Posted on: March 09, 2020

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 darrin@wholesalinginc.com.

3 winners will be chosen at random and announced on the Podcast in April! Good luck!

 

Key Takeaways

  • What redirecting is and why it’s important
  • How you can get sellers to speak/share more
  • How to stay in control of the conversation and still make the sellers feel valued and heard
  • How you can show reluctance and why it’s crucial
  • Why your confidence must be paired with your reluctance to buy
  • What a verbal commitment does
  • How to get sellers to make a verbal commitment
  • The power of verbal commitments
  • Two kinds of sellers you will likely encounter
  • What a stealth mismatch is and why you should use it
  • Why you shouldn’t be scared of losing the deal
  • How you can do price conditioning

RESOURCES:

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Episode Transcription

Cody Hofhine:
Hey guys, Cody Hofhine here. Before we go on with today’s episode, I want to remind you about the contest going for the whole month of March. Now I want you to ask yourself this question. What would it do for your business? What would it do for your wholesaling business slash career? If you could just spend two full days with Tom Krol down in sunny Florida and have him really dissect your business plan your model and make sure that you’re really on track to dominate your market. Well for the whole month of March guys, we’re doing a special ratings and review contest where we’re going to pick three lucky winners to go head down to sunny Florida. That’s right. We’re going to take care of all of your flights, all your accommodations, and you’re just going to simply spend two full days with the man, the myth, the legend, Mr. Tom Krol himself in sunny Florida.

Cody Hofhine:
Now what do you have to do? It’s heading over to iTunes and rating and review. So rate and review this podcast, five stars please and then simply just take a screenshot of the review and send it over to darrin@wholesalinginc.com that’s Darrin, D-A-R-R-I-N @wholesalinginc.com. And then ultimately, if that’s 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 podcast as well, so head on over to iTunes, do a rating and a review and simply take the screenshot, send it over to darrin@wholesalinginc.com. Darrin D-A-R-R-I-N @wholesaleinc.com. Now let’s keep going with today’s episode.

Todd Toback:
My name is Todd Toback and welcome to this special edition of the Wholesaling Inc. podcast. On speaking with, negotiating, and closing motivated sellers. Now, 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 listened to that first episode, go back to the Wholesaling Inc. podcast to set the stage. Now if you are a brand-new wholesaler and you have never wholesaled a deal or if you’re a wholesaler and you want to do more deals and bigger deals, this podcast 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; and then three your exit or your disposition of the property. That is it. I’m going to repeat it one more time. Number one, generating leads. Number two, closing those leads. And number three, your exit from the property.

Todd Toback:
Now 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 now your job to convert. Now, most people, 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, right, that a deal is going to fall in your lap. Well let me tell you something. The most successful wholesalers in the country, the people who you see on Facebook or Instagram or whoever else who are telling the truth, who are having those middle five-figure and six-figure months, know, the art of meeting and speaking with and negotiating with a motivated seller. And so that’s what this series is all about.

Todd Toback:
Now, the first episode was very wide. I spoke about meeting with a seller and the technique for doing that. Number two, I’m 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-limit selling system. This is the very system that I use to teach my acquisition specialist to do deals in one of the most competitive markets in the country.

Todd Toback:
Now, if you don’t know me, my name is Todd Toback and I’ve wholesaled over 1000 properties in one of the most competitive markets in Southern California. So I know what I’m talking about. I’ve trained more successful wholesalers than any other teacher or guru on the planet, or at least I’ve taught people who have taught people, right? I’m also Tom’s older brother, the founder of the Wholesaling Inc. podcast. And so my goal for you is to translate this energy, this skill that I’ve learned to you so that you could do more deals, you could make more money, you can add more freedom to your life. And this one thing, if you learn 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 this, what I am talking about today will change your life and change your business and change your income and literally change your trajectory for the next 15 or 20 years. So please, well listen up.

Todd Toback:
If you haven’t listened to the first episode, you can go back after listening to this or listen to that one first. 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.

Todd Toback:
All right, so right now I’m going to get into the five communication techniques and these could be used in person. These could be used on the phone, but they’re usually done in the prequalification phase, right? You’re making the decision if you are going to speak with somebody further or if you’re going to meet with them in person, but they’re also used when you’re meeting with a motivated seller. Very, very, very important, all right. Now I can tell you that where most people get caught is that they hate talking to sellers. They get kicked in the teeth. They feel like sales is dirty. They feel like it’s slimy. They feel like they have to lie. They feel like they have to be slick. And I can tell you nothing can be further from the truth. As a matter of fact, the more blunt you are, the more transparent you are, the more confident you are, the less that you try to beat around the bush, the more money you will make.

Todd Toback:
People think that you have to be a slick salesman, right? And that you’ve got to be a fast talker. As a matter of fact, 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. Want to do a middle five-figure deal or a six-figure deal? Okay I’m talking about a hundred K plus. Learn these techniques, okay? You’ve got to learn these techniques and you can do it. All right?

Todd Toback:
So let’s talk about why most people hate sales, all right? Most people hate acquisitions. Most people hate talking to motivated sellers, right? You’ve got a brand-new wholesaler, and they’re excited, and they’ve listened to the podcast, and they want to do a deal, and they start dialing or cold calling or calling back sellers from direct mail, and they call a seller, and they say, hi, 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, well, what’s 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? Right? And what they have done by asking you those questions they have taken control of the conversation. And now because of this, you are now on the defense.

Todd Toback:
So what you must do now is get back on offense by asking the right questions. Using, okay, the first technique in the no limits selling system, okay? Now, this technique is called the redirect or redirecting. And redirecting is the art of responding to a question with a question, right? If a seller asks you how long you’ve been in business, the worst thing that you can say is, Oh, I’ve been in business for two years and I’m a member of the Better Business Bureau and my office is on 321 Main Street and I’m a real nice guy. Just ask any of my friends, right? That’s pathetic. And you’re going to get blown out of the water and the seller automatically gets defensive once you start defending yourself? So how do you do it? Ask a question.

Todd Toback:
So what I like to do, if a seller asks me, for example, how long have you been in business, right? Is I may answer quickly but then ask a question. So I’ll say, well, my company has been in business for 18 years. But let me ask you a question. Why did you ask me that question? Or why did you ask me that? Or can you share more with me what’s on your mind? Now I asked that open-ended question and now the seller says, well, I met with three other investors, and they were shady. One showed up late, one looked like he was homeless, and another guy actually told me he was going to buy my house, but he actually just wanted to list it.

Todd Toback:
All right? Boom. Now I’ve dug out more pain. Now if you actually listened to the first episode in this series, now I’m getting right into sales mode and I’ve got ammunition. So what I do is I’ve got my pad, if I’m in person, I’m writing all this stuff down, right? So if I’m understanding you correctly, it sounds like you’re actually looking for a buyer and you’re not looking to list it. Is that correct? Right. Get them speaking more, right? You redirect it. If they said, how much can you give me for my house, right? That’s another one, right? Just make me an offer. You got to be very careful about that because now all of a sudden you sit there and you’ve lost control, right? And I can tell you that being in a position as a salesperson or an acquisition person or a house buyer where you have lost control, makes sales not fun, right? You’re always on the defense and you’re thinking that you have to defend yourself.

Todd Toback:
So when you use the redirect, it puts you in this position. So whenever anyone asks me, how much can you give me from my house, right? That’s a way that they take back control. I’m immediately going to respond. You know, I’m not sure yet. Can I ask you a few more questions to find out a little bit more about your situation and the property? Boom. Now I got it, right? I’ve set the stage, they’ve got the understanding, I’ve got the control, and now I’ve asked permission to ask them questions, right? I’ll say, look, I’ll make this as quickly as possible so you and I could try to come up to a win-win. Is that fair? Then I’ll ask about the property, the situation. I’ll go down the list of questions and now I’m gaining information. I’m gaining ammunition, right? I’m not on the defense and I feel great.

Todd Toback:
Now if someone says, how fast can you close, right? And I’m just throwing out examples. It could be anything, right? Most people say, well, I can close in 30 days, right? Be very, very, very careful about that. The seller just gave you an opportunity to find out more information, but instead of listening, you spoke. Instead of saying, Hey, I can close in 30 days or 15 days or 7 days, say, well, let me ask you a question. Why is that timeline important to you? Or why 30 days? Or would you like a shorter close at 30 days or would you like longer than 30 days? It depends. What’s your preference? So do you see how I’m controlling this conversation, right? And again, I’m always directing the seller but making the seller feel like they’re being heard and like they’re in control. But I’m keeping control by asking the question. You are going to redirect their energy, right? Redirect the flow like a river by asking questions.

Todd Toback:
Now this can work for any single industry. As a matter of fact, one of my favorite ways, a little trick here is to practice on garage sales, right? Most of the stuff at garage sales are total junk, correct? But my kids love, love, love to shop for toys at garage sales because they get really good deals. And, so I always teach them this stuff and ask questions. And so if you want to play loose, right? If you want to have nothing to lose and you don’t want to practice on a seller appointment, go to garage sale on a Saturday or Sunday and start practicing this stuff, it is fun, right? Or practice it today in a deal, right? It’s going to work. All right?

Todd Toback:
By the way, if you want more training on this stuff in between the podcast series, go to closingsellers.com I’ve got videos on all this stuff.

Todd Toback:
All right, the next one, the second technique of the No Limits Selling System is reluctance. Okay? Reluctance is a technique that we use to show the seller that we are not desperate for their house, right? They need us more than we need them, right? We’re very reluctant to buy the property. We’re reluctant to do business. Now this is not to be confused with confidence, right? You must be extremely confident that you can buy their house, okay? You are reluctant to buy it at their price, right? You are willing to buy their house, you can buy their house and you will buy their house. You have that confidence you exude confidence, right? But you were very reluctant to look at anything unless you can make a profit, right?

Todd Toback:
Notice this is a very quiet confidence, but you were reluctant to do anything in which you are not able to make money. Now, many investors is they hide the fact that they are in this business to make a profit. And this is very, very foolish. If you understand this one thing, your posture, your energy, your confidence will go through the roof. And so one of the things that I make very clear from day one is that I am in this business to make a profit, right? I’m a truth-teller and a truth seeker, right? And so you want to mention that. If a seller says, you know, I really want $400,000 for this property, right? And I want to show that I’m reluctant. I can say, look, your property is really nice. Okay, I’d love to be able to buy it, but, but okay, I cannot do it at $400,000. I just can’t make a profit. I just can’t do it. I’d love to be able to do it, but I just can’t, right?

Todd Toback:
And so notice I’m reluctant, I’m saying I can’t, but I am confident because the seller, one of the things that they’re going to want, they’re going to want to make sure the deal gets done, right? So going through the fears that they’ve had they’ve been procrastinating, or maybe the house is a mess, or they’re worried about the neighbors coming in, is also the fact that you’re just a guy they just met. Or a gal they just met. Or even if you’ve proven your validity through your company, your online presence, right? They don’t know you. And so confidence goes a very, very, 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, this is all about generating leads. Number two is closing and number three is exiting. And you must do your work in the middle part. That second part to exit for maximum profit, right?

Todd Toback:
One of the things that I’ll say is, look, I don’t normally take on houses with the tenants in them, okay, I will do it, right? I have done it before, but because of that, I need an extra $15,000 to mitigate my risk, right? Notice how my voice is exuding confidence, right? I’m reluctant to take on a house with a tenant, but I will if and only if you compensate me for my risks. So that is the second technique of the No Limit Selling System is reluctance.

Todd Toback:
Now the third technique, this is actually 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. I’m going to repeat that. Number three helps people the most, but also puts the cash in your pocket the fastest out of any other techniques. Now, remember, all people are natural procrastinators, but the people who we do business happen to be more procrastinators. They’re farther down the procrastination scale than others, right? Because they let their house get behind in taxes they’re in foreclosure or repair, or they’re hoarders. They haven’t sold it for whatever reason. And because of that, they are coming to you, okay? They’re coming to you to solve their problem. And so verbal commitments prevents people from kicking the can down the road.

Todd Toback:
Now, whatever kind of sales you’re 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 hasn’t worked 20 years from now, right? I want to sell this house once I figured out if I could do a 1031 Exchange after I talked to my account. And what happens is even when people have good intentions, they put it off and put it off and put it off and put it off. And what this means is that you are not closing a deal, right? And you are not getting paid. And the seller most importantly is not solving their problem, and time kills deals.

Todd Toback:
And if you don’t coach the seller using verbal commitments, right? You’re going to be stuck in this endless, endless, endless cycle of talking with sellers and trying to get down the deal and getting kicked in the teeth, right? With people who will probably never do business with you. So the verbal commitment does two things. Number one, it helps you qualify people and decide if the person that you’re speaking to is worth talking to him. By the way, time is your most valuable asset. And two, right, is this going to help you compress that timeline and define when you’re going to be able to do business?

Todd Toback:
So here’s how to use the verbal commitment. Many times the seller will tell you that they’re going to get back to you, or they’re going to think about it, right? And they don’t even know why they’re saying that or what they need to think about. So 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. And remember, this is not pressure we’re not pressuring the seller, we’re having them verbalize, we’re having them think about their very next step that they need to take to push the sale forward, or and just as good eliminate us as a prospect of doing business with them, right?

Todd Toback:
So I always say, look, Mr. Seller. I know you said you wanted to think about it, let me ask you this, what is it that you actually need to think about? And then have them define that. So 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 in the property, and she was a hoarder. And I’m looking back in the notes here and my sales team could not close it, or like what is going on here? And so we asked this question, she says, well, I’ve always wanted my son to buy this property, and he doesn’t live here anymore and I just want him to have it. I asked her, I said, well how long you been asking him to buy it? And she says like 15 years, right?

Todd Toback:
So this lady has a procrastination problem. And, so I said, okay, what would be fair, right? Would it be fair for you to set some kind of deadline with your son? You choose that deadline. But would it be fair to ask you to set a deadline with your son? That if he didn’t purchase by this date or didn’t want to purchase by this day, right? Then we would do business. And by the way, if you don’t want to do business with us, that is okay. Tell us no, my feelings won’t be hurt, right? Now. Notice how I’m communicating this and I’m asking the seller to say no, right? She says, well, I just 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.

Todd Toback:
Now, I already knew what the answer was going to be, right? He hasn’t purchased the house in 10, 15 years. He’s not going to purchase the house by this Friday, but I had her set the date. I had her set the outcome and I said, if he says no, what would be the next step? She goes, well, Monday, let’s meet together and do the deal, okay? Long story short, on Friday she texted me and said, Hey, I haven’t talked to him yet, but she did talk to him on that Monday. We met on Tuesday, and we got the deal done, okay? And that’s how powerful the verbal commitment is, it spurs people into action. And sometimes that action is not doing business with you and that is okay, but you’re not wasting your time with someone who’s not doing business with you.

Todd Toback:
So let me give you a secret here with this. You want to be very, very specific on the very next action the seller is going to take in between now and the next conversation. And then two, you want to set a date and time to speak next, okay? Now don’t gloss over this. Don’t give this weak, weak verbal commitment, right? It’s something very specific, with a specific outcome, with a specific date, and a time. Don’t say, I’ll call you Tuesday, make an appointment. This is how you start to take your craft very, very, very seriously, right? You’ve got a calendar out and you know when you’re going to be speaking with that motivated seller, getting a yes or no, or at least defining the very next action.

Todd Toback:
All right, moving on four. Now, the stealth mismatch is a very powerful technique and it helps you get deals that you would normally actually never get right. Someone says, how do you make a seller do business with you? Well, 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’re not going to do business with them, right? At least at a price that we’re going to be able to make a profit on it. I want to explain that again. If someone does not have a problem or a challenge or greed or some kind of itch that we can solve, they’re not going to do business with us. So there’s nothing that you can do to force someone to do business with you. But there are two kinds of sellers that we do business with.

Todd Toback:
It’s number one, the motivated. The people who show that they’re motivated, they tell us that they’re motivated, and they are open with that, but two are the ones that we call the unmotivated motivated. Where they appear not to be motivated. If you’ve ever been to a car lot, okay? And you sat there on a Saturday, I don’t know about you, but when a car dealer approaches you on the lot, and they say, can I help you? Our initial reaction is what? I’m just looking, right? Well who the heck goes to a car dealership on a Saturday looking for cars, right? We just don’t do it. So really the prospector, you, you’re really lying, right? And so all prospects tend to lie to salespeople, right? And by salespeople, I mean you the wholesaler or the real estate investor or the person trying to acquire the property, and they may not even realize it’s a natural defense mechanism.

Todd Toback:
So the stealth mismatch, okay? This is something I talked about in the first, is something that we use. It’s a psychology trick that we use, right? NLP to extract the truth by saying the opposite of what a prospect expects us to say. For example, something that I would say is, listen, maybe you’re 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’d be interested in or probably not, right? Boom.

Todd Toback:
Now, right, the seller is going to say, no, I’m not interested in that, right? I don’t want to do X, Y, Z because of this. The seller does not want to reveal their timeline from you, right? Let’s assume that you may feel like they’re in a rush, but they’re not telling you. I’ll say, Hey, the good thing is you can hold on to this house for six months or a year and that wouldn’t even matter to you, right? And now they’ll say, well, actually no, I need to sell in the next two weeks. So when you go the opposite, when you use the stealth mismatch, it actually floods out the truth. I might say, Hey, the good thing is right, your son, he could stay here six or nine more months without paying rent. He’s your son. You wouldn’t care, right? What? There’s no way my son is staying here another six or nine months over my dead body. He’s out of here in the next month or two. Boom. Now I’ve got the truth.

Todd Toback:
Do not be scared of saying the opposite to them. Don’t be scared of throwing away the deal, right? Using the stealth mismatch because a lot of people are scared of the answer. Don’t be scared of the answer. Use a stealth mismatch and this will flush out people who are motivated. And the other part about this, right, is that some people will say, well, actually I am thinking about listing with a realtor. Someone’s coming over, he’s my brother and I’m probably going to list with him today. Well, boom. Now you know that this is the prospect that you probably should not be doing business with. You’ve got the truth and you don’t have to waste your time or your energy. Remember your number one asset is your time and you want to be spending time with people who you can help, who are motivated, who have a problem an itch or greed or something that you can do for them in exchange for some of their equity, okay? Very, very, very important that you understand that, okay?

Todd Toback:
Now this is the fifth technique. Fifth technique is the price conditioning. Now very important here. If you go back and listen to the first episode, these are communication techniques, but I always suggest keep building rapport, right? And go back to the pain step.

Todd Toback:
That’s again in the first episode in this series. I don’t know the number yet, I’m in the studio recording, but I’m sure you can find it. We’ll put the link in the show notes or if you want more training on this right now, go to closingsellers.com, closingsellers.com I have some videos on this and I go into detail.

Todd Toback:
But you must condition the seller that you are in this business, that you can help them, that you can close, that you are fast, you are easy and convenient, but in exchange for that, you need to be able to make a profit. Say it loud and proud and look him in the eye and have them understand that. The worst thing that you could do is try to hide that, all right? So one of the things, I’ll give you two or three questions that you can use right now to price condition, right? One of the things that I’ll come over and I’ll say, look, knowing that I’m an investor, right and that I can’t pay full retail price, is it worth me coming over to look at the property, right? And I listen for the answer, right? At that point, we may get into our little bit of a price conditioning or I might use the what-if phase that I talked about in that first episode, right? But I’m going to know more by using that, right?

Todd Toback:
The second step is, I might talk about some of the comps over there. So when I say the comps, I mean what of similar houses sold in the neighborhood to their property. So I’ll say, Hey look, I see that houses in the top end are selling for 253. I see some houses here from investors that kind of were in that 100 to 150 range. Knowing that is it worth me coming out, right? I’ll say, look, I’m assuming your house is in great condition, and we can pay more. Am I incorrect? And say if it needs a lot of work, I’m going to again, have 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?

Todd Toback:
So once they know, okay, that I’m going to ask about the condition, the situation, the problems, and that they know that I’m going to come in there and be certain I can close, but I’ve got to make a profit. The seller’s expectations have now been tempered. It also works when you can do that over a period of hours or days because if you come in with a low price immediately and it’s sticker shock, you might lose them, right? So always be price conditioning of building rapport, making a friend, building a [pane 00:25:25] , going back building rapport, and interweave this and price condition so that when you go to the house, right, and you ask the tough questions, they’re ready to sign that agreement.

Todd Toback:
All right, so I hope you enjoyed this episode. Again, if you want more training, go to closingsellers.com also lookout for the third episode in this series. Now, this is an episode that’s going to be near and dear to my heart. I hear a lot of people talk, Todd, how do I actually negotiate price? Once we get to the nitty-gritty, how do I get the price down, right? I find myself at odds. This last episode is really going to focus on specific techniques on getting the lowest price possible. I’ll look forward to speaking to you on the next episode.

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