Education is a major part of real estate investing. Educating your sellers will often occur. Wholesaler: Educate Your Seller To Close Deals, here’s how
Education is a major part of real estate investing. Educating your sellers will often occur. Here’s how to close more deals by educating your sellers.
A few months ago, I wrote an article about engaging sellers on the phone. This clearly ties in with educating your seller. I must say that I did not address another component of the conversation. I omitted this component because I wanted newbies to focus on the importance of gathering information from the seller. If you have a handle on gathering information great. The rebuttal to some of the sellers’ responses are critical in structuring your offer.
Sure you know by now, marketing is the source of lead generation. If you are sending post cards, yellow letters, form letters, or some other form of advertisement you must be consistent. After your seller responds to the marketing material, you will have to educate the seller to convert leads to deals.
By spending time on the phone with a seller, you know that your rebuttal is centered around education. Educating the seller on the market and market forces are essential. Many sellers believe they are informed on property values, but they are highly misinformed.
Here are some responses that I hear when speaking to sellers.
Common Seller Responses to Inquiries About Property
- I’m willing to sell if the price is right
- The house down the street sold for “X”
- My house is in excellent condition and does not need any updates
- My friend is a Realtor, and they said they can list my house for “X”
- Zillow says my house is worth “X”
These are some of the typical responses from sellers.
Your strategy is wholesaling, so these responses equal educating your seller. Every seller believe their house can sell retail. This is where you have to be informed about your market. Communicating effectively what is occurring in the market is essential. This is to, include days on market, difference between list price and close price, closing fees, and retail condition.
The Importance of Educating the Seller
It is difficult to educate a seller on the value of their house. You must educate them even if there is no opportunity for a deal. You have to provide some value to the seller. It should be your goal to ensure that you have provided your seller with some value during your conversation.
Michael Quarles exemplified this well. Mike discussed the importance of making sure your seller can communicate with a friend or a neighbor the reason they accepted such a low offer. They need to explain why it was beneficial to them. If you haven’t, you should definitely check out Mike’s BiggerPockets Podcast episode for more information on this topic.
Providing Value to the Seller
By educating your seller, you are informing them that even though you will not be able to purchase the house, you are still willing to help. This can be done by telling them some things that can be done to help them get their desired price. By providing this value, you are leaving the door of opportunity open for follow up.
Follow up is key. I make it a point of emphasis to never discard a lead unless the seller asks not to be contacted anymore. Even for sellers who say they are listing their house on the MLS, it is good to still follow up after 60-90 days to see how the listing is going. This is done because some Realtors are aggressive on the list price, and the seller becomes discouraged as time lapses and after numerous price reductions.
My question to a seller in this instance is, “Did the Realtor give you any explanation of why they believe the house is not selling?” Normally, the answer is “NO.”
This provides additional conversation and rapport building. I have closed a few deals that were expired or cancelled listings because of the follow up, courtesy and consideration, as well as the value add of educating my seller.
What value adds do you provide your sellers? How do you go about educating them about the market?