The rule of thumb in real estate investing is that for every 100 offers you present to sellers, 10 will be interested in the offer but only 2 will sell to you. The other 8 sold to somebody else. How do you get the other 8 to sell to you? You have to manage their expectations when you make them an offer.

Have you ever spent an hour talking to a seller and getting their verbal ok to sell their property to you, only to find out they sold to someone else that talked to them after you? Why was that investor able to close your deal? The primary reason is that the other investor was able to better manage the seller’s expectations and for that reason they were able to close the deal.

What is the best way to manage expectations? The first step is to talk to the seller and get them to agree to the deal. Don’t ever give the seller the opportunity to think about selling because they will convince themselves not to sell. Once you have their agreement, you need to have the necessary paperwork with you to get them to sign and close the deal. If you have to come back tomorrow with the paperwork, that leaves the door open for someone else to steal your deal.

You need to know that this is a good deal before you every go to visit the property. This is called pre-qualification. If the house is not a good deal then you do not need to drive around town to see the house. You have set the expectation with the seller that you will buy the house when you agree to visit and if you don’ purchase the house it can create animosity.

When you identify a potential property to purchase, you need to pre-qualify it by talking to the seller on the phone. You should have a list of questions that you ask the seller and the best way to do this is to have a form that you fill out while talking to the seller. This allows you to collect information that allows you to quickly determine whether or not the property meets your criteria for purchase. If the house does not meet your expectation then you should not waste your time or the seller’s time by visiting the house.

When talking to the seller on the phone and you realize the house meets your criteria, you can tell the seller what you might be able to do. This sets the expectation with the seller before you actually arrive at the house. When inspecting the house on arrival you can adjust your offer up or down based on the condition of the house. The seller should understand why you are making the adjustment because they are familiar with the condition of their house. If you set the expectations up front, you are more likely to convince the seller to sell to you and you can close more deals.

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Filed under: Real Estate • Real Estate Investing

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