Seller Calls: The Art of Building Rapport

Over the years, I’ve talked to thousands and thousands of potential sellers. By trial and error, I‘ve developed an art to mastering the negotiating technique that I’m going to demonstrate with a script for you today.

Keep in mind, when it comes to that first phone call with a motivated seller, you need to control the conversation and achieve these 5 objectives:

  • Build rapport with the seller over the phone.
  • Identify what is motivating the potential seller to sell.
  • Collect information about the property.
  • Set a preliminary price.
  • Make an appointment to see the property.

Okay, are you ready for a little impromptu role playing? (No, not that kind…)

Our Scenario

I sent out my nifty postcards to tons of absentee owners with high amounts of equity. A motivated seller, whom we’ll call “Bud,” received one of my postcards and gave me a call.

The Scene

Cody is sitting in his office when suddenly his cellphone rings.

{RING! RING!}

Cody: Hi, this is Cody, the Clever Investor, how can I help you?

Bud: Hi Cody, I received one of your postcards in the mail so I thought I’d give you a call and see what you could offer me.

C: Great! And with whom am I speaking?

B: My name is Bud… Bud Weiser.

C: Great to hear from you, Bud. What is the best phone number I could reach you at in case we get disconnected?

B: 480-867-5309

C: Bud, I want to pull up your property in our system. What is the address of the property you want to sell us here today?

B: It’s 234 Main Street in Phoenix, AZ 80537.

C: Awesome, thanks. Now, Bud, are you the main decision maker when it comes to this property or is there someone else that needs to be involved in the decision-making process such as a business partner or spouse?

B: I’m the only owner, but my wife will definitely help make the decisions.

C: Okay, great. Is there any way we could get your wife on the phone as well?

B: I don’t think that’s necessary. I can tell her everything tonight when she gets home from work.

C: Okay, no problem. So then can you tell me what’s happening in your life that makes you want to sell your house to us here today?

B: Sure. Well my dad bought me the house when I moved out of college and I lived in it for a while. Then I got married and moved in with my wife. Since then I have rented it out. The first tenant quit paying and I had to evict her, then the next quit paying and left in the middle of the night. It’s been a mess.

C: Wow. I’m sorry to hear that. So what I’m hearing is that you decided landlording is more challenging than it’s worth and that you are thinking about just cashing out. Am I hearing you right?

B: Exactly.

C: Okay, so your dad bought it for you. Is it in your name or his?

B: The house is in my name. He gave it to me as a gift.

C: Wow, what a great gift. But I totally understand why you are tired of making repairs, dealing with difficult tenants and maintaining the property.

{PAUSE}

Okay, so, what I’ve done so far is…

I’ve built rapport in that first phone call by using active listening. When you are actively listening… you address the seller by their name, repeat what they say in your own words and ask engaging questions that result in a “Yes” answer.

Okay, back to the conversation…

C: Okay, Bud. If we were to agree on a fair amount for the property here today, could you wait a month or two for the cash or do you need the cash as fast as possible?

B: Well, I guess that depends on what you are going to offer me. I am kind of sick of fighting with my wife about this. I think I would like to get rid of it quickly.

C: I can tell you’re a smart guy, Bud. I’m sure we can work something out and solve your problem quickly and we can close on any day that you would like. The benefit to working with us is that the price we offer you is the net price. This means that you don’t have to take care of repairs, closing costs, Realtor fees or anything else. We take care of it for you and the price that we agree upon is the amount you get to pocket. Isn’t that great?

B: Yeah, that is.

C: Now let me ask you, Bud, do you have a loan on the property or do you own it free and clear?

B: Hmmm… I don’t think there is any money owed on it. I think my dad bought it with cash.

C: Awesome. Okay, can you tell me a little bit more about the property? How many bedrooms and baths does it have?

B: It is a 3 bedroom house with 2 baths.

C: Cool. Does it have a garage or a pool?

B: No, no garage or pool.

C: Okay, what about the square footage and year it was built?

B: It’s about 1300 square feet. I’m not quite sure about the year, I think it was built in 1995, maybe.

C: That’s okay, Bud, good info. Okay then, I know you’re not a construction expert, but if you had to guesstimate the amount of improvements you would have to make… what would that be? Do you think it needs a light, medium or full makeover?

B: I would say medium. It definitely needs some work.

C: Okay. Let’s pretend you had a big ol’ pile of cash, Bud. What would be the things you fix?

B: Hmmm… Well, the carpet definitely needs to be replaced. It stinks in there and the house is getting older. It definitely needs paint and updated bathrooms… and probably the kitchen too. I replaced the water heater a year ago and the roof tiles, so those are in good condition. The backyard needs some improving, probably because all that’s there is grass.

C: Yeah, I can see why you don’t want to take the time and money to make repairs and hire an agent. My business partner and I are up for any challenges and I’m sure we could come up with a fair price that will let you pocket some money and allow us to earn an honest living. Now, Bud, let me ask you this. Now that you realize that you don’t want to deal with tenants and maintaining an aging property, what is the absolute lowest price you would sell the property to me for if I was to give that cash to you here today?

B: I don’t know. What would you be willing to give me for it?

{PAUSE}

What I am going to do here is refer to a “higher authority.” Referring to a higher authority puts you on the same side of the equation as the seller and makes someone else besides you the bad guy.

Let’s continue…

C: Unfortunately, Bud, while I wish I could give you a cash offer, I’m not actually the one giving the funds for the purchase. My business partner is the one who funds the deals and it’s my job to sort through all the calls and find the ones that create a “win/win” situation. The truth is, if you asked me to give a number, it would be one lower than you want and I don’t want you to hang-up the phone on me. It would really help me if you gave me a starting number, it doesn’t have to be exact and it doesn’t have to be final. Can you just give me a ballpark figure so I can give it to my business partner?

B: Well, my wife and I did talk about it last night, and we agreed that the absolute lowest we could accept on it is $165,000.

{This is when I make a long, drawn-out, mind-blown sigh followed by awkward silence. A little tactic I like to call “The Blow.” You want to do it right out of the gate when they’ve named a price. Like this…}

C: Wheeeeewwwww (astonished sigh) ……………… {Pause for awkward silence.} Well, uh, hmmmm. Now, Bud, are you sure $165,000 is the absolute lowest number you can give me? My partner and I are looking at a lot of properties and, at first glance, $165,000 seems a bit high for the property. From what you are telling me about it, you would like to get rid of it quickly so you don’t have to pay for any more repairs.

B: Yes, definitely done with the landlord thing.

C: Okay, well my partner is defiantly a fair guy, but in order to take this to him, I’m hoping you will be more flexible. If I was willing to go to bat for you, how much would you be willing to take – considering that you don’t have to pay anything like closing costs or Realtor fees?

B: Oh, um, okay. I guess the absolute lowest I could take is $150,000.

C: Okay, thanks for being flexible. At this point, Bud, I think I have enough information to start my research. But first, let me tell you a little bit about the company. My partner and I treat every situation as if we were selling a house to a family member. We don’t use loans; we fund all the deals with our own money. You’re in good hands. Now I just want to set up an appointment to come by the property and shake your hand. I’m going to be in your area tomorrow. Which works better for you, 10:00 am or 1:00 pm?

B: 1 pm should be fine.

C: Great! Now I am just going to start my research, and at 5:00 pm today I’m going to give you a call regarding what I’ve found. Will 5 pm work?

B: Yes, that’s fine.

C: Okay, great. I look forward to talking to you then.

End Scene

And that, my friends, is how it’s done. You lead the conversation and set them up psychologically to sell the property.

Now go close some deals!

Until next time…

Keep it real,

Talk to Me

Do you have a ‘script’ you use to seal a deal? Any tips to help your fellow REIers? We wanna hear about it in the comments section below.