Today’s special episode is the second installment of a three-part series hosted by no other than brilliant real estate investor and extraordinary coach Todd Toback. For those who don’t know him, he is the founder and CEO of Get It Done House Buyers Inc. and the head of training at No Limits Real Estate Investing.
In the first episode, Todd covered all the key aspects of meeting with a motivated seller and the techniques you can use to make things work to your advantage. In this second installment, he tackled the 5 techniques you should use to negotiate the best possible deal with motivated sellers.
If negotiating is not your strongest point, you’d surely find today’s episode extremely beneficial as Todd generously shared the 5 communication techniques of his No Limits Selling System—the very system he himself uses and teaches to his acquisition managers. It’s safe to assume these techniques have helped him dominate one of the country’s most competitive markets!
Regardless if you’re a new wholesaler looking for your first deal or a seasoned wholesaler looking to find more profitable deals, this episode is for you!
MARCH CONTEST ANNOUNCEMENT!
For the entire month of March, Wholesaling Inc is running a Ratings and Review contest! We’re going to fly out 3 lucky winners to Florida, paying for airfare and hotel, to spend to full days with Tom Krol!
Whether you are trying to land your first deal or scale your existing Wholesaling business, Tom is going to help you crush your obstacles and achieve your goals!
And the lucky winners will all be featured as guests on the Wholesaling Inc Podcast!
To enter, you must Rate and Review the Wholesaling Inc Podcast on iTunes (5 stars please:) and send a screenshot of the Review to Darrin at email@example.com.
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How To Meet, Negotiate With, And Close Motivated Sellers (Part 2 Of 3)
Before we go into this episode, I want to remind you about the contest going for the whole month of March 2020. I want you to ask yourself this question, “What would it do for your wholesaling business/career if you could spend two full days with Tom Krol down in sunny Florida and have him dissect your business plan, your model, and make sure that you are on track to dominate your market?”
For the whole month of March 2020, we are doing special ratings and review contest where we are going to pick three lucky winners to go head down to sunny Florida. We are going to take care of all of your flights and all your accommodations. You are going to simply spend two full days with the man, the myth, the legend, Mr. Tom Krol himself, in sunny Florida.
What do you have to do? Head over to iTunes and rate and review this show, five stars, please. Simply take a screenshot of the review and send it over to Darrin@WholesalingInc.com. If that is not enough, the three of you, by hanging out with Tom and with one another, Tom is also going to put you in the hot seat and have you featured on this show as well. Let’s keep going with this episode.
Welcome to this special edition of the show on speaking with negotiating and closing motivated sellers. This is the second episode in a three-part series on this topic, which is near and dear to my heart. If you have not tuned in to that first episode, go back to Wholesaling Inc to set the stage. If you are a brand new wholesaler and you have never wholesaled a deal or if you are a wholesaler and you want to do more deals and bigger deals, this show is for you.
This business is about three things and three things only. Number one, generating leads. Number two, meeting and closing with motivated sellers. Number three, your exit or your disposition of the property. For any of this to work, you must generate leads. You must pick one marketing strategy and work it like a crazy person. Once you have leads, it is your job to convert. Most people get this wrong. They think that speaking to motivated sellers or they think negotiating with motivated sellers or they think that showing up by the seat of your pants that a deal is going to fall in your lap.
Let me tell you something. The most successful wholesalers in the country, the people who you see on Facebook, Instagram, or whoever else who are telling the truth, who are having those middle 5-figure and 6-figure months, know the art of meeting, speaking with, and negotiating with a motivated seller. That is what this series is all about.
The first episode was very wide. I spoke about meeting with a seller and the technique for doing that. Number two, I am going to focus on the five techniques that you must know to negotiate the best deal possible with a motivated seller. These are the Five Communication Techniques of The No Limits Selling System.
This is the very system that I use to teach my acquisition specialists to do deals in one of the most competitive markets in the country. If you do not know me, my name is Todd Toback and I have wholesaled over 1,000 properties in one of the most competitive markets in Southern California so I know what I am talking about. I have trained more successful wholesalers than any other teacher or guru on the planet. I have taught people who have taught people. I am Tom’s older brother, the Founder of Wholesaling Inc.
My goal for you is to translate this energy, the skill that I have learned, to you so that you could do more deals. You could make more money and add more freedom to your life. If you learn it, it will be a game-changer for your business. If you are struggling with wholesaling and you are generating leads right now, I can tell you that what I am talking about in this episode will change your life, business, income, and trajectory for the future. If you have not checked out the first episode, you can go back after this or check that one first.
The more blunt, transparent, and confident you are, the more money you make.
Also, if you want more training on this in between the episodes, go to ClosingSellers.com and you can get some video training and free videos on this very stuff that I am talking about. I am going to get into the five communication techniques. These could be used in person or on the phone but they are usually done in the pre-qualification phase. You are making the decision if you are going to speak with somebody further or if you are going to meet with them in person, but they are also used when you are meeting with a motivated seller. It is very important. Where most people get caught is that they hate talking to sellers.
They get kicked in the teeth. They feel like sales is dirty and slimy. They feel like they have to lie and be slick. Nothing can be further from the truth. As a matter of fact, the more blunt, transparent, and confident you are, the less that you try to beat around the bush, the more money you will make. People think that you have to be a slick salesman and you got to be a fast talker. The more you talk, the less money you will make. The better questions you ask and the better you listen, the more money you will make. Do you want to do a middle 5-figure deal or a 6-figure deal? I am talking about a $100,000-plus so learn these techniques.
You have got to learn these techniques and you can do it. Let’s talk about why most people hate sales. Most people hate acquisitions and talking to motivated sellers. You got a brand new wholesaler and they are excited. They have listened to the podcast and they want to do a deal. They start dialing and cold calling or calling back sellers from direct mail. They call a seller and they say, “I was calling you back. You had called me about your house on 321 Main Street.” Immediately, the seller gains back control by starting to say, “What is your name? What company do you work for? How long have you been in business? What are you going to give me for my house?”
First Technique: Redirecting
What they have done by asking me those questions is they have taken control of the conversation and because of this, you are now on the defense. What you must do is get back on offense by asking the right questions using the first technique in The No Limits Selling System. This technique is called The Redirect or Redirecting. Redirecting is the art of responding to a question with a question. If a seller asks you how long you have been in business, the worst thing that you can say is, “I have been in business for two years and I am a member of the Better Business Bureau. My office is at 321 Main Street. I am a real nice guy. Ask any of my friends.” That is pathetic.
You got blown out of the water and the seller automatically gets defensive once you start defending yourself. How do you do it? Ask a question. What I like to do if a seller asks me, for example, “How long have you been in business?” I may answer quickly but then ask a question. I will say, “My company has been in business for eighteen years, but let me ask you a question. Why did you ask me that question? Why did you ask me that? Can you share more with me about what is on your mind?”
I ask that open-ended question. The seller says, “I met with three other investors and they were shady. One showed up late. One looked like he was homeless. Another guy told me he was going to buy my house, but he wanted to list it.” I have dug out more pain. If you checked out the first episode in this series, I am getting right into sales mode and I have got ammunition.
What I do is I have got my pad. If I am in person, I am writing all this stuff down. “If I am understanding you correctly, it sounds like you are looking for a buyer and you are not looking to list it. Is that correct?” Get them speaking more. You redirect. If they said, “How much can you give me for my house?” That is another one. “Make me an offer.” You got to be very careful about that because, now all of a sudden, you sit there and you have lost control. Being in a position as a salesperson, an acquisition person, or a house buyer where you have lost control makes sales not fun.
You are always on the defense. You are thinking that you have to defend yourself. When you use the redirect, it puts you in this position. Whenever anyone asks me, “How much can you give me for my house?” That is the way that they take back control. I am immediately going to respond, “I am not sure yet. Can I ask you a few more questions to find out a little bit more about your situation and the property?” Now I got it. I have set the stage. They have got the understanding. I have got the control. I have asked permission to ask them questions. I will say, “I will make this as quickly as possible so you and I could try to come up with a win-win. Is that fair?”
I will ask about the property and the situation. I am going down my list of questions. I am gaining information and ammunition. I am not on the defense and I feel great. If someone says, “How fast can you close?” I am throwing out examples. It could be anything. Most people say, “I can close in 30 days.” Be very careful about that. The seller gave you an opportunity to find out more information, but instead of listening, you spoke. instead of saying, “I can close in 30 days, 15 days, or 7 days,” you will say, “Let me ask you a question. Why is that timeline important to you? Why 30 days? Would you like a shorter close than 30 days or longer than 30 days? It depends. What is your preference?”
Do you see how I am controlling this conversation? I am always directing the seller but making the seller feel like they are being heard and they are in control. I am keeping control by asking the question. You are going to redirect their energy. Redirect the flow like a river by asking questions. This can work for any single industry.
You can redirect the flow of the conversation like a river by asking questions.
As a matter of fact, one of my favorite ways that is trickier is to practice on garage sales. Most of the stuff a garage has are total junk, but my kids love to shop for toys at garage sales because they get good deals. I always teach them this stuff and ask questions. If you want to have nothing to lose and you do not want to practice on a seller appointment, go to a garage sale on a Saturday or Sunday and start practicing this stuff. It is fun.
Second Technique: Reluctance
Practice it in a deal. It is going to work. By the way, if you want more training on this stuff in between the series, go to ClosingSellers.com. I have got videos on all this stuff. The second technique on The No Limits Selling System is Reluctance. Reluctance is a technique that we use to show the seller that we are not desperate for their house. They need us more than we need them. We are very reluctant to buy the property and do business. This is not to be confused with confidence. You must be extremely confident that you can buy their house. You are reluctant to buy it at their price. You are willing to buy their house, you can buy their house, and you will buy their house.
You exude confidence, but you are very reluctant to look at anything unless you can make a profit. Notice that this is a very quiet confidence, but you are reluctant to do anything in which you are not able to make money. Many investors hide the fact that they are in this business to make a profit. This is very foolish. If you understand this one thing, your posture and your energy, your confidence will go through the roof. One of the things that I make very clear from day one is that I am in this business to make a profit. I am a truth teller and a truth seeker. You want to mention that.
If a seller says, “I want $400,000 for this property.” I want to show that I am reluctant. I can say, “Your property is nice. I would love to be able to buy it, but I cannot do it at $400,000. I cannot make a profit. I cannot do it. I would love to be able to do it, but I cannot.” Notice that I am reluctant. I am saying I cannot, but I am confident. One of the things that the seller want is to make sure the deal gets done. Going through the fears that they have had, they have been procrastinating, the house is a mess, or worrying about the neighbors coming in is also the fact that you are a guy or a gal they met. Even if you have proven your validity through your company and your online presence, they do not know you.
Confidence goes a very long way but must be paired with your reluctance so that you can negotiate the price or the terms that you need to successfully exit this property at the right price or the right terms. Remember that this is all about generating leads. Number two is closing. Number three is exiting. You must do your work in the second part to exit for maximum profit. One of the things I will say, “I do not normally take on houses with tenants in them. I will do it right. I have done it before, but because of that, I need an extra $15,000 to mitigate my risk.” Notice how my voice is exuding confidence. I am reluctant to take on a house with a tenant, but I will if, and only if, you compensate me for my risks.
Third Technique: Verbal Commitment
The second technique of The No Limits Selling System is reluctance. The third technique is my favorite. Out of all the sales techniques out there, number three helps people the most, but also puts cash in your pocket the fastest out of any other techniques. Remember, all people are natural procrastinators, but the people with who we do business happen to be more procrastinators. They are farther down the procrastination scale than others. They let their house get behind in taxes or in foreclosure or repair or they are hoarders or they have not sold it for whatever reason, and because of that, they are coming to you to solve their problem. Verbal commitments prevent people from kicking the can down the road.
Whatever sales you are in, but specifically, this type of sales, you will get a lot of, “Call me next week. Call me tomorrow. I want to think about it. I want to sell my house when I sell this couch. I want to sell this house when I find a new property. I want to sell this house when my son gets a job, even though he has not worked for twenty years from now. I want to sell this house once I figure out if I could do a 1031 exchange after I talked to my accountant.” What happens is even when people have good intentions, they put it off. What this means is that you are not closing a deal and not getting paid. The seller, most importantly, is not solving their problem and time kills deals.
If you do not coach the seller using verbal commitments, you are going to be stuck in this endless cycle of talking with sellers and trying to get down the deal and getting kicked in the teeth with people who will never do business with you. The verbal commitments do two things. Number one, it helps you qualify people and decide if the person that you are speaking to is worth talking to.
Time is your most valuable asset. Two, it is going to help you compress that timeline and define when you are going to be able to do business. Here is how to use verbal commitment. Many times, the seller will tell you that they are going to get back to you or they are going to think about it. They do not even know why they are saying that or what they need to think about.
What you need to do is ask the seller to define in their mind, what is the very next step that needs to happen for them to be able to make a decision? Remember, this is not pressure. We are not pressuring the seller. We are having them verbalize. We are having them think about their very next step that they need to take to push the sale forward or eliminate us as a prospect of doing business with them.
Verbal commitments help you qualify people if they’re worth speaking to.
I always say, “Mr. Seller, I know you said you wanted to think about it. Let me ask you this. What is it that you need to think about?” Have them define that. For example, we bought a house one time from a lady who we were speaking to for three years and her son no longer lived on the property. She was a hoarder.
I am looking back at the notes here and my sales team could not close it. We are like, “What is going on here?” We asked this question and she says, “I have always wanted my son to buy this property. He does not live here anymore. I want him to have it.” I asked her, “How long have you been asking him to buy it?” She says, “Fifteen years.”
This lady has a procrastination problem. I said, “What would be fair? Would it be fair for you to set a deadline with your son? You choose that deadline. Would it be fair to ask you to set a deadline with your son that if he did not purchase by this date or did not want to purchase by this date, then we would do business? If you do not want to do business with us, that is okay. Tell us. My feelings will not be hurt.”
Notice how I am communicating this. I am asking the seller to say no. She says, “I want to talk to him one more time. I want to talk to him on Friday and I want to get a yes or no.” I already knew what the answer was going to be. He has not purchased the house in 10 to 15 years. He is not going to purchase the house by this Friday, but I had her set the date and the outcome. I said, “If he says no, what would be the next step?” She goes, “On Monday, let’s meet together and do the deal.” Long story short, on Friday, she texted me and said, “I have not talked to him yet,” but she did talk to him that Monday. We met on Tuesday and we got the deal done. That is how powerful the verbal commitment is.
It spurs people into action. Sometimes, that action is not doing business with you. That is okay, but you are not wasting your time with someone who is not doing business with you. Let me give you a secret deal with this. You want to be very specific on the very next action. The seller is going to take in between now and the next conversation. Two, you want to set a date and time to speak next. Do not gloss over this. Do not give this weak verbal commitment. It is something very specific with a specific outcome, with a specific date and a time. Do not say, “I will call you Tuesday.” Make an appointment. This is how you start to take your craft very seriously.
Fourth Technique: Stealth Mismatch
You have got a calendar out and you know when you are going to be speaking with that motivated seller, getting a yes or a no, or at least defining the very next action. Moving on four, the stealth mismatch is a very powerful technique. It helps you get deals that you would normally never get. Someone says, “How do you make a seller do business with you?” I can promise you this. If a seller is not motivated, if a seller has no problem, if they have no pain or greed, we are not going to do business with them, at least at a price that we are going to be able to make a profit on. There is nothing that you can do to force someone to do business with you.
There are two kinds of sellers that we do business with. Number one, the motivated. The people who show that they are motivated, tell us that they are motivated, and they are open with them. Two are the ones that we call the unmotivated motivated where they appear not to be motivated. If you have ever been to a car lot and you sat there on a Saturday, I do not know about you, but when a car dealer approaches you on the lot and they say, “Can I help you?” Our initial reaction is, “I am just looking.”
Who the heck goes to a car dealership on a Saturday looking for cars? We do not do it. The prospect or you are lying. All prospects tend to lie to salespeople. By salespeople, I mean you, the wholesaler, the real estate investor, or the person trying to acquire the property. They may not even realize that it is a natural defense mechanism. The stealth mismatch is something I talked about in the first episode.
It is a psychological trick that we use to extract the truth by saying the opposite of what a prospect expects us to say. For example, something that I would say is, “You are better off listing with a realtor and selling up and selling for top price. You could get way more than dealing with me. Is that something that you would be interested in or not?”
The seller is going to say, “I am not interested in that. I do not want to do XYZ because of this.” The seller does not want to reveal their timeline to you. Let’s assume that you may feel like they are in a rush, but they are not telling you. I will say, “The good thing is you can hold on to this house for six months or a year. That would not even matter to you.” They will say, “No, I need to sell in the next two weeks.”
Be very specific about your next action by setting a time and date.
When you go the opposite, when you use the stealth mismatch, it floods out the truth. I might say, “The good thing is your son could stay here for 6 or 9 more months without paying rent. He is your son. You would not care.” “What? There is no way my son is staying here another 6 or 9 months. Over my dead body. He is out of here in the next month or two.” I have got the truth. Do not be scared of saying the opposite.
Do not be scared of throwing away the deal. A lot of people are scared of the answer. Do not be scared of the answer, use the stealth mismatch, and this will flush out people who are motivated. The other part about this is that some people will say, “I am thinking about listing with a realtor. Someone is coming over. He is my brother and I am going to list with him today.”
Now you know that this is the prospect that you should not be doing business with. You have got the truth and you do not have to waste your time or your energy. Remember, your number one asset is your time. You want to be spending time with people who you can help, who are motivated, who have a problem and itch or greed or something that you can do for them in exchange for some of their equity.
Fifth Technique: Price Conditioning
It is very important that you understand that. This is the fifth technique. The fifth technique is price conditioning. If you go back to the first episode, these are communication techniques, but I always suggest keeping building rapport and going back to the pain step. That is in the first episode in this series.
If you want more training on this right now, go to ClosingSellers.com. I have some videos on this and I go into detail. You must condition the seller that you are in this business that you can help them, that you can close, and that you are fast, easy, and convenient, but in exchange for that, you need to be able to make a profit. Say it loud and proud, look them in the eye, and have them understand that.
The worst thing that you could do is try to hide that. I will give you 2 or 3 questions that you can use right now to price condition. One of the things that I will come over and say is, “Knowing that I am an investor and that I cannot pay full retail price, is it worth me coming over to look at the property?” I listen for the answer.
At that point, we may get into a little bit of a price conditioning or I might use the what-if phase that I talked about in that first episode. I am going to know more by using that. The second step is I might talk about some of the comps. When I say the comps, I mean what are the similar houses sold in the neighborhood to their property?
I will say, “I see that houses on the top end are selling for $250,000. I see some houses here from investors that were in that $100,000 to $150,000 range.” Knowing that, is it worth me coming out? I will say, “I am assuming your house is in great condition and we can pay more. Am I incorrect? If it needs a lot of work, I am going to be able to buy at a price that I can make a profit. Can you tell me a little bit more about that condition?” Once they know, then I am going to ask about the condition, the situation, the problems, and that they know that I am going to come in there and be certain I can close, but I have got to make a profit.
The seller’s expectations have been tempered. It also works when you can do that over a period of hours or days. If you come in with a low price, immediately, it is like a sticker shock. You might lose them. Always be price conditioning, but building rapport, making a friend, building a pain, going back to building rapport, and interweave this in price condition. When you go to the house and you ask the tough questions, they are ready to sign that agreement. I hope you enjoyed this episode. Again, if you want more training, go to ClosingSellers.com.
Also, look out for the third episode in this series. This is an episode that is going to be near and dear to my heart. I hear a lot of people talk, “Todd, how do I negotiate a price? Once we get to the nitty-gritty, how do I get the price down?” I find myself at odds. This last episode is going to focus on specific techniques for getting the lowest price possible. I look forward to speaking to you on the next episode.
- Episode 378 – First episode
- The No Limits Selling System
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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.