If you are an active real estate investor, chances are you’ve put in an offer that has been met with resounding silence-no counteroffer, no communication within the time for response. Nothing.
Have you ever followed up to see what happened? Did the owner get a better offer in money or terms? Did the other offer include some value added service that helps out the owner? Was the offer too little? Did the owner or their agent understand your offer? Do they trust you or are they inclined to ignore any offer from an investor?
Understand that real estate investing is a “people” job. Several factors will greatly enhance your ability to get to “yes:”
1. Establish a level of trust and understanding with the agent and/or the owner before making your first offer. Get to know agents and other investors through community and professional networking. Ask to give a presentation to other agents in the office on transactional short sales or other investment strategies. The agent must be on board with the process and paperwork you are using, so set a face to face meeting to go over the details once you have a basic level of rapport. Suggest that you attend the offer presentation with the agent to answer owner questions and concerns.
2. Follow up frequently once the offer has been made. Set up a schedule for following up with homeowners and stick to it. If you do not follow up you run the risk of not being taken seriously or having the offer be misunderstood. If the offer is turned down, and ask questions as to why it was rejected. Learn from the insights of the agent or owner. If the problem is you, you have total control over making the changes necessary to come across more professional, knowledgeable or serious. If the problem is the offer, there may be ways you can still get to “yes” with a modified offer.
3. One of the most powerful tools that can set you apart from your competition is to determine what the owner really wants or needs. Understanding their motivations will help you devise value added propositions to sweeten your offer and to make it stand out above the others. Does the owner need assistance in paying liens in order to proceed with a short sale? An offer to do the clean-up of the property may be just what an ill or overwhelmed Homeowner may need to get to “yes.”
4. Adding value is also important to getting accepted by agents as well. Taking the short sale negotiation process off the agent’s hands and into the workflow of a professional negotiator may be just the thing that an agent may need to get the agent enthusiastic about representing the short sale owner. Offering to pay a point or two that the Lender may refuse to cover will also set your offer apart from the crowd.
You’ll get to “yes” much more frequently if you develop trust and credibility up front, set yourself apart by giving value added service and benefits, and follow through religiously on your offers.
There are tons of ways to make money in real estate, but all of them are useless unless you have a steady flow of motivated sellers and qualified buyers coming into your business. When you have a solid pipeline of prospects, you pick and choose the best of the best and finally take control of your financial future.