How to Effectively Qualify a Seller Lead on the Phone
Your primary aim is to spend the least amount of time possible qualifying seller leads, both researching the lead and talking to them on the phone. Time is mostly wasted by spending more than is necessary when a property doesn’t have sufficient equity and working with unmotivated sellers.
2 Components to Effectively Qualifying a Seller Lead
1) Building Rapport
2) Asking Good Questions
I’m going over “Asking Good Questions” today. Check out the Building Rapport post for more info.
Asking Good Questions : 2 Important Criteria When Qualifying a Seller Lead
1) Equity – Determined by what’s owed, estimated repairs, & ARV.
2) Level of Motivation – Do they “Need” to sell?
Start by asking, “What’s your situation?” - This question can elicit an array of responses full of valuable information (about equity and motivation level) from, “We’re about to lose our house to foreclosure” to “My husband passed away last fall, and I want to downsize” to “I can’t stand my neighbor for another day. I have to get out of here ASAP.”
Listen very carefully and make good notes. This is the information that you will present to them when showing them how your offer suits their needs if you can help them. Write down everything they say!
Base on their response you may also ask, “So, why are you selling exactly?” And, “Is it even important that you sell the property?”
Determining Equity
Ask, “Is there a mortgage on the property?” If no, you have some great deal potential so go put on your creative real estate shoes . If yes, ask “Approximately what is owed on the property?” And, “Is there just one mortgage?” Then ask, “Is the payment on the house current?” Note . . . that I did not ask, “Are YOU current on your payments?” This depersonalizes the problem (if there is one) and increases the chance that the seller will tell you the truth about their situation.
Next question, “What kind of condition would you say the property is in?” What all would have to be done for the property to be in excellent shape?”
Be prepared that seller’s typically grossly underestimate the amount of work that needs to be done to their property. That’s OK though. We are just getting a general idea for qualifying purposes. If you are looking at a tight deal based on what’s owed and what it is worth after repairs, you can disqualify a lead if you find out it needs sufficient work.
As far as the ARV goes, this one is up to you to figure out. My only recommendation is to BE CONSERVATIVE! If you don’t have access to MLS, check out Zillow.
Determining their Motivation Level
Hopefully, when you asked them “What’s your situation?” they gave away some hints as to whether they are motivated or not. If you haven’t asked them already, now is the time to ask, “So, why are you selling exactly?” And, “Is it important that you sell the property?” And, “What would happen if you aren’t able to sell the property?”
At this point in time, if the seller has sufficient equity and is motivated, I will go ahead and set up an appointment to meet with the seller at the property.
If there is plenty of equity but I’m still unsure about their level of motivation, I will say, “I’d like to tell you a little bit about how our company works. We are professional home buyers that invest in real estate full time. We are a business so we would have to make a profit on the house if we were to buy it. Are you OK with us profiting on the house?”
Now What?
You have now successfully qualified a real estate investing seller lead over the phone. When using some of the insights in your communications, I suggest using the questions above word for word. Each is worded very carefully in order to get the best results. Enjoy!
Tags: creative real estate investing, Negotiating, negotiating real estate, real estate investing
Digg it
Save This Page
Subscribe to Must Know Investing
Leave a comment
Facebook
Linked In
Twitter
Technorati
StumbleUpon
Youtube
Patrick Riddle:
Dusty Keefe:
Your site regarding Effectively Qualify a Seller Lead on the Phone : “How to” Real Estate Investing Class looks very interesting to me. I found it doing a search for why invest in real estate.
Hey Patrick, thanks for the forms,In return I will post your Must Know Investing link to my Facebook page. Thanks again and may we both have a prosperous week!!!
Great Tony. Thanks for the info on how you found your way here.
Jim .. you’re welcome. I appreciate you spreading the word. Thanks you!
~ P-Rid