If you plan to become a real estate investor, you’ll be prone to the client’s cross-examinations and doubts. Wholesaling can be a perfect and often profitable entry into real estate investing. But many aspiring wholesale investors get stuck on the prospect of talking to home sellers one-on-one. It can be daunting, but it’s time to put on your big business shoes and explain your side like a pro!
In this mini-series finale, Lauren continues to share some examples of how you can respond to these seller “queries” with ease and expertise. Learn how to answer questions and objections confidently and master the art of wholesaling negotiations by listening to today’s episode.
How To Overcome Seller Objections With Ease – Part 3 Of 3
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I see it all the time. You want to build wealth by investing in real estate, but the problem is that what you want to do might not match where you live or your lifestyle. The truth is that not all real estate investing strategies work in every market. For most people, it’s only natural that you think you have to invest in your backyard because real estate is such a tangible object. You think you need to be able to touch it. For that reason, most real estate investors settle on the problems and limitations that their hometown market brings.
My name is Lauren Hardy, and I’m here to show you that you do not need to live where you invest. You can have location and time freedom as a real estate investor. My goal is to dispel those myths and inspire you to think differently about how you invest in real estate by taking a virtual perspective. My motto is, “Live anywhere and invest where you want.” Let’s get started.
We are back with my common seller objections and questions series. “What do you say when?” That is what I’m answering in this series, but we’re going to keep flowing. I’m going to keep throwing things out that sellers have said to me in the past and how I answer them. Let’s go. “What do you say when you’re buying a property, it has a tenant in place, and the seller tells you that they don’t have a lease with the tenant?”
Here’s how I respond, “No worries. Here’s the deal. It’s always better to have a lease, but if you don’t have a lease, that’s not a big deal. I’m going to have to have your tenant sign in an estoppel document.” All this does is it lays out what they were paying you and verify any security deposit amount and money that you might owe them.
That way I know that they can’t make any claims like, “The seller agreed to have me stay here for three years.” They can’t claim that you owe them a $5,000 security deposit when really, their security deposit was $500. We have to be able to verify something. Usually, the lease document does this but if we don’t have that, we’re going to have an estoppel document and that will take care of that.
You have to weigh out if you really want this deal. If the deal is not that great, pass on it.
If you get the vibe that the seller is trying to sell you a rotten egg, then move on.
An estoppel document is very important. It is something that you want to try to get a tenant to sign anytime that you have a tenant. If you’re buying a property that is tenant occupied, I insist on it even if there is a lease in place. It further verifies that there is no agreement that you don’t know about that the seller made to the tenant behind your back or anything. Make sure you get those signed for a good measure. What if after you tell this to the seller, the seller goes, “My tenant is a nightmare and won’t sign anything?” What do you say? This is where I want to weigh out my risks with the tenant. I would probably insist that we buy the house with the tenant out of it, so buying the house vacant.
What I would say is, “It sounds like we got a sticky situation. You’ve got a tenant who’s a little hostile, isn’t willing to sign anything, not being very agreeable, and you don’t even have them on a lease. You understand there’s a lot of liability. I’ve got a solution. We could serve notice and get this tenant out probably in 30 days, maybe 60 at most. Why don’t we serve notice during the escrow period and I’ll close escrow the day it’s vacant? I will walk you through that. I will give you the notices that we use.”
“I will hold your hand if you need to get an attorney to review for whatever reason. I can give you an attorney contact. It will be super easy. If you don’t do this, you’re not going to sell this home to anyone. Nobody’s going to want to buy this problem. I’m here to help you through the problem, but you have to understand. I need to protect myself as well. You don’t have a lease on this property and your tenant’s not willing to sign estoppel. Those are two big issues and I’m going to be assuming a lot of risks.”
That is probably how I would first answer that. If they’re not willing to do it, then I would have to weigh out how much I want this house. If this is a house where I’m getting a good deal even in the worst-case scenario, I can pay to have to evict the tenant and deal with it for six months if it took six months, I’d buy it anyway. If the deal is not that great, I probably would pass on it. You have to weigh out if you want this deal if the seller is not willing to sell it to you vacant.
The next objection is what do you do when this seller has an issue with walking you through the property to inspect? What if they say, “I want you to buy it sight unseen?” The way I answer it is I say, “Mr. Seller or Mrs. Seller, would you buy a property you’ve never seen before?” and see how they answer. That usually solves that. If it doesn’t, then I go, “Can you tell me why?” Hear them out. Sometimes they are trying to pull one over you.
In that case, you don’t want to buy that property. If you get that vibe that the seller is trying to sell you a rotten egg, then move on. Sometimes there’s something else to it. Sometimes sellers are struggling with things. They might be struggling with hoarding and they’re embarrassed. They’re ashamed of how they’ve been living and it humiliates them to have people walk through their homes.
This is something that you are going to see as an investor. You need to be able to handle that seller with care and explain to them, “Mrs. Seller, Mr. Seller, I know what you mean. It could be uncomfortable having people go through your house, but we do have to take a look at the home. If there’s something there that we didn’t budget for, I could lose $20,000. You wouldn’t want that. Could you live with yourself knowing that you sold me something and I lost $20,000?” They would probably say no.
“Here’s the thing though. There’s nothing I haven’t seen. I want to assure you. I have seen everything. I have bought homes that are full of stuff. I’ve bought homes full of trash. I bought a house that had a car in the backyard, but I wouldn’t have known because there was so much trash on top of it. I’ve bought houses in complete disrepair. I’ve bought homes from drug dealers and it’s a drug den. I’ve seen a lot. There’s nothing I haven’t seen. I want to make you feel comfortable that there’s nothing that I’m going to see in your home that will surprise me or anything. This is just another day at the office.”
Let’s see how they feel there. Are they a little bit more comfortable? I say, “Why don’t we agree on the amount of times that I can go to your home? Would it be okay if I can walk through two times?” The first time it’s going to be about twenty minutes. The second time, it might be an hour. That is usually where we’ll settle at. Most sellers are going to accommodate this. I rarely had a seller say, “No.”
Usually, when the seller says no, there is something they are trying to hide in the property. I don’t want to buy that home. Being able to reassure the seller that you’re not judging them, you’re not going to go take photos and tell their neighbors how they’re living puts them at ease. You need to put yourself in that seller’s shoes and be compassionate to what they’re going through.
That’s it. I gave you a couple of questions and a couple of rebuttals. Make sure you write them down and practice saying them, so they stay in your head. The next time you’re talking to sellers, you can answer their questions and objections with confidence. I hope you guys got a lot out of it. Make sure if you are very interested in wholesaling houses, especially virtually check out www.VirtualInvestingMastery.com, where you can learn all about my coaching program. Thank you so much. I will see you next time.
- Lauren Hardy
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About Lauren Hardy
Lauren Hardy is a Real Estate coach and virtual Real Estate investor, investing in many different markets around the country. With her “people first” approach to the Real Estate business, Lauren was a perfect fit to join the Wholesaling Inc team of coaches. Lauren will teach you her entire process of doing Wholesale real estate deals remotely from the comfort of your home. You’ll be able to do deals in any market in the country – so you can pick the most lucrative markets to go into, regardless of where you live, and generate massive profits quickly.