MY SELLER MOTIVATION SCALE & how i make offers - Posted by SteveS(CPA)
Posted by SteveS(CPA) on June 17, 2001 at 19:50:29:
OK Bob when you call you have to immediately take control of the call. If it was me when I call her back I would say, “Hello, my name is, Bob. You called on my ad today. Do you have a property for sale?”
At this point she’ll either say yes or no. If she says, no, she was just wondering about the ad. Then be nice but try to get off the phone as soon as possible.
If she say yes, start asking her about the property. After you find out about the property you then need to find out what her situation is, did she lose her job? is she buying another home? is she on the run from the law?
This is very important because is will give you some indication of her motivation level.
I have a scale that I use as a general rule to determine motivation, this is not scientific, but it’s kinda key words I look for to determine motivation. But remember, not all sellers will tell you the truth and not all sellers will face the fact that they are over their heads, with that said, here’s my scale:
SELLER MOTIVATION SCALE
- Happily married, secure employment, no major changes in financial situation, haven’t really been looking to move somewhere else, mostly wants to see what home will sell for.
If you’re talking to this person. Stop. Unless they are lying, they’re wasting your time.
- Looking at another home, but all other factors from number 10 still apply. At least 80% of real estate deals are in these top two levels.
Even though I have bought homes from this type of seller it?s really an uphill battle. Unless, they really want that other home, you most likely do not have anything to work with.
- Change in financial situation (beginning stages) or change in family.
Some sellers will know when they can?t afford their home either due to unexpected debts or some other unforeseen occurrence. These people are pretty astute. They are astute because they see problems on the horizon and are being proactive to handle them. Because they are not in an emergency situation it will be very hard to motivate them into selling them their house for anything other than cash, because they have time on their side. The same is true if they recently had a child, gotten married or children have moved out.
Investor (don?t wanter)
Their may be times when you come up against an investor who is either retiring or just tired on having the property. If the property is generating a positive income and isn?t to much trouble, you may be able to convince him to sell for something other than all cash, if you can get your accountant in on the deal to show him a plan on how to give him the most money and a tax-savvy plan so the net amount coming to him looks better than if he got all cash in one lump sum. I?m not saying this will work all the time. But if you can up up with a plan that will give him the most bang for his / her buck plus guarantee payments to them without all the management hassles. You may just have a deal.
Divorce (but not forced to sell)
This person just wants to get out of the house for personal and emotional reasons. Sometimes you can stoke the fire by showing them how your deal will help them get on with their life and get away from the property. If you can reinforce how horrible, terrible, and awful it is for them to have to stay even one more day in that house is and how wonderful, beautiful and sweet it will be when they accept your offer and are living a new life will be - you may just have a deal.
But the key is helping them associate how awful living in that house is (which they already have) and how your offer will relieve them of that awful burden. Then you may have a deal.
- Selling due to divorce (must sell), or transferring.
Divorce (must sell) These people may be less emotional about selling the house than someone in the 6 category, but they may still have the same emotions. All these people want is someone to get them their equity out of the house and get the property away from them. If you can structure a deal to do that then you have a deal. If you can?t find another deal.
Transferring - These people are basically looking for the same thing as the divorce must sale people. But the difference is if it?s coming close to the time when they have to be leaving, and buyers aren?t swarming them, then you may be able to show them how you can relieve them of the hassle of having to manage a property out of state and maybe get their equity out in a year or two. They may or may not be as concern with completely getting away from the property like those in a divorce are.
THESE ARE THE PEOPLE WHO YOU WANT TO FOCUS ON AND TARGET LIKE A RADAR!
Job loss - If a person in the home has loss their job and they are finding it hard to find another job and bills are piling up. Then these people should be receptive to at least listening to your offer. If you frame your offer well enough they should see the benefits of getting some cash now and a nice income stream for a few years. Show them how your offer will help them catch their breath, pay up some of their bills and move into a nice place. Even if they say, no in the beginning, wish them luck, but tell them if they ever change their mind your offer will still be good, because you want to help them as much as you can.
Major financial setback - this can come from any number of situations including job loss, medical illness, or death of a spouse. No matter what the reason they are drowning and need your help. The situation becomes even worse if they are upside down in their house or just moved into it within a few years and paid little down payment.
In some cases, they may be in denial and not want to hear your offer. Here I would stress to the extreme how your offer will help them immediately. Show how your offer solves all of their problems and you most likely will have a good chance of getting them on the dotted line. But it?s all in how you frame your offer. If they don?t see, feel and taste how good your offer is you haven?t sold them yet.
Facing foreclosure or eviction
You would think these are the easiest to deal with but in most cases they are the most stubborn, which may be part of the reason they are in foreclosure, but the goal should be the same as above. Show them as much as you can how your offer will solve their problems and free them to live a better and happier life, then you are on your way.
Needs to sells and can?t and open to anything
This should be a slam dunk. But if your delivery is weak then you may mess even this up. Your offer and delivery should be picture perfect. If it is you have a deal. If not, practice.
Now, I know this isn?t the entire list of possible situations that can come up. There are hundreds if not thousands. I also know that every sellers motivation level is going to be different. So this is more my motivation level than theirs.
But if you read this far, you will see that on most I focus more on how you framed the offer, your delivery, and how YOU solved their problems. The reason is, it doesn;t matter how motivated they are, if your delivery is poor than you just won?t make any money.
The best way to delivery your offer is by showing them how they will benefit immediately from your offer today. If they do not see they benefits of your offer, go home, because you?re wasting everyone?s time.
Practice in the mirror making different offers. Write down the benefits from the sellers stand point of your offer. Does it really solve their problems? If not, work on it until it does. If it does practice your delivery and how you’re going to present your offer.
The better you get at that then your seccess should increase greatly.
I hope this helps.