By: Tim Randle
When I first started getting active in creative real estate,my skill set at negotiating was very weak. I had done thetelemarketing thing for American Express as a financialplanner and had studied and learned a few techniques.
On the surface one might think that would be a perfecttie-in to talking to sellers about their properties and theirfinancial situation. I can promise you it wasn't.
Yes, I did pick up asking general sales techniques like neverasking close-ended ("yes" or "no" answers) questions. Also,it still works to ask multiple choice assumptive questionslike "Would Tuesday at 6 p.m. or Thursday at 3 p.m. workbetter for you?". The basics were not enough.
When I first began asking sellers what their loan balance was,I may have actually received a number for an answer 50% ofthe time. I had two major obstacles facing me.
First, my belief system was cock-eyed in that having comefrom a financial/accountant type background, I knew without ashadow of a doubt that no one would ever just give me theirhouse and that only a complete fool would tell me the balanceremaining on their loan.
Second, I didn't have a clue as to the right way to ask and I cantell you from experience that it matters greatly.
The first obstacle, belief system, was easily overcome after Imet my first truly motivated seller. Okay, beliefs systems aretrashed and I must be the complete fool because that wasway too easy.
The second obstacle, phraseology/negotiating, is no longeran obstacle, per se, but it is still a skill that I continually try toimprove upon. The two key components, assuming you havealready properly established good rapport, are timing and thephrases you use.
Here are some quick examples of how NOT to ask a seller whatthe loan balance is:
· What do you owe?
· Are you willing to sell it for what you owe?
· How much equity would you say you have?
· etc., etc.
Now, don't get me wrong. If you use these phrases and similarones enough times and with enough confidence, you will beable to get a numerical answer on occasion (as opposed tosome of the not so friendly responses I received early on).
Contrast the above phrases to these:
· How much is left on the loan?
· So, the property's not owned free and clear?
The first set of questions personalizes the issue and attachesthe debt, and thus the problem, with the seller. The secondset of questions creates detachment and since it's no longer"their debt" or "their problem" or "what they owe", it's just simplya number and not a problem to share.
Since I first picked up on this one little tactic, I would estimateI get all the information I want on 99 out of 100 calls with almostno real effort. Granted, it does take time and practice to developdecent phone skills. The ability to naturally create rapport andflow with the call, yet still get the information you want will comewith time. My point is that it's important to begin testing andtracking different approaches. If you do this, you will notice somevery interesting results.
Here's another example when asking about whether or not theseller would consider a carryback (financing it for you). I'dsuggest actually trying this one out just to verify the reality. If Iask a seller something like:
· Would you consider owner finance?
· Would you do a carryback?
· Would you carry paper on this?
What do you think my responses will be? Yes, I know that welike to use our fancy terminology once we've mastered it. I'mprobably as guilty as anyone in that regard. However, whatthe above questions accomplish is forcing the seller into acorner. Either they have to admit they don't understand, andthus appear foolish, or simply say "no". Which do you thinkhappens most often?
Compare the above questions with something like:
· Are you in a position where you could take payments?
· Would it be possible for me to make payments for a whileand pay off your loan later?
These questions almost always lead to a "yes" or a "tell memore" type response. You'll be amazed at the difference.
These are just two quick examples of how the phrases youchoose can affect your results. Take a minute to considerhow many questions you ask and how much information youattempt to extract from a seller in a single call. Knowing whatto say and when to say it will improve your performance morethan you can imagine.
I highly recommend picking up some books and/or takingsome courses on sales and negotiating. Roger Dawson hasgreat materials available on this web site...http://www.texasrealestateclub.com/courses.html#negotiatingand you can visit his site at www.rdawson.com.
I'd also recommend reviewing our recommended book list formaterials on sales and negotiating which can be found here...http://www.texasrealestateclub.com/booklist.html.
Grab some books by Tom Hopkins, Zig Ziglar, and other topsales and negotiators and begin the quest. I firmly believe noother action will make you as much money as fast as developingthese skills and practicing them.
Regardless of your specific approach to your business, theseskills will absolutely be used in every aspect of your life.
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