask them why the owner wants to sell. You ask, “Hey, Mr. Owner. Okay. Great. Thank you so much for calling. But why do you want to sell?” And then, you just shut up. You’ll be quite. You’ll closed at front opening of people’s faces. You just put the finger over your lips and just listen because this is now not about you, this is about the seller. The more you listen, number one, the more the seller will like you. The more you listen, number two, the more you will find out about the true motivation of the seller. Because the seller, he’s going to say some things that he probably shouldn’t say, or doesn’t care and he just gonna say things that give you an indication about the motivation level of the seller.


And then you ask the question, in essence, “Okay, Mr. Seller. Great!” After you ask a few more questions about the condition of the property and so on, you’ll ask, and we’ll dive into that in just a moment, you’ll ask, “Well, great! If you pay cash and if I pay cash and can close quickly, what’s the lowest you would sell this property for?” And then he might ask follow-up question, “Well, what is fast?” You tell him, “Well, seven days.” “All right. Any contingencies or things like this?” “No contingencies. Just pure cash. Deal. We come in. We take care of the burden of the property ownership. How much would you need to get? What’s the lowest you could sell? And there, we just pay cash.” And then, again, you’re quiet, and you wait for them to name a number.


So here’s the questions that we ask. For example, we say, first name, last name. We say, is there somebody else in the title? Is the property held in a trust? Things like that. These are additional kind of things you can skip. If you get the feeling the seller doesn’t know a lot about the property, you skip over those. If the seller is detailed and patient, you ask all of those. And then you ask them about their contact information, email, phone number, mailing address, city, state, zip, and so on. You already have a lot of that but you just want to confirm it. Then you want to ask details about the property, like, “Which property address, city, state, zip? How many bedrooms, bathrooms? Who’s in the property? If rented, how much have you rented it for? What’s the size of the house,” and so on. And then also, you ask about the liens, which is, “What are the mortgage liens? Is there mortgage on the property? Great. How much do you still owe?”


Now you might, at this point, you might be wondering is there like, “Jack, why in the world would anyone tell you what they owe in the property?” Here’s the answer, because you confidently ask. That’s very simple why. You confidently ask. That’s all you got to do in many cases. Not everyone is going to tell you. Some people’s gonna like, “Well, it’s not of your business what I owe in the property.” “That’s okay. That’s fair enough. Great.” You can try again. You can say like, “You know what, I mean, the house is in pretty bad condition, as I can understand from what you told me. So, it’s not by far, not worth what it used to be when it was brand new. So I would kind of need to know what you owe on it for me to see if it’s worth for me making an offer on the property.” “In that case, well, let’s say I owe just around a hundred grand on it.”


Now they basically told you roughly what they owe. All right. And then also, back taxes, like, “You have back taxes on the property?” Let them tell you what they think they are, you’re going to verify it anyway. But the loan and mortgage is something you definitely can’t verify upfront without having a written permission from them so you want to kind of take a little bit to see if you can get that. But in most cases you just say, “Okay, Mr. Seller, just a couple more questions. So do you have a mortgage on the property or do you own it free and clear?” “Oh, no. I have a mortgage.” “Okay. How much do you owe?” “Well, I think about $168,000.” Period. You don’t make excuses about it. You don’t make apologies about it. You do not say something like, “Ah, Mr. Seller, I’m so sorry to ask, but you don’t really have to answer, but do you have a mortgage? Do you own this thing free and clear? Do you owe any kind of money?” “Yeah, I have a mortgage on it. Is that okay?” “Would you, I mean, I know this is private information and you don’t have to share, would you mind telling me how much it is? But you don’t have to, right?” Well, half of them are going to say, “Well, if I don’t have to, I’d rather not tell you.”


So now, compared to this. “Hey, Mr. Seller. Great, just a couple more questions. Do you have a mortgage on the property or do you own it free and clear?” “Oh, I got…I still owe some money on it.” “Okay, great. How much do you owe?” “All right. I owe $168,000.” “All right. Thank you very much. And how about back taxes? Do you owe back taxes on it?” “Yeah, I haven’t paid taxes in years because the house was vandalized, there’s a hole in the roof, and things and so on.” “Okay. So do you know by chance how much you owe?” “I don’t know exactly but probably three years’ worth of back taxes, so perhaps five, six grand last time I saw it.” Okay. Period. Done. Wonderful. You saw the difference? One person is like basically, a person that in a hallway walks along the wall, and the other one is the one that occupies the space. Be that person that occupies the space. Be that person that with a smile on their face, but confidently ask these questions and you shall receive answers. All right.


So again, then you go property value, you don’t necessarily ask the seller about that if you don’t want to. That’s fills we have in our software which we call the “Investment Dominator” that allows you to check these things out. And where you can put the assessed value in there, the market value, but that’s something, if you ask them, you ask them like, “So do you think, do you know what the property is worth?” Then they might tell you what they think it’s worth. But ideally if they don’t mention it, they don’t come up with a big number, then it could lead to anchoring.


And anchoring is a concept where you basically, if they think it’s worth, if they pull up their valuation and the valuation set is worth $300,000, then they might want $300,000 for it even though, in reality, after the vandalism, and the way it looks, and perhaps the tenants that lived there, it’s only worth $200,000. So now you got to fight that just because you asked them, so you rather not ask them. Okay. So that’s something you use. But the next steps you do say, “Are there any improvements on the property?” If it’s a piece of land or a farm house, “is there anything else? Is there a cow? Is there a shed? Some mobile home on there? Is there an extra RV hookups? Is there septic tanks?” So things like that that, you can ask about that, too. “How about the fence around the property?” Anything that gives you indications about additional stuff that, at one time, costs money to put their and that’s durable and that you can use.


And then again, here’s the question that we ask is that this house ever been had. So now at this point, you dive a little bit deeper. When you dive a little deeper and you ask the seller, “Okay, great! Thank you very much, Mr. Seller. Just have a few detailed questions if know them, great. If you don’t, let me know about that. Has the house ever had water damage? Have you ever gotten a phone call from the tenants or so or when you lived there yourself, that there was, or have you noticed that there was a leak somewhere, either a pipe leak or roof leak or anything like that?” And he’s like, “Ah, no. We haven’t had anything.” “All right. How long have you owned the property?” When they tell you that, “What do you think the property is worth in the condition that it’s in now?” And that’s one of the key questions. Now that question you do want to ask and then because they might tell you, “Oh, well, I think it’s worth $180,000.” “Okay, great. Now if we can pay cash and close on the date you want, what would be the least that you would be willing to take for the property?”


Now they just told you it’s $180,000. Don’t be surprised if they say one of two things. They either say, “Well, I think it’s worth $180,000. I want $180,000.” Or they say, “Well, I understand it’s $180,000, but I mean, I just need to get out of it. I want to pay my mortgage off,” and they already told you how much it is, $168,000. “And if I got a couple thousand dollars to move, then great. Then, you know, you can buy this thing for $170,000.” And you don’t know if it’s a deal yet but you know that he has a $168,000 mortgage, or if he didn’t tell you what the mortgage is, or if there’s no mortgage, it’s like, “You know, I know it’s $180,000, but I mean, if I can get $100,000 or $150,000 out of it, that would be just fine.” Well, there it is. Write it in. You might even come across people say like, “The property condition is worth $180,000, now how much do you want for the property, $250,000?” “I mean, what? You just told me it’s worth $180,000.” “Yeah, but the area is appreciating. Once it’s fixed up, it’s probably worth $250,000, $300,000, so that’s what I want.” So some people are just crazy on the phone and in that moment you’re like, “Aaahhh, okay. I mean there’s no way I can offer you what you think it’s going to be worth in the future. I cannot even offer what it’s even worth right now. Let’s move on with the conversation. Let’s see if we’re getting anywhere.”


Well, if it’s totally a lost case, you cut it off there and declare that deal a no deal. But depending…but often, they’re not that unreasonable. If it’s in a pretty bad condition, they usually want a little more money than they should be getting but they’re not asking for a million dollars if the property is worth a hundred. If they do, oh, well. So that’s it, like, “Well, great! So is the property listed with a realtor at this time?” “No, it’s not.” “Okay, great!” “Is it?” “It is.” “Okay, good. What’s the name of the agent and the phone number,” because here’s the thing. The moment that it’s listed with an agent, you got to go talk to the agent. If you continue talking to the seller, you can’t continue talking to the seller. But always make sure that the agent knows that you’re talking to the seller. The agent will not want you to talk with the seller, but you can still because the initial contact comes from a contact of the seller. You didn’t even know the property was listed with an agent.


So I always compare that to this. When I find somebody that I’ve built up a relationship over a few phone calls, and now, all of a sudden, they tell me that the property is listed with a realtor, that doesn’t mean I can’t talk to the person I have a relationship with anymore. What it means is that I got to get some more additional property information from the realtor and I got to submit my offer to the realtor. But even that, I can also submit my offer directly to the seller. So what we do when that is the case, we’ll send the offer to both the seller and the agent, just in case the agent violates the law and doesn’t present the offer even though by law he should. So we’re doing that sometimes and then…but in many cases, you got to call the agents and like, “Hey, I just sent a direct mail piece to this property. The owner told me that you represent him. Just wanted to, therefore, the moment he told me that, I wanted to introduce myself. I might be interested in buying the property. Can you tell me a little bit more about it?” And they’ll tell you a little more about it then, too.


All right. So that’s basically what you do. Now these are just questions you ask. How you ask these questions and what you pay attention in these questions is going to be covered in the next module, and how exactly you use these questions to actually get the seller to give in, and to plant seeds in their head that they have to give you a larger discount.


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