Framing the Conversation: A Tool to Real Estate Investing
Wholesalers often ask me how I explain why I need to bring people (i.e. the end buyer) through a seller’s property prior to closing. This is a very common question and is something I struggled with in the beginning of my Real Estate investing career.
The answer is very simple. Frame the conversation.
Whenever I deal with a prospective seller, I do everything I can to control the transaction. This starts from the first interaction and continues through closing day. I am able to control what is said and not said by guiding each seller through the sale.
The process begins by setting expectations. I once heard a joke about a husband, wife and their talking dog. The punch line goes something like, “She’ll let me do whatever I want as long as she knows what’s coming next.” I’ve found that the same holds true with sellers.
During my initial phone call, I am leading a prospect with the type of questions I ask and how I ask them. After I get the information I need, I then explain what’s going to happen next. This includes an overview of my process, and a detailed explanation of the next step.
When I meet the seller at the property, I reiterate why I’m there. As I inspect the property, I’m building credibility by discussing other properties and other deals that I am working on. I’ll also throw in stories about other seller that relate to the prospects situation. As I make my offer, I again explain my process. I discuss the details of what comes next, and I will address any questions that come up.
Once the contract is signed, I close our meeting by going over the process one more time. The repetition sounds a little overboard. But it’s important to remember that most people’s interaction with a Real Estate transaction is through a Realtor. You want to make sure they understand how the process works and that their questions are answered.
This brings up another point. If you know the seller will ask a question, answer it before it’s asked.
Many people have asked me about how I explain to a seller why I need to bring people through their house before closing. Well, I know that as I explain the process to my seller, they will most likely ask me that question. So I address it head-on.
By addressing the question I know they’ll ask before they ask it, I’m able to frame the conversation.
My explanation goes something like this:
“Mr. Seller, after I send the sales agreement to the title company, I need to get my ducks in a row. So I will need to bring in my contractors and funding partners to go through the property. I’m planning to start construction the day after closing, and I want to make sure I’m prepared. This way, once the title company gives us a clear title, I’m ready to close. I may be able to schedule everyone on the same day, but it’s likely I will need to come in 2-3 times. Once I speak with my contractors and funding partners, I touch base with you to determine what works with your schedule.”
This brief explanation works like a charm. The seller knows what to expect and their questions are answered.
Getting a wholesale deal to closing can be a tough road. Taking control of the transaction and framing the conversation will lead to smoother paths and bigger pockets.
Note from the Author: There is an inherent moral obligation that we, Real Estate investors, assume when dealing with a motivated seller. Our interaction with these individuals is often motivated by external circumstances, such as a death or pending foreclosure, that place the seller in a fragile state. As ethical people, we must enter every transaction with the intent to hold good to all agreements and contracts between ourselves and the property owner. This obligation includes adequately educating ourselves about the industry and the market. The purpose of this article is not to teach the reader how to mislead or deceive a seller, but to side step questions that may be difficult to explain to a person unfamiliar with the details of our industry.