Is Assumption killing your Wholesaling Business?
If repetition is the mother of skill, than assumption is the mother of all mistakes! Understanding this one key about the wholesaling business will allow stronger bonds with the sellers, faster identification of motivation and much (much) shorter sales cycles!
Never assume anything about the seller, the situation or the deal. Bam!
Don’t miss this episode!!
IN THIS EPISODE YOU’LL LEARN:
- The truth about why people will sell their home at massive discount
- Why assumption makes us fail
- The Pawnshop Analogy
- Assuming ‘why’ the seller is selling
- Knowing that the deals are out there
- and so much more…
If you are Ready to Explode Your Wholesaling Business, Click here to Book a Free Strategy Session with me right now!
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Tom Krol: Assumption is the mother of all mistakes, in the wholesaling business, and in most businesses. Let’s talk about assumption. If you’re not careful, you will allow assumption to talk you right out of the wholesaling business. What do I mean by that? One thing that we find with people who are struggling in wholesaling, is they make a lot of assumptions. If you think about it, it’s perfectly normal to do that, right? Why would anybody ever sell their house for pennies on the dollar when you can just call a real estate agent and get full price? It doesn’t even make any sense. This whole business is started on the premises of a wild idea, which is, people will sell homes at massive discounts.
A lot of people, although they say verbally, that they believe that that happens. They don’t really in their gut, they don’t really believe it. They assume that most people won’t sell at a massive discount. This is especially true if you’ve been involved in the real estate arena for some time, either as an agent, or a broker, or an attorney. In some capacity, if you’ve been involved in real estate, this is sometimes your biggest hurdle. We see this with agents who joined the program, they just can’t get past the making a low offer because they are stuck on retail.
Here’s what I want to tell you about assumption, and it happens in a lot of different ways in this industry. The key with assumption, the number one thing with assumption is, that it’s something that you have to get over. The way it comes out in this business is, you’ll see where people are struggling with price, or they’re finishing in their mind, the sentence of the seller or the buyer.
For instance, if you’re building a rapport with the seller and you’re in a deal, you’re looking for a discounted property, they will assume the rest of the sentence, why the seller is selling. Or why the buyer is buying. Or signing your contractor, however you’re flipping your property or you’re flipping your contract, they’re going to make assumptions about the buyer and assumptions about the seller.
Here’s the thing about assumptions. Remember our business, as wholesalers, has almost nothing to do with real estate. We are really in the pawn shop business, and we just happen to flip houses. It really has very little to do with real estate.
If you can imagine if pawn shop owners, which start on the premises of, “No one’s ever going to sell a Rolex watch for $1,500,” or “No one’s ever going to sell a Superbowl ring for $380.” They would be out of business before they even opened their front door. We are a pawn shop business. It’s not important why people do this, it’s important that people do this. There is an industry built around people who need fast cash, for whatever reason. There’s a whole variety of reasons and you are there to be the, remember as wholesalers, we are the convenient fast buyer.
That’s why we’re there, at the sacrifice of price, they’re going to get convenience and speed, and that’s going to be at the sacrifice of price. Remember, don’t assume anything. This is especially true on when you’re trying to figure out why the seller’s a seller. Sometimes a new acquisition manager or a new student will say, I’ll say, “Well why is the seller selling?” They’ll say, “Well, because they’re downsizing.”
And I’ll say, “Oh, okay and?” “Well, because they’re downsizing, they need a smaller house because their kids have moved out.” Now wait a second, stop right there. Stop. Did you tell me that from your own, finishing their sentence, assuming what they meant to say? Or is that what they said? When you strip it all away, you find out that no, no, no, no, no, the seller never said that. The seller first said their surface level reason for selling, was that they were downsizing because the kids moved out. But because the acquisition manager or the new student never went in and deep dove that, they never found out that the real reason was something entirely different.
That they were downsizing because the kids left, but it turns out that the kids went to University of Michigan and they’re stuck in Phoenix, Arizona. They want to be with the kids because it’s a brother and sister, and they’re twins, and they’re on the crew team. They want to go to every single game and they have all the shirts in the garage and they’re missing a game next week, if they don’t get up there next week. They need cash to go up there now.
See, that’s the difference. Remember, as a wholesaler, you are never going to convince anybody to sell their home for pennies on the dollar. We need to be deal finders, not deal creators. The way we find deals, is by not making any assumptions about the deal. No assumptions allowed. Don’t make assumptions about the deal. Don’t make assumptions about why they sell. Find out why they sell. Don’t make assumptions about what price, that they’re not going to take a low ball offer, or a low price. Find out what price they want. These are some of the things that, the thing is you always want to be childlike in how you understand the deal. The reasons for selling and what is the price. Don’t make assumptions.
Don’t be like the professional salesperson, pro negotiator, come in and close the deal. No, no, no, no, no. Be humble. Be totally honest. Never try to hide anything from anybody, especially the seller and get down to the root things. If something doesn’t make sense, say, “It doesn’t make sense. Mr. Seller, why would you sell with me? You can just list with an agent and you can get full price. You have to put some money into the home, and you might have to sit for six to eight months. Why not list it with an agent?” “Oh no, I don’t want to do that because of this reason.” “Well, Mr. Seller, it seems like a nice home and a nice area. I know it’s a pain in the butt to be a landlord, but why don’t you just find some tenants? You can rent out the property and you can be in Michigan and the home can be rented out in Arizona.”
“Oh no, we don’t want to do that for this reason.” You have to eliminate every other chance of them selling the home except for selling it to you. If they don’t want to do that, it was never a deal to start with. You’ve got to get to that right away. Have an abundance mindset. Know that the deals are out there, but don’t make any assumptions about this business, or you will assume yourself right out of the business. Again, remember the pawn shop owner. If you were to think on a pawn shop, at the top of your head, you would look at a pawn shop and you’d say, “Well, wait a second. This business plan makes no sense at all. Somebody could just put it on Craigslist or they could put their things on eBay. They’re never going to bring in all this jewelry and all this other stuff, instruments and all this stuff. And give it to me for pennies on the dollar, and then I’m going to resell it right in front of them, put it in the display case for 10 times more. No one’s going to ever do that.”
That’s what a pawn shop does. We are a pawn shop, we just happen to flip houses. So always remember that guys, always remember, that assumption is the mother of all mistakes. If you can’t explain to me or somebody else why somebody is selling their home for a cheap price, then you’re making assumption. Always remember that, it’s very important, one of the number one pitfalls that new wholesalers have to deal with, and it’s a killer. Be very, very cautious about that. Be childlike in your conversations, and your understanding with the seller to avoid this problem. All right, talk to you soon.