Real Estate Investing Tips and Strategies: How to Combat the Shopper
First off, let’s define “shopper” and make sure we are on the same page.
A shopper is a seller who has contacted every investor in the book to try and get the best offer possible. These people have very little loyalty and aren’t thinking about anything other than what’s in it for me (as if I could blame them). They call every “We Buy Houses” ad in the phone book, the newspaper, on the internet, etc.
BEWARE: A shopper can steal a ton of your time and suck the life right out of you. You spend time researching their property, do a thorough inspection, make them an offer, and . . . nothing. They tell you thanks a lot, maybe I’ll call you after the other five investors have made their offers. You drive home dejected, never to hear from the seller again.
First Line of Defense
The first thing that you can do to combat the shopper is to identify them. This is done by asking the seller a simple question.
“Have you spoken to anyone else about selling your property?”
I ask this question for a couple reasons.
First, I want to make sure that the seller hasn’t already contractually obligated themselves to another investor because we don’t want to step on anyone’s toes. You would be surprised how many times we’ve contracted a property and two weeks later, the seller is signing a contract with another investor. Sometimes they claim ignorance but usually they are just trying to get a better offer. Click here to learn about protecting your real estate deals from contract to close.
Second, I want to know if there is any competition already in the picture. Depending on how the seller answers, you’ll have a pretty good idea if you are dealing with a shopper.
Assimilate Your Battle Plan
Next, you want to gather all the necessary information so that you can position yourself for success.
“Have you received any offers?”
You want to find out if an offer has been made and exactly what that offer was.
If the seller doesn’t want to answer, just tell them, “I don’t mean to be intrusive, it’s just that I don’t want to waste any of your time. I value my time highly as I’m sure you do, and you may already have been offered much more than I could pay you. That makes sense, right?”
Find out what was offered, price and terms, and ask the seller what is most important to them about an offer. You may find out that price is not the number one concern. It could be the time frame or working with a professional company or that it’s an all cash deal. Let the seller tell you.
The #1 Mistake Real Estate Investors Make when Dealing with a Shopper
A shopper’s goal is to collect as many offers as they can. Once you make them an offer, you no longer have a bargaining chip. The seller no longer needs you. Your offer will be used as a baseline for the seller’s future negotiations.
Unless you are one of the last investors that the seller is going to meet with, you have little to no chance of securing the deal.
Winning the Battle
“How many investors do you plan on meeting before making a decision?”
This question will help you gage when to schedule your appointment with the seller. If you find out when you are at the property that the seller is still going to meet with someone else, take your time building rapport with the seller but don’t make your offer yet. Let them know that you will start working up your numbers and will meet back up with them after their last appointment.
Your ability to build massive rapport with the seller throughout this process will aide you greatly in your quest for the deal. You will most likely have the most touches with the seller by communicating with them throughout their shopping process.
By positioning yourself to be around at the end of the battle, you’ve got a fighting chance to win the deal! Good luck and may the best investor win!
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