Today’s entry will help you build rapport, negotiate and most importantly, stay safe!
Even though this is an unemotional business transaction for you, it’s important to remember that it is NOT so simple for them.
You need to assume that every property you approach has the potential to be an emotional minefield that can blow up at any moment. And as the age-old saying goes: “You catch more flies with honey than vinegar.”
For the owner or the renter, you may be one of more than a dozen people that have approached them. If the majority of those interactions were negative, you’ll be met with immediate disdain. That doesn’t have to mean that you’re dead in the water.
There are ways to disarm people and bring the interaction to a positive place. Every conversation can be broken down into the following sections:
- The Greeting
- Exploration & Understanding
- Taking Action
A quick way to cause a breakdown in this entire process is to doubt yourself. Whether this is your first conversation or your millionth, you need to act like it’s your millionth.
It’s surprising how many conversations stop right here. How you approach people with your introduction will make the difference between a good, in-depth conversation and a slammed door.
Leading with a friendly tone and a happy smile is universally a good way to start!
End with this question: “Do you know what’s going on right now?” ** Wait for response ** This final question is very powerful.
It’s open ended and can provide you with a wealth of information. Most importantly, it is your segue into the next stage of the conversation. An important tip here is to stay silent and listen. If you’re doing the bulk of the talking from here, you’re most likely in the process of failing.
Exploration & Understanding:
Your goal is to gather as much information as possible while creating a positive relationship. Depending on who you’re speaking with, you’ll be seeking different information.
Speaking to a renter: When speaking to a renter, there’s five main goals you will want to meet by the time you’re done. If you can hit all five then you’ve hit the jackpot!
That will not be the usual outcome so remember to be satisfied with anything you get. Walking away with some knowledge is better than none. Here are the five questions you need to get answered:
- Can they get you in touch with the owner of the property? Don’t be afraid to bribe people. You could offer them something in return for a successful connection. $20-$50 is a good place to start.
- How much do they pay for rent & when is it due? If they can provide proof, even better!
- Would they be willing to continue living in the property after you purchase it? Offer to allow them to stay without paying a security deposit. It makes them happy and costs you nothing!
- What condition is the property in? This is the common question that people usually despise. I like to ask it like this: “What are 3-5 things I could fix as the new owner to make your life here better?” This flips it to be about them and you will get far better and more specific answers 99% of the time.
- Would they be willing to let you come inside to see the property condition for yourself? Again, referring back to #4, I like to ask them to show me what could be fixed.
Speaking to an owner: Should you find yourself talking to the owner of a property, you’re going to take a different approach to get very similar information. Dealing with the owner has its own unique bonuses and challenges. You will find that there are more paths to take and many decisions to be made in real time on a moment’s notice. Here are four main points you need to evaluate:
- Does this property seem like a good candidate for a pre-auction deal? It’s not possible to do all of your due diligence right then and there. If it’s looking good at a glance, get a contract started to lock up the deal and worry about the rest in stage 2 negotiations. Also, remember that you aren’t negotiating based off of market value. Your starting point should be based on their immediate need.
- Would they be interested in or a good candidate for buying back the property from you after the auction? You can do this as an owner finance scenario or require them to go get a traditional mortgage. The latter being a very rare but possible solution. It’s almost never a good idea to try and keep the former owners as renters so don’t treat that like a viable option.
- Will they allow you to submit an excess proceed claim on their behalf? While you’ve already got them engaged, you should be looking to set yourself up for post auction profits. It’s a natural progression as you explain to them what they should expect during the tax sale process.
- You want to ask them to show you the inside of the property. A good way to do this is to inform them that you would like to sit down to go over all of the “paperwork” with them. This will typically get you in the door.
Believe it or not, getting them to take action has far more to do with you than them. By now, you should have them fully ready and prepared to commit to something. Things can go badly in the blink of an eye if you aren’t ready to proceed. Here are three things you need to do to ensure success:
- Research the property beforehand. You should already be aware of property owner names, approximate market values, rental rates and neighborhood trends. If all of the information you’ve been told is completely new to you, you’re not in a good place to make snap decisions.
- Have ALL of your paperwork in order and in your hands. You can’t seal a deal if you don’t have the proper contracts ready to sign. Giving people time to change their minds or sign with someone else is a HUGE mistake that happens quite frequently.
- Understand what needs to happen and how it happens. If it’s time to put pen to paper and you start to fumble with what contracts to sign or why something is needed and what happens next, people with abandon you. You need to inspire people to have complete confidence in you so that they can have complete confidence in the decision they are making.
If you are inspired by this blog and would like to learn more about how you can partner with our team, then text “AUCTION” to 909.344.5272 and we will be more than happy to discuss all of the possibilities with you!
Hope these tips help and thanks for being part of the TAI Community!