Seller Called Back on My Offer – What To do (CFFL 0136)
Seller Called Back on My Offer – What To do
Jack Butala: Seller Called Back on My Offer – What To do. Every Single month we give away a property for free. It’s super simple to qualify. Two simple steps. Leave us your feedback for this podcast on iTunes and number two, get the free ebook at landacademy.com, you don’t even have to read it. Thanks for listening.
Jack Butala:
Jack Butala here for Land Academy, welcome to our cash flow for land show. In this eight part series Jill and I talk about what to do when sellers begin to start calling you back. Based on the offers that you sent them in the mail to buy their properties. Stuff that she and I do all day long. Jill how are you?
Jill DeWit:
Great. Thank you. How are you?
Jack Butala:
Excellent. This is episode one of eight. This is an eight part series and it’s called … “Seller Called Me Back On My Offer. What Do I Do?” Jill, you’re maybe the most qualified person I’ve ever met to do this show.
Jill DeWit:
I’ve had one or two or a thousand of these. I don’t even know.
Jack Butala:
In case listener, if you live under a rock. We’ve completed almost 16,000 transactions, purchases, and sales of property so I think we’re both a little bit qualified to answer some of these questions.
Jill DeWit:
I think so.
Jack Butala:
Great show, but before we start let’s take a question from a caller.
Jill DeWit:
Okay, cool. Michael from South Bend, Indiana asks, “I’m interested in the psychology behind the strategy of investing in real estate nationwide. Is it practical to plan for building a nationwide network in order to capitalize on a hot market wherever that market exists in the USA? Are there any investors out there who are investing nationwide?” Good question. I like that. It’s a long wordy one.
Jack Butala:
What do you think? Can you paraphrase, mostly for my sake but maybe there’s some listeners that might want to paraphrase too.
Jill DeWit:
I think he’s just asking, “What’s the psychology behind nationwide versus where you are?” He’s saying, “Okay, is it practical as an investor to have a nationwide market.” Because it might be hot here, it might be hot there, or here. You know, which again, and I think I’ve got to tell you. I’ve read a little bit with this guy and done a little communication with him in other forms … I think he does not just properties I think he does SFR’s and flips all kinds of things, too. He’s talking about general investment psychology and I love it because what we do primarily is nationwide. It’s rare when I get something in my backyard, it’s the greatest thing ever. What do you think Steven?
Jack Butala:
Well, as usual, I have a lot to say on this. I just gave a talk on this recently to a real estate group, not on this specific topic, but it really ties in. It really goes with our human nature when you think about real estate. To stand in front of the real estate and kind of look at it, touch it, feel it and judge it as a piece of real estate. As investors you have to fight that a little bit. You have to say, “Hey” … You have to retrain yourself with your regular biology and say, “Let’s not look so much at the actual piece of real estate, let’s look at the transaction that’s beneath it. Let’s look at the fact that you might have the opportunity to buy it for half the price that you could actually sell it for. That taps into … You don’t necessarily have to purchase … If you live in Ohio you can do a transaction in Nevada if it’s the right deal.
Jill DeWit:
Mm-hmm (affirmative)
Jack Butala:
The psychology of doing that is maybe less about the psychology and more about developing your skills and developing the way you look at these deals as an investor over the way as you would as a home owner or as just a person standing on a piece of land. You think that answers it or do you think he meant something else, am I close?
Jill DeWit:
I think it does. I think it is … I think you’re answering it because I feel the same way. Maybe that’s the psychology about it. The psychology is you’re not looking at that asset for oh what a pretty door we are going to make a lot of money on that because people are going to love the curb appeal. You could care less about that. It’s really just numbers. When you just think about the transactions just based on the numbers it’s a lot easier and to do a lot more and pick the good ones and line them up so I think that’s the psychology.
Jack Butala:
I showed this group, for lack of a better description, a slide or a visual on a screen that I was speaking with. There was a group of people there that were beginning real estate investors. I showed three houses. A house that was in great shape and was really valuable, and I said, “All three houses are in the immediate neighborhood of each other. A really valuable, beautiful house; a house that’s kind of old, but well-taken care of; and then a dumpy one. All about the same square-footage and all basically built in the same year. I asked them which property they would look into first? Every single one of them said the dumpy one. Then I did a slide over one that says I sent offers to all 3 of them. They’re basically worth the same amount from a neighborhood stand point, but the super nice one I can get for X. I think I used $98,000, the middle one I can get for $122,000, and the dumpy one is owned by a curmudgeon grandfather and he wants a $180,000. Now which one do you want? Obviously everybody said, “I want the beautiful one for the lowest amount of money.” Then I saw the light bulb go off over everybody’s head, if you know what I mean.
Really it drove my point home, and here’s my point. The transaction that you’re viewing is so much more important than the property that you’re reviewing.
Jill DeWit:
Mm-hmm (affirmative)
Jack Butala:
I think that’s the psychology of … If you were going to buy a house you know is worth half, you can do it in another state.
Jill DeWit:
Mm-hmm (affirmative)
Jack Butala:
You may have to replace all the plumbing and all kinds of stuff. We can find other people to review that and look at that that are probably more qualified than you are or should be as a successful real estate investor.
Jill DeWit:
Right.
Jack Butala:
I say, “Mail away.” We have tons and tons of members who do most of their transactions out of the state.
Jill DeWit:
Mm-hmm (affirmative)
Jack Butala:
Good for him.
Jill DeWit:
I agree. I agree. Do you want to ask me about the question today, the topic today?
Jack Butala:
Yeah. If someone calls you back Jill what do you do?
Jill DeWit:
(Sigh) Don’t answer the phone. Make sure you have a good voicemail. Just kidding.
Jack Butala:
Let just set this up first, okay?
Jill DeWit:
Okay yeah.
Jack Butala:
The reason that Jill’s phone rings off of her hook, when I say Jill’s phone, I mean her staff’s phone, she picks it up once in a while I’ve seen it. We send tons and tons and tons of direct mail out and we send direct offers to property owners who are showing the signs from a data standpoint that they are interested in selling their property. The result of that is a ton of people call back and they say, “Heck yes! I would love to sell you my property for the amount you just offered.” I signed it and I sent it back in the mail. Or they say, “What? That’s a little bit too low that offer. I’m going to call Jill and find out what this is all about. Maybe I can get my price. And then the third type of response is what we call a little bit anger. You know somebody that calls really upset they think that you’ve insulted them with the price … they think their property is worth a lot more than what we offered.
And sometimes that’s the case and sometimes we make mistakes, but anyway this whole eight part series Jill and I put it together because we were getting so many members and so many questions about, “Hey what do I do with this seller that’s calling me back with X,Y,Z scenario?” We try to lop them all into eight scenarios. Jill’s going to describe what she does let’s say with those three basic categories and then with episodes two through eight we’ll get into detail on each one.
Jill DeWit:
You want to talk about the one right now or just give an overview into the next … And then the first four so they know it’s coming?
Jack Butala:
Yeah if you would like. The three basic types of responses I just described so maybe you can overview how you handle those and what you do with those three basic responses.
Jill DeWit:
Okay, so first of all, I took this differently than you did when we were talking about the topics. Here’s my notes here, first of all … Show one of eight is the seller calls back, what do I do? I’m paraphrasing here. Show two of eight is the seller calls back and wants more money, okay we’ll talk about that. Show three of eight is the seller mailed back a signed offer, now what? We’ll talk about that. Show four is the seller is not on the same page as me and maybe unhappy or mad about my offer price, and we’ll talk about that. That gives you an idea what we are going to do right now so I’m just going to dive into this.
The basics you know the first thing is all right let’s start thinking about this, they called me back. What do I do? Well our first thing is, congratulations! It worked, that’s great! You want to meet them from where they come. You don’t spend half hour on the phone with them, but don’t be short on the phone with them either. You want to thank them for calling and reaching out to you and start getting the details. Get all the information you can about the property and I have a checklist that I go through.
Jack Butala:
What’s on your list?
Jill DeWit:
I share it with our staff and members in our program so our cash flow from land program. Things on my list are like I want to keep track on when the call came in so I have a date. It’s really a checklist. The date they called, their name, phone number, email. Got to have their contact information so I can get with them later. I want to know about the property. I want to know who’s name is it in? Who owns it? What’s the relationship to the owner? Are they the ones able to sign for this and are they the ones that can really negotiate the deal? You don’t want to waste a lot of time with somebody that wants to sell and if the seller really doesn’t want to sell, that’s not going to work. I want to know the county and the parcel number? I want to know the size if they have it? Some of the stuff I look up, but some them have the information right there. They may have the tax bill right in front of them that they are thinking about paying and that’s why they called you too, so that’s why they have all the details there. They’ll have the legal subscription for you, they’ll have —
Jack Butala:
Now wait a minute, I thought you made an offer on the property? Shouldn’t you know this stuff already if they’re calling you back?
Jill DeWit:
My offer may have been 5 years ago, and I may not have that information at my fingertips. I never get into that and they don’t mind.
Jack Butala:
You know I’m being silly.
Jill DeWit:
I know. If it’s a new, fresh one and they have a reference number, great, I can go into my data base and pull it right up. Yeah, but on my offer–
Jack Butala:
We send thousands and thousands of offers all the time, we’ve been doing it for a long time so when Jill’s phone rings she doesn’t know exactly where it’s coming from. It could be from 5 years ago, it could be from Massachusetts, it could be in Oregon. It could be 40 acres it could be tiny little investment type lot in Arizona so she kind of has to find out from the seller … Believe me the way we send the offers out, the seller kind of assumes that you only sent an offer to them. When the way we make it look through a mail merge, it looks like we just sent one offer out in our whole lifetime addressed to that person specifically. Do you ever find that Jill that they’re like, “What do you mean you’re going to need all that information I thought you sent me an offer?” Has that ever happened?
Jill DeWit:
Sometimes they’ll say, “I have a reference number” and when they start reading off the reference number, I can tell based on our sequence that it was, shucks, that was 6 years ago. I’ll just say, “That one was 6 years ago,” and they’ll go, “Yeah, I know that.” And I’ll say, “Okay.” Then they’ll laugh about it and they give me all the information and it’s all good. Then not to mention there may be things on my offer that I don’t know like what’s the tax situation? I may not have that in my notes right there on a current one so it’s all good.
Jack Butala:
Mm-hmm (affirmative)
Jill DeWit:
I’m just going to go through the rest of my checklist. Basically, all the details on the property–
Jack Butala:
What do you mean all the details?
Jill DeWit:
Just what I described. The physical details, the location, size, APN.
Jack Butala:
Oh okay.
Jill DeWit:
That’s when I mean details.
Jack Butala:
I thought you meant what does the property look like?
Jill DeWit:
Oh gosh no. I don’t really care because I know it’s vacant land.
Jack Butala:
You know I’m poking here at you a little bit because I know these are the questions we get all the time and I’m trying to drive a couple of points home. We’re not real concerned as much about the actual physical property. I can’t say that enough throughout this whole series. We’re so much more interested in the price. Let me give you an example. Let’s say we decide to send out letters for the … We review the data set that we have. We take a look at all the 40 acre properties in northern Utah. Let’s say just one county in Utah and we send offers out for we’d like to buy them for $4,000 a piece. We set that price based on a lot of stuff we talk about in our program, but it’s low enough that if we get anything close to that we know we’re going to make money immediately. We’ve done all the research and again we talk more about that in our program so if one of these people calls Jill back or her staff back and she’s filling this information out, there’s a pretty good darn chance already like 80% of the work is done. All they have to say is, “Yeah.” My point is this, it doesn’t matter about the asset. The asset we’ll figure that out later, but we’ll make it work 9/10 at that price point, right?
Jill DeWit:
Mm-hmm (affirmative), so that’s where I was going, I thought you wanted that much detail when you asked so that’s why I went into it. Okay, I got it.
Jack Butala:
I’m so glad you did because we have many, many members especially, right, in the first 2,3,4,5 transactions that they do that really get caught up in getting all the details … All I’m saying is, you don’t need to … You need to know the basic stuff that Jill just described. The contact information, size of the property, the county, the APN. Jill is a pro at using these questions to befriend the seller so that she ends up purchasing their property for the price that she wants.
Jill DeWit:
Mm-hmm (affirmative)
Jack Butala:
You can use these questions in a really friendly type way to establish a relationship with the seller.
Jill DeWit:
That’s the one thing you just have to learn as you go. I think I see a lot of people that start this business, and I think they’re freaked out because their phone is ringing and they feel like they should be professionals. No, no, no, no. It’s okay to say, “You know what, I’m new at this” but the person is just so happy because you’re interested in their property. It’s okay to say, “You know I’ve only been doing this a little while” or whatever, and you can them feel comfortable and you feel comfortable. It’s nothing to stress about, but I watch people stress about that.
Jack Butala:
Me too.
Jill DeWit:
“I should sound like a pro, I should know what I’m saying, I should rattle off a list.” I’m like, “No, no, no, no.
Jack Butala:
You know that’s why I want to do this series of shows.
Jill DeWit:
Mm-hmm (affirmative)
Jack Butala:
That exact reason because it is such a popular topic. New investors, everybody has a thing that they get hung up on. I talked about mine when I was a beginning investor and I think you have too Jill. I’m not sure you’ve had any? You didn’t have any hang ups did you? Not hang ups, but things you were concerned about?
Jill DeWit:
No, because for me this was an easy transition from everything else I’ve been doing. Working with people and I’m used to talking to people about $40,000 transactions. It’s not a big deal at all. Even $70,000 transactions before I got into land based on other things that I did, so I had no trouble saying, “That’s $18,000, what credit card would you like to put that on?” Seriously, and their like, “Okay, American Express da-da-da.” Some people were like, “Ahhhh (Gasp),” and you know that’s a good point that we’ll talk as we get into this more.
Jack Butala:
Right.
Jill DeWit:
Never assume that what your buyer or seller thinks is a good deal. They might think, “Oh my gosh, I just stole that from them” and you’re like “Yay!” About the sales price, too. You don’t know what they were thinking and you can’t assume. Why I see people getting tripped up on it is they feel like they’re embarrassed to ask for too little or da-da-da. You know what? Don’t be, make it a fair offer, and let them tell you. You know, would you do this? Happens to me all the time. [crosstalk 00:17:23]
“You said $900, is there any way we can make it a $1000?” Oh gosh, how easy is that for me to say, “Yeah, it’s a $100, done.” They feel like they won, piece of cake.
Jack Butala:
You know what I see? It’s not so much a trip up on negotiation, but what I see is they are legitimately concerned or afraid about making mistakes because it’s their first few deals and they don’t have that transaction experience under their belt. You said it earlier, all you have to do is say, “Hey, seller this is my” … You ever have a waiter come up to you and say, “Hey, you’re my first table I’ve ever waited on.” And I say, “Congratulations, because I’m going to be the best customer you’ve ever waited on.” Everyone takes a deep breath and it’s fine. I love when instead of just being freaked out, they disclose that right up front and it disarms everybody.
Jill DeWit:
Well, I have a trick for that too, by the way.
Jack Butala:
Yeah! That’s what this podcast is all about, tricks!
Jill DeWit:
I have a trick and a tip. If you get all the information, tell them you’ll call them back. Take a break. If you’re a little tripped up and not sure if you got all the right information, then you know here’s what I want you to do. Give me the list. The third and final thing when they call you back is explain how the process works, and tell them what you’re going to do next, and how the transaction is going to unfold. We’ll get more into that in another call, another part of the series. My point is it’s okay … If you’re not comfortable, don’t make an offer right then. One of the questions you’re going to ask them is, “How much are you asking?” And if they say, “$5,000.” You’re not under the gun to say, “Oh shoot, is that good, do I take it, is that not good?” Don’t make the decision right then. You’re not comfortable, that’s okay.
Sometimes that’s even better to sit, think about it, do your homework, not just for you, but for the seller by the way. There’s a little bit of psychology for the seller when you say, “You know what? Thank you, I appreciate your asking prices. I’m going to do my homework, and I’m going to get back to you.” And hang up. By the way, “Oh my gosh, I forgot to ask them this, da-da-da.” Call them right back, big deal. Don’t spend an hour looking for something just because you forgot to ask the county. You got everything you want and you’re like, “Oh my gosh, I don’t even know what county that is? I got the parcel number so I’m not going to go searching all the counties, I think it’s California.” No, no, no. Call them right back and go, “Oh my gosh, I can’t believe I forgot this town? What county was that again? Oh, Kern. Thank you, bye.” You know, whatever. Then, do your homework, take your time, and go from there.
Jack Butala:
Here’s the takeaway. You can’t make a mistake.
Jill DeWit:
Right.
Jack Butala:
You really can’t. That person owns one or two or maybe a few pieces, handful pieces of property and chances are, they know a lot less about it than you do. It’s not like you’re buying their house that they live in every day. Their calling you back because they want to get rid of it. You’re not sending them a top end top price offer so you can’t make a mistake. That’s really what I want to leave the listeners with, the new investor listeners with.
Jill DeWit:
Create your checklist, too and it’s ever evolving. We laugh about this, because remember for me, I made sure it was a highlighted bold part of my checklist for me and my staff which is, “Do you have any other property?” I learned that as I went along. Boy I need to be asking that because these guys have other properties available. As you go along, you’ll realize, oh I always forget to ask that one, I got to make sure I have that one on my checklist. Don’t try to memorize this, it’s okay to go through your steps and you won’t forget anything; you’ll get better and better as you go along.
Jack Butala:
Exactly. Part of what we offer at Land Academy, part of our Land company’s family is a website called successplan.com and if you don’t have a check list and you would like to see other people’s checklist, our checklist, or some of our other members, please go onto successplan.com and ask, “I’m new, I listened to the podcast, I would love to see your acquisition checklist.” Everybody will swarm to help you out, it’s a real positive community. Join us for another episode where Jill and I discuss your all important success in property investment and in life.
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