Newbie real estate investors spend a lot of time running. It's the nature of the beast. There's an air of excitement and exuberance. You get a lead and you want to see that property now. Not now, but right now. The potential seller says to you, "Just drive by and let me know what you can do for me." If you do that, you are definitely still a newbie. No one will have to teach you not to do this. It only takes a few times and you will learn quickly on your own. Such forays are a waste of time and time is money.
The smartest way to run your real estate investing business is to prequalify the leads and do it quickly. If you are marketing correctly, the leads will be coming in. The more leads you have coming in the more quickly you will have to move through the prequalifying process. Do this on the phone before you ever get into your car to look at a property.
List of Prequalifying Questions
Create your own list of prequalifying questions that you want answered. As you ask the questions (on the phone), draw your potential seller into a conversation and listen closely to their comments and answers.
Usually you will begin by asking about the property. That's fine, but a house is a house. What you really need to know is where is their pain. Do they want to sell this property; or do they need to sell this property? You guessed it, the latter is the one you are looking for.
Motivated or Unmotivated?
Always remember - it is not your job as a real estate investor to motivate an unmotivated seller. It is not your job to beg or plead with this person. Your job is to sort out as quickly as possible those who are not motivated to sell.
The more unmotivated sellers you try to deal with, the bigger your discouragement will grow. A newbie real estate investor can only take so much rejection. Soon you will be convinced there are no motivated sellers anywhere to be found and you'll be ready to quit. Of course that is not true. But that is the reason why unmotivated sellers must be removed quickly from your stack of leads.
Discover their Situation
Once you have talked to the potential seller about the house, turn the conversation to their situation. You want to know why they want to sell. You must ask! And once you ask, you must listen. You will hear a wide variety of stories - medical reasons, business failure, divorce, transfers, a death in the family. You will hear it all.
Now that you have pinned down their motivation, move on to other questions such as:
- Do you have a price in mind that you are asking for the property?
- What will you need to make it worth your while to sell the property?
- If someone were to buy your property, how much cash would you need to close quickly? (This question will bring some interesting answers. Sometimes they only want to get out with a little moving money.)
Educate Your Prospects
Realize ahead of time that many sellers expect you to take the time to drive by the property, take the time to research the comps, and then take the time to visit with them personally. This is what realtors do and that's what they have come to expect. You must educate them differently.
They will be surprised that you are not begging for their business. And many who refuse to work with you at first, if you follow up in three to six month, you will find they have moved from wanting to sell to needing to sell. Now they fit your criteria.
Don't throw away that lead information. It pays to be patient; it pays to follow up.
Conclusion
The sooner you learn to prequalify all the leads that come into your real estate investing business, the quicker you will move from wasting time to having a deal. This is one area of doing business that must be learned early and must be learned quickly.
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