One of the most important things wholesalers need to know when talking to property owners is their why. The thing is, extracting a seller’s why is often easier said than done. Fortunately, in today’s episode, our very own Cody Hofhine will show you how it should be done!
Cody has talked to countless homeowners and has basically created a technique that can get you to the bottom of things—the seller’s why. In this episode, Cody shared why it’s important to know the seller’s why, how you can determine if you have a deal in your hands, and what motivation sounds like, among many others.
This is one short but very meaty episode so be prepared to take down notes!
- How to know when you have a deal
- What motivation sounds like
- What equity is
- Questions that will lead you to the seller’s why
- Why you need to ask questions with authority
- What the beginning of a great deal is
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Hey guys, Cody Hofhine here with Wholesaling Inc, the number one wholesaling coaching program in the nation, and we’re going to break down what it takes to make a wholesale deal. There’s two things that are huge when it comes to wholesaling. What makes a good deal? I hear this all the time. In fact, just recently on a Facebook live as I was on it, someone chimed in and says, “Hey, how do you know when it is a deal?” You need to look for motivation and equity. Those are the two things that determine if you’re going to have a good wholesale deal, or if this can even be a good deal. If those two things are in place, you can make a great deal.
Now, what does motivation sound like? Motivation could be someone that might be behind on their bills, maybe behind on the mortgage, behind on their taxes. Maybe someone that’s going through a divorce and they need to split up assets and are ready to sell and they need to sell quick. Maybe someone just got a call from their boss saying, “Hey, you no longer are going to be in the Utah office. You’re now going to be in the Arizona office and we need you down there in two weeks,” and they need to move quick. That is motivation.
The other one is equity. What is equity? Equity just simply is the difference between what your home is worth and what you owe on your mortgage. So if the home’s worth $250,000, but they owe $150,000, you have $100,000 in equity. That is the difference right there. So you want a home… When you’re talking to people, you want someone that’s motivated, but also homes that have equity. Those are the two big things.
Now, as we go through our script, those that go through even with the tribe, with our coaching program, one of the big things on our script is asking things with authority. One of my favorites is knowing some whys, because at the end of the day, you have to determine your motivation and you have to know the equity. Here’s the two questions. One of the questions is, this looks like a nice home, why are you considering selling it? So as you’re talking to someone on the phone, they’re like, “Hey, I’m ready to sell my home.” That doesn’t really tell us if they’re motivated or not. A lot of people want to sell their home. Do they want to sell it at a discount? Is there anything even going on in their life that makes them have to sell or do they just simply want to sell? So that question is going to help open up the why.
This looks like a nice home. Why are you considering selling? And then just sit there and listen. They’re going to start telling the story, “Oh my kids, they are now out of the house and I don’t need this big of house anymore. So we’re just going to downsize.” And still does that sound like motivation? No, not yet. So what you can do is ask open-ended questions, nothing that ends with a yes or a no, something that they have to expand on or explain. It sounds like you want to downsize your home, tell me a little bit more about that and then sit there and listen. And hopefully they start to lead to the point where maybe they say, “Hey, it’s actually I’m moving in with my mom and dad because my husband lost his job, and we actually just need to go move in with them because we can’t afford this home anymore.”
Okay. Now you know there is motivation. Now what you need to know is equity. A lot of people struggle with this question, but if you do it right, and you do it with authority, you should have no problem. A lot of time our biggest problems is our mind. We think it’s a problem, and you hear the old adage or the old quote from Henry Ford, “Whether you think you can or can’t- you’re right.” So if you think this question that I’m about to bring up is a problem, you’re right. It’s going to be a problem. But if you can go through it with authority, it won’t be a problem. It won’t be a hiccup. And that question for equity to find out if they have equity is simply asking them, “So, what’s owed on the mortgage?” Or, “How much do you owe your house?”
And you’ve got to ask that question with authority. You can’t ho-hum around it. You can’t act weak around this question. You can’t say, “So, if you wouldn’t…” And you’re twitching your fingers, “If you wouldn’t mind telling me how much do you owe on your home.” They’re going to be like, “What does this have to do with it? That’s none of your business.” So you want to make sure that you ask it with authority, “Hey, how much do you owe on your mortgage?” And they may still say, “What does that have to do with it? That’s none of your business.” You’re going to have to still go back with authority because we need to know if there’s equity. And so what you can do to simply do this. I had this question just recently on just one of our student coach calls that we do on every Wednesday.
They asked, hey, I get people all the time telling me, “Oh, what does this have to do with it? I don’t want to tell you how much is owed. You just tell me what you can pay my home for.” What I always do is I come back in a way of service, a way of wanting to help them. At the end of the day, here’s what I want to do. I want to find my best way possible to help you. I don’t want to just simply give you a cash offer because maybe just giving you a cash offer is not your best option. Ultimately, I don’t want this to be just my own win, I want this to be a win for you and a win for me. So how much is owed on the mortgage? And just go again.
You got to make sure that you just go in again. Don’t stop. Be okay asking that thing twice, three times if necessary. And if they still don’t want to, I just don’t know how that’s going to help you. Here’s the thing. I don’t know if I can help you. That’s why I want to make sure I have every option available and knowing how much you own your home allows more options for you. So, how much is owed on the mortgage and just go with authority. If you hesitate, or if you stop ask that question or, it’s okay, you don’t need to tell me, they start to wonder, “Well, had I told him the price… I mean, how much I owed on it, I mean, what’s going on with this guy?”
You got to maintain that authority that you’re doing it to benefit them, that this is a way that you can find all options possible so that you can make this a win-win situation because every deal not only has to have motivation and equity, every deal also has to end with a win-win scenario. It’s got to be a win for the seller and it’s got to be a win for me, the wholesaler.
If you can start finding the motivation with that simple question of the seems like a good home, why are you considering selling it? Start to find the why, don’t worry about the home, how many beds and baths and what needs to be fixed on it. Just find out why, why they are selling the home. The second one is equity, what’s owed on the mortgage. If they give you any kind of fight back you say, “I want to present all options to make sure we make this a win-win. So how much is owed on the mortgage?” Go in again strong, because if you can find a home that has a motivated seller and has equity, that is the beginning of a great deal.
Guys, thank you so much for listening to the podcast today. If you’re looking for help to build your wholesaling business, head on over to WholesalingInc.com and that’s where you can book a call with our team and be able to talk with our team members and find out if it is a good fit for you guys to be in the tribe. Thank you so much guys, and we’ll see each one of you guys on the next episode. Take care.