Imagine this: you give a prospective seller a number. You expect seller to negotiate and give you a number in return. However, seller just shrugs things off and never really say much. Which brings us to the million-dollar question: how do you move the conversation forward?
If you are experiencing the same dilemma, you will find this episode of tremendous value. After all, you will not only get expert advice and insights from Tom Krol’s superstar acquisition manager Dan Toback, you’ll also get some priceless clarity and wisdom from Tom himself!
If you want to know the number one secret that can help you become the best wholesaler in your market, consider this episode a must hear. Apart from knowing how to effectively move the conversation forward, you’ll also learn how to effortlessly build rapport and trust—two key things that can make you a total rockstar in your market!
Wholesaling Masterclass – The #1 Secret To Becoming The Best Wholesaler In Your Market With Dan Toback
If you are new, especially if you do not have a question, no problem. If you do, head on over to the forum, MyRhinoTribe.com. Fill out the questionnaire about your question and we will do some research on it and get back to you along these lines. If you can’t make the phone call, we are happy to answer the question and then provide the answer.
We will do that at the end of this episode so that you do not have to read the whole episode. You can speed ahead, fast forward, get to the end of the episode, and read your question answered there if you have a full-time job, you can’t make the call for whatever reason, or you are on a seller appointment. You can either request for us to do that upfront or if we do not see it on the line, we will do that at the end.
For this episode, we had two questions that came in that were related to acquisition managers or speaking with the seller, negotiating, and things like that. I brought in a special guest, which is Daniel Toback, my brother and my acquisition manager. He is the expert in this because he is my acquisition manager and has done millions of dollars in deals. I am excited to have him with us. He is going to get into the two questions that came up that had to do with meeting and negotiating with the seller. Without further ado, Jordan, if you want to help assist Dan on these first two and I will take the rest of the call, that would be great.
The first question that we will take is from Alicia.
Alicia, how are you?
I am good. How are you doing?
I am doing good. We chatted a couple of weeks ago.
We chatted a couple of weeks ago on lead follow-up.
How has that helped you? Any new leads?
It helped a lot. I have a lot of leads. Now I am putting everyone on a schedule so that I am following up with them more frequently as opposed to every month so that I am still fresh in their minds.
That will go a long way to get you on more appointments and signed contracts. That will be fabulous. I know you had a question here but if you wanted to reiterate anything, I did read it already. If you had any other questions besides the one that I went over, feel free to let me know.
It is primarily the question, for now, about negotiating. Sometimes, the seller does not negotiate. They just accept the number that I give them even though I try to be reluctant and say, “I do not know if I could do this, but what if I could do that? Would that work for you or not?” They are like, “I do not know. It sounds low,” but there is no back and forth. I am not giving them my highest offer first. I wanted some feedback on that.
This is referring to the first conversation that you have with the prospect when you first get them on the phone, either from direct mail or cold calling. On that first conversation, my goal is to always get their number. I know one of your questions alluded to, if they do not give one, I know we talked a little bit about that last time. They are looking for a “free report” or free information is what I call it in sales. On that first call, my goal is to get at least a range or a general vicinity of what they want for a price. For example, on the first question, “What do you think the property is worth? You are the expert. You give me the number.”
Normally what I would do is, “I am more than happy to go ahead and give you a pointed offer, but any idea about what a general range that you think the property might be worth?” Another way you could ask is, “I know it is a nice neighborhood. Do you know what other homes you are going for? Have any of your neighbors sold in the last year?” There is various positioning to make it a more comfortable question because a lot of times if they ask for the specific number that you alluded to, sellers can feel a little bit vulnerable. They do not want to give the number. They wanted you to give the free information. You can make it more as we talked about last time, a general range or about the neighbor and if they have sold.
Never try to convince the seller that you’re the right fit for them. Instead, let the seller try to persuade you to buy his house.
Another way you can put it is if you are going to make a face-to-face appointment, “I would love to meet him first. I would love to make it out to the property here in the next day or two. Can you give me some information to contemplate in the next day or two in terms of a price or a goal?” What type of goal you are looking for in terms of the number?” Sometimes that way, once you make the appointment in their mind, you are going to come out anyway so they are opening up to you. They are going to give you more information before you come out. That has worked in the past, but again, the goal of that first conversation is to get a general number or goals of the seller, their timeframe to sell, and the terms they want. If they need 30 days after, if they are not ready to sell right away, you want to know that in that first call.
Most importantly, you want to know, “Mr. And Mrs. Seller, if I can come out in the next day or two or later today and make an attractive offer, are we prepared to do business? Can we do a signed contract?” If you do not want to go out to these appointments or about five appointments in a week and all they want is a contract that they are going to have to try to bid out anyway.
I want to interrupt you because you said something that I think everybody needs to know. I want you to reiterate what you said. It is for everyone’s benefit. Dan has been doing this for a few years and he takes this stuff for granted because he is doing so well. I want you to slow down for one second and repeat what you said to the seller because it is a key sentence that has helped you close. In my opinion, you tell me if I am wrong, but a lot of business and certainly more than the average acquisition manager. Can you review that one more time what you said?
If I am going to go out to an appointment, I want to know that the seller is prepared to do business. I do not want to go to an appointment to give out an offer because that is what everyone else is doing, especially in other businesses too. People are conditions in our environment to get a free appraisal. If you think about it, you can go online for a free appraisal or report. An important question to ask on that very first call is, “If we make an appointment, if I come out in the next day or two, or if I come out 6:00 today or 6:00 tomorrow, Mr. and Mrs. Seller, are you prepared to do business?”
You want to ask them every call, in my opinion. The only exception would be if you have an out-of-state landlord, then you are going to want to do business over the phone. The way I would do it then is you are using a mobile notary. The mobile notary is something for your out-of-state people you want to do every time. I have done DocuSign and those have worked, but the mobile notary has been an absolute game-changer. If you are out-of-state people, you are not going to be seeing them in person, unless the deal was a $200,000 yield, you definitely hop on a Delta flight and go. I would use the mobile notary, set up an appointment with it, and have the mobile notary contact the seller.
The seller knows if all these terms are agreeable. “Could the mobile notary come out at 5:00 PM today to do the contract with you?” That is how I would do it if it was an out-of-state person if that makes sense. Tom, I do not know if that is what you meant by having the commitment over the phone, but that is how I normally do it.
Alicia, I have read your question as well. Do you understand what he is saying here about how negotiating with the seller on the upfront part of the answer that he gave you?
Yeah, that totally makes sense to me. The upfront piece is when I am calling them back or going on an appointment after we have had that discussion to get what their price range is and see if they are flexible in everything. A lot of sellers right now are out-of-state. It is a phone conversation when I am calling them back.
I do not know if I fully understand the question. I want to make sure that we have it right. Describe the scenario exactly that you are in and then what is the question. You have a lead and the call comes in. Do you guys agree on a price over the phone?
Right now, I have a lead. He lives in California and he has a property here in Vegas. It is now vacant because he had a relative that passed away and he is the executor. We had a conversation but he does not know what a good price would be. It is a nice market. If you looked on Zillow, he has got some realtor friends in California who gave him some ideas, but he knows the house.
He has done a lot of work and he is not willing to do it. After we get off the phone, I looked up some information, gave him a callback, and let him know what I think a good price might be to gauge if that was my starting offer. I was expecting and I asked, “Is that too low?” To get an idea of what he was thinking about the numbers and he is like, “It is lower than I expected, but I am not sure.”
Now that I have a little more clarity on what you are asking, I am glad that I took the time to deep dive this with you because this is a great question. Certainly, this is something that you are going to deal with early on and wholesaling and something that you should not be dealing with later on after you have done a handful of deals. I want you to hear your question. You said the word price 3 or 4 times. What you are doing with this strategy is you are making this deal all about price. What I want you to know is I am always reluctant. Let me ask you a question. Will wholesalers ever win on price?
We will never ever win on price. We have to tell people that. I want you to say a number. Say any number that comes to your head. What is the best price that you can do?
No, I can’t do that. Who spoke first? That is how you win the deal right there. Here is what I am going to say to you. Number one most important thing is when you say, “I have this number, is that too low?” I am only telling this out of love and good energy, but it is weak. You have to stand up straight, put your shoulders back, and project your voice. You are the one with money and the boat that is doing well and they are in the boat that is sinking or they are not. If they are not in a sinking boat and there is no one to save, they do not need the coast guard. If they are, they have to know that you are the coast guard. They have to understand that you are there to help them.
When you are taking all of this back and forth with pricing, what you are trying to do is you are trying to find a price that works for where they are instead of focusing the entirety of the conversation on, “How can I help you? Are you sure you even need my help?” There are a lot of people out there to help. There are a lot of houses to buy. You can list it with an agent. You can become a landlord. You could rent this property out. “Why would you even want to sell me this property?” It sounds like you would have some investors with cash. When somebody says to me, “I have some friends who are investors and they were talking to me,” I interrupt them. Why are not they buying the property? “They are just helping me come up with a number.”
“If they are investors, they should buy the property. Are you willing to give them a good deal? I am an investor. I need to get this at a good deal. I can buy it quickly. You do not have to come back to the property. I could send a mobile notary. I can pay all cash. I can close quickly. All of that, but I need a good deal. Are you sure, you want to sell this for a good price?” Whenever you get confused about this, always go back and watch an episode of Pawn Stars. They bring in the grandfather clock. What is the first thing that the guy wants? He wants a price. “What are you going to give me for?” What does the Pawn Star guy do?
He says, “This is a nice clock. Tell me about it.” The seller goes into explaining the clock. “This was my grandfather’s clock. He gave it to my grandmother before he left for World War II. My uncle fixed it. He broke it and it went missing for a few years. My aunt had it. When she passed away, we got it back.” What is the second thing that they do? They build rapport. How do they do that? “That is funny. My grandfather had a clock like this. I remember looking at it when I was a kid and it was so much bigger than me. I had to look up.”
“I used to have a clock that was similar. I heard about a clock like this.” “This clock was made in Switzerland. It is very interesting. Did you know that it has this gem movement?” That is number two. What is number three? Hesitation. What does the Pawn Star guy do? He says, “This is a family heirloom. You should keep this clock.” “Why don’t you keep this clock? Are you sure you want to get rid of this clock?” “Right now, I need the money.” “Why do you need the money? What is going on?” “I have this problem and this problem.” Your job as a wholesaler is to pull the story out of them. The people who walk into a pawn shop, do they know they are in a pawn shop?
You don’t want to be a deal creator. You want to be a deal finder.
Always remember they know that they are in a pawn shop. Do not ever give the impression like, “We will pay you the most money for your house. Will this price work for you?” That is not what we do as wholesalers. What we do as wholesales is we have to get that story out of them. Price is the last thing. It should be almost like a non-issue, which is good. That is why you do not have to be good at sales or negotiating. He says, “Are you sure you want to sell this clock? This is a family heirloom. You should keep it.” They have to convince you. “No, I need the money right now. My daughter moved back from college. She can’t find a job. My wife and I live in a one-bedroom condo. We have to buy a two-bedroom because she has to live with us.”
What do they go back into again? Build rapport again. “That is funny. I have a daughter too. She graduated from college and she can’t find a job either. College costs are so high.” Why am I taking the time, Alicia, to explain all this to you? It is because this is how long we take with the sellers. Rapport then convincing us. This is why Daniel goes to an appointment and they never go with anybody else except for Daniel because this is how Daniel does it. Rapport. Nothing about price. Never try to convince them that we are the right fit for them. Only the seller trying to convince us that we should buy this clock or this house.
“Why do you want to get rid of it?” What do they always ask in the pawn shop? They say, “What are you hoping to do for it?” In a pawn shop, it is a little bit different. Do they want to pawn it for a loan or do they want to sell it? What do they do at the end of closing it? How much time did they spend on price? Three seconds. How do they do the price? Always the same way. They always say, “What were you hoping to get for it?” I love that term. “I do not know, $5,000?” “I can’t do that.” They do not say another word. It is a staring contest of silence.
They immediately reject the first offer no matter what and then they come up with a price. They close a deal and it is done. Daniel could sit here and give you a lot of strategy and insight into it, but the psychology of it is more important than the way you answer seller objections or your negotiating skills. The psychology of it is understanding who you are and then giving them permission to be honest about who they are and how you can help them. Does that make sense?
That makes sense. I am getting lost in the strategy.
What you are trying to do is you do not want to be a deal creator. You want to be a deal finder. The thing is if somebody is not in a situation where they want to sell low, then this conversation will reveal that right away. They will feel super uncomfortable, take the clock, and they will walk right out of the pawn shop. “I do not need cash that bad. I am going to spend a little money fixing up the clock. I will put it on eBay. I will go back and forth with sellers, I will fire questions. I will wait ten day then I will get the highest and best price.”
No problem if it is not a good fit. New wholesalers often are having long, drawn out conversations. Why? Number one, they are afraid of losing the deal, even though it is not a deal. Number two is they are trying to answer with negotiation and sales tactics to try to convince somebody to sell, which ultimately will never work.
You do not want to convince anybody to do anything. You want to find out if they want. The problem or the challenge is a lot of people are embarrassed. They do not want to admit that they need help. They do not want to talk about it. They just want your price and then they want you to leave. It is your job to not do that but lead the conversation. I am telling you, watch that show about the pawn shops.
Any of them are all exactly the same. When the guy comes in, it is the same conversation every single time. There is a whole bunch of other stuff going on in the show, fast forward through all that. Watch those scenes of when someone brings in an item, what is going on, and pay attention. Get your remote control and pause it. After the seller says something say, “How would I respond to this?” Listen to how the guy at behind the counter responds to it. We use a little bit of a different script, but it is almost identical. We are always pulling away the whole time. Why do we do that? It is not a strategy for negotiation.
It is because if you do not, you do not know who is going to follow you. If you are always leaning in the whole time, you do not know who wants to work with you because no one is following you. You will notice you are talking a lot. There is a lot of words happening all the time from the new wholesalers.
If you go into their CRM, you will see pages of notes. Why is that? It is because they are thinking that it is sales and negotiating training, which is good, honest, and wholesome. I love it, but the reality is, if you could, in your belly, understand that most people want full price. Most people do not want to sell and your job is to identify by using these scripts to say, “Who is the people I should be spending my time with?”
When you are spending too much time on price or trying to convince them to do something that is a sure sign that you are playing the wrong game. Always remember you will never win on price. You should write that above your desk. “Wholesaler, I will never, ever win on price. I only win by the service that I provide.”
Thank you. That is awesome. I will write that above my desk so I can always see it.
That is nice, by the way, for me to say that to you because when I was in your shoes and Todd was teaching me, I had to write stuff above my desk that was not as sweet and easy, like the wholesaler never win on price. Mine was much tougher that I had to write down so take that. That is a definite win. When Todd was coaching me, every sentence started with, “You are such an idiot,” and then he would give me advice. He was much tougher as a big brother. I do not want to gloss over your question, but the only concern I had is the way you were asking the question because you are trying to negotiate price when of everything you do, price is the least important.
It is perfect because I hear it, “You will never win on price. Build rapport.” I see the strategy of negotiation but I do not come from sales background. I am like, “How am I going to sell? I can’t.” I do have a background as a nurse. I can see a person more, try to build a rapport, and try to win that way.
The best way to build rapport is always try to find relatable stories by asking questions for more details about their story. The questions that you ask should always be pulling away questions. “This is a nice clock. Tell me about it. Did you buy this house? You look so young. Did you own this house for years? Did you inherit it?” Whenever they start to give you answers, what you will notice is literally they will start to relax. There is no pressure because you do not even want to buy the house. You are not going to give a number like, “I do not even know if I want to buy this house. I am not here to convince anybody.”
The way my brain is working when I am with the seller is like, “I do not know if I want to buy this house. Tell me more about it. What is going on?” If you approach it with an abundance mindset, instead of a scarcity mindset like, “I do not want to say the wrong thing or not enough because I have a deal. I do not want to lose it,” you have to move that to like, “I am totally relaxed. There are tons of houses for sale. I do not care what I say or if I look like an idiot. Tell me more about the house.” If they get angry, be like, “Calm down. Are you sure you want to sell it? I do not have to buy the house.”
It is just a 1% difference, but if you can make that shift to that 1% difference, you won’t need all the sales and negotiating training. I have been married for many years, so it is hard for me to do, but I always relate it back to dating. Could you imagine if new wholesalers were on dates with people? There is so much nervous energy. Nobody would ever go out with you because you would be trying to convince them, “I am so great.” Instead, be super confident like, “There is a lot of people out there. I am meeting new people. What do you do?”
It is imperative that you are the strong, confident person in this scenario that if you can get that, everything else will fall into place and you won’t need all the specialized knowledge. By the way, Tony Robbins’ video on rapport building is in the forum. Bill Rafter is sending me a reminder as I am speaking with you.
The best way to build rapport is to find relatable stories by asking questions and getting more details.
You may want to check that out, but if you can figure that part out about asking questions, getting more details, and then making that relatable to who you are and your life experiences, people like them. If they say, “My wife was a nurse.” That for you is perfect, like, “I am a nurse. It is so funny. We went to the same exact training school. I remember that teacher.” A half an hour on all the personality quirks of that teacher is worth way more value in this deal than getting them to agree on a price.
After the rapport building, are you going to wait the person to bring it up again?
I never sure that I want to buy this house up until the minute that we buy the house at the title company. I am like, “What do you think we should do now?” “We should put it on some paper.” “I have a purchase agreement in my car. We can use that.” I am not sitting at the table licking my lips, waiting for them to sign, like, “I got one.” On my meetings, I always maintain the position. Even at the very tail end of this situation with the seller, I am always maintaining my confident position all the way up until the very last day.
I would suggest doing the same as that. You can lead the conversation with questions. Questions are always the best way to lead the conversation, getting more details from them, having them convincing you. At the tail end, when everything is agreed upon and you are like, “I am not saying I can do this, but what if I could pay $165,000, I could close it in three weeks, and I could pay all cash. I would pay all the closing costs and there were no realtor fees. I am not saying I can do this, but would that work or probably not?” “That would work. What should we do now?” Let them make the suggestion.
One thing that Todd taught me early on was let it be their idea. That was a key piece of advice. Daniel would definitely 1,000% because Daniel was a master of this. He would back me up on this. When you are in the right role and they are convincing you, they are leading the whole conversation. The best way to do this is you should be a nurse on every seller phone call and appointment and not a wholesaler. Forget the word wholesaler. It means nothing.
A wholesaler is not even a person anyway. The art of wholesaling is finding discounted properties. You are a nurse. You are finding out about real estate investing. You can help these people. Bill is giving us advice, which is the key. He is the one telling you this, but the key is you have to have that light. If you can get that mindset on it, it will be so much easier for you. Does that all makes sense?
Everything you said has made lots of sense.
Next time I have an argument with Julie, I will have you come into the conversation. I Will be like, “Alicia said everything I say makes perfect sense.”
I can’t co-sign on that.
That would be smart not to do that. I lose every argument with her. Daniel, is there anything that you want to add to everything that we went over as far as that goes?
That was good, Tom. The one thing that you said that I resonated with too is building those common bonds. Rapports takes you all the way to the closing. I had one example that I wanted to give Alicia. We were on a vacation, my wife and I, in St. Augustine. We were at the beach and my phone rang. I got a lead calling me from the website. It was this guy in our local market. He was motivated. He was not feeling well. He wanted to move near his son up North back to New York. Long story short, at the beginning, we were totally off on price.
He gave me the number. I had to ask him 2 or 3 different times, like, “What do you think the range would be?” I told him, I said, “Tony, you probably should list with an agent. The number is way too high for me to be a player at so you might want to list.” He agreed. He thought we were going to be way too far in price, but then he told me something about having these cluster headaches. I suffered from the same type of sickness. These cluster headaches feel like you are getting stabbed in the eyeball. For about 30 minutes, I was on the phone with this guy named Tony talking about headaches. He did not know how to fix and get rid of them. I gave him my personal doctor, who I use here in Port St. Lucie.
He ended up going to see him. He calls me back a week later and he says, “Dan, you are a lifesaver. He gave me the right type of prescription and treatments. I feel so much better.” We built massive rapport over that one thing, which is the headache. Weeks later coming back to me, he ended up with higher offers with other investors he did not like. I asked him, I said, “You have higher offers. You have better offers on the table that offer the same exact thing. Why are not you interested?” He goes, “That seems sketchy. I do not know if I can trust them. For $15,000 to $20,000 less, I would rather work with somebody that I know truly cares and is going to be out to work with me the right way.”
The bottom line there, Alicia, is the rapport took that whole deal the distance. It was not about the price at all because I was honest with him. I told him it is never going to be the number he was looking at the beginning. He remembered me. We had a relationship. We had rapport. I truly believe that people pay for that rapport and relationship. I hired a personal trainer who is way more expensive than the other quotes that I got from two other trainers, but I am willing to pay more because this guy I have known for years and I know he is good and I am friends with him. Our natural inclination is to pay more for people that we like. That saying goes, “You always work with who you like.”
To Tom’s point, I think that is good advice. Rapport can take you all the way. It is never a numbers issue. Also, use eliminating questions. That would be my only other thing I would add. “Mr. and Mrs. Seller, it sounds like you do not know the price. Have you thought about using a listing agent or paying for an appraisal?” A lot of times, they do not want to pay for an appraisal. They do not want to use the listing agent and wait 3 to 6 months. My only other add there is try to eliminate yourself as an option and you will get the answer you are looking for a lot quicker.
Alicia, good stuff. It is good to hear your voice.
Thank you both.
- Daniel Toback
- Pawn Stars
- Be sure to join the Wholesaling Inc Facebook group
About Tom Krol
As the founder of Wholesaling, Inc., Tom Krol shares his insights and expertise in the field of real estate wholesaling with aspiring wholesalers. He established the business by first selling his belongings to provide a funding source for an effective marketing campaign. Mr. Krol closed his first deal as a result of those efforts has built athriving Real Estate Wholesaling business.
Tom Krol has distinguished himself as an in-demand speaker, author, and coach, as well as the creator of the Wholesaling Inc Podcast, which centers on next level tips, tactics and strategies for aspiring wholesale investors. He has appeared as a guest on more than 10 major real estate podcasts, including Bigger Pockets, Real Estate Investment Mastery (with Joe McCall and Alex Joungblood) and Trevor Mauch’s Investor Carrot Podcast.
In gaining such explosive success in the Real Estate Wholesaling arena so quickly, Tom took his expertise and desire to help others and created the Wholesaling Inc coaching program.
The Wholesaling Inc coaching program has created a tremendous amount of successful Real Estate Wholesaling investors. Many of Tom’s students have generated tens (and some even hundreds) of thousands of dollars in income. The reason why Tom’s program has helped so many people find success in Real Estate Wholesaling is his “Instruction over education” approach.
This solves the “information overload” problem that so many aspiring Real Estate investors face. By handing people a step by step “roadmap” to follow (and giving people specific instructions to follow on a daily basis), his program takes all the guesswork out of the equation and is considered one of the best training programs in the Real Estate industry.
About Cody Hofhine
Cody Hofhine, a multiple Inc 5000 Business Owner. Co Founder of Wholesaling Inc. the #1 Real Estate coaching program across the nation. Co Founder of Joe Homebuyer the leading Real Estate Franchise. A successful Real Estate investor/mentor and sought after Speaker.
Cody has coached over 3 thousand students on how to successfully Build their Real Estate Business through his real estate training as well as help individuals perform at their highest levels with his one-on-one mentoring.
Cody used his background in sales to quickly build multiple 7 and 8 figure Real Estate Businesses that all start on the foundation of clarity or Vision and Purpose.
Cody loves being with his family and doing crazy tricks behind a boat.