Today’s REI Classroom Lesson

As Nate Armstrong explains, once you have an appointment with a potential seller, make sure to add value to the deal, connect one a personal level, and be upfront with them.

REI Classroom Summary

Instead of being aggressive with sellers, Nate Armstrong urges investors to find common ground so that the sellers are comfortable with you.

Listen to this REI Classroom Lesson

Real Estate Investing Classroom Show Transcripts:

Mike: Welcome back to the REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. Now, let’s meet today’s expert host.
Nate: Hello, everyone. I’m Nate Armstrong, author of the bestselling book, “Real Estate Gold Rush.” Thanks for joining. Today I get to teach you guys about how to land a seller lead appointment.
Mike: This REI Classroom real estate lesson is sponsored by
Nate: This is when the seller calls you or maybe they are referred to you and they say, “Hey, I’ve got a house I need to sell.” What do you do? Okay, I’ve seen a lot of people go into this. Now I want to break a couple of old myths that are out there in this whole thing. I’ve seen a lot of people go into these appointments and they think, “Oh great, this is my chance to really negotiate and get the deal by being super strong.” That is an old-world of real estate thinking. Being the tough negotiator isn’t what you want to do for these seller appointments.
Today what you want to do is you want to add value, that’s the very first one. I’ll fill it in with the big V right here, add value. Okay, so what does that mean? In the old-world of real estate you would go in and you would try to negotiate, you would point out things like, “Oh, the hardwood floors are all scratched up. I need you guys to drop the price.” Today, you don’t want to do that. Today what you want to do is you want to go in there and you want to say, “Hey, look these hardwood floors, we can restore these things, no big deal.”
And literally the last major deal that I did on a seller appointment was on a single family house that I made 22 grand on simply by going in there and adding value and doing these next two steps. But the seller got on his hands and knees and he said, “Gosh, these floors used to be so beautiful when dad was alive.”
And then I got down on my hands and knees with him and I said, “You know what? We’re going to restain, we’re going resurface these floors, we’re going to sand them, stain them and make them look beautiful. And then when we’re done with the renovation here, we want you and your family to come back and take pictures. How would you like that?” And he looked at me like, “Really? We can do that?” and I said, “Yes, you can. Of course you can.”
Now, what does add value mean? Add value means this, when I go in there and I meet with the seller directly I actually tell them, “Hey, here’s what we can do,” a lot of times it’s the stuff inside the house. There’s like generations of pack rat-itis, and I say that with all the love in the world. My mom and dad have some of the pack rat-itis and sometimes I get it too.
But when I walk into some houses, everywhere there’s stuff. The first thing I tell sellers is, “Hey, why don’t you take the next few weekends and pick out what you want and then anything that’s left over I’ll donate to the Salvation Army for you on your behalf so you’ll get the tax write-off. How does that sound to you?” That’s adding value.
“Hey, you know you’re worried about the title company? Tell you what I’ll pay for the title company to come to you to do a remote closing.” Their eyes get big sometimes like, “Really? You can do that?” Yes, that’s adding value to the equation. Make sure you add value to the equation when you’re there.
Next, build rapport. I’m going to put a big R right here for rapport. What does that mean? That simply means this, when you’re in the house with the seller, again you’re not there to try to beat them up on the price. That’s not it at all. Instead you want to build rapport, add value, and then the last one up here. When I go to these houses, the first 10 minutes upon my arrival, I don’t talk about the house. I don’t talk about the numbers. I talk about them and I talk about me. I want them to know me, I want to know them. Truly know them, like I want to really understand who they are.
I’ll give you an example. The last one I went on the gentleman was wearing a T-shirt that said, “Lake Superior” on it, and then I’m like, “Oh, hey Lake Superior. I know Lake Superior. That’s not too far from my parent’s house. My parents grew up there. I grew up around there. What do you know about Lake Superior?” And we just started chatting and he told me stories about him as a child going to Lake Superior, that’s how you build rapport. So don’t talk numbers, don’t talk negotiating. Take 10 minutes and really connect with the person. Build rapport with them.
Last up here, be transparent. I’ll put a big T right here. Be transparent. What does that mean? Simply means this, a lot of sellers when they’re in their houses and they’re waiting for you to come, they hear about investors and they think, “Oh, big bad investor. They’re going to steal my house from me.” Or they get these preconceived notions in their head. You want to show up and show them that you’re the opposite.
I show up with the comps printed, the comparable sales reports, I hand them to the seller and I say, “Hey, if your house were in perfect condition, this is how much it would sell for. Of course you have to keep in mind that we have to pay a realtor or broker 6% or so. You’d have to pay for closing costs for the new buyer, you’d have to wait for new buyer to come and that could take four months, it could take six months. You never really know.”
So that’s what I start off with though. I mean this is after I build rapport. But I start off the conversation about the house by being transparent. I want them to know that I’m not there just to take advantage of them. I’m there to make a win-win scenario that we can both walk out with a smile on our face at the end of the deal.
Great, I hope that that helps you. Once again, my name is Nate Armstrong. I’m author of the bestselling book, “Real Estate Gold Rush.” I look forward to serving you again sometime soon in the REI Classroom. Thanks.
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