5 Ways to Lose a Deal
By Paul Esajian on July 31, 2015
It is never easy losing a deal to your competition. Instead of pouting about it and letting it impact other areas of your business, try learning from it. The odds are that you will be in the same situation with a different seller at some point in the near future. When dealing with traditional sellers, it is the little things that can make a big difference. They are not as motivated in price as they are with presentation and perception. In most cases, deals can swing with how you act in the following areas:
1. Perception: Put yourself in a distressed seller’s situation. You have battled for months to keep your house, and now you may be finally realizing that your best option is to sell. The last thing you want to see is an investor with their contractor talking about what they are going to do with the property once they take ownership. You need to walk the line between never running from the fact you are investing with a purpose and thinking about the seller. This is a delicate balance but one that can directly impact the number of deals you get. Instead of showing up at the house in a three piece suit you should dress down and consider the situation. Nobody, especially a distressed seller, wants others to profit from their situation. If you are asked about why you are considering the property you need to emphasize the risks you are taking. Yes, you see value but only after significant cash outlay that may or may not yield a return. The more down to earth and welcoming you are the greatly chance you will walk away with a signed contract.
2. Presentation: Along the same lines as the perception you give you need to be mindful of your presentation. A distressed seller may not appear to have choices but they have more options than you think. Every time you meet to get a contract signed you have to have the mindset that you have to earn it. If you are having a bad day or having trouble with another deal you need to let that go. You should expect homeowner to be surrounded by multiple people asking numerous questions. Every time you get frustrated you decrease your chances at getting the deal. Instead of a quick, five minute meeting you should plan on being there for hours. You need to prepare yourself for every question in the book and answer it as honestly as you can. You don’t need to have every answer but you need to be as straightforward as possible. Losing a deal during negation is tough but losing it 45 days into the process because you mislead the seller is nobody’s fault but your own. The presentation and your ability to put the seller at ease is the most important thing you can do to get more deals.
3. Patience: If you are dealing with a distressed seller you should expect there to be plenty of questions. This is a new experience for them and a very stressful time in their lives. There are going to be days where you don’t want to deal with it but it is all part of being an investor. You will have to answer the same question multiple times or field multiple phone calls a day. The minute you start losing your patience is when the seller will start looking elsewhere. You need to expect to hold the sellers hand throughout the entire process in a calm and supportive manner. Don’t get annoyed or frustrated in this. You are in the position you want to be you just need to be patient and answer questions for a few minutes a day. If you can do that you will end up with more deals and even a few referrals.
4. Follow up: Distressed sellers receive multiple phone calls, letters and postcards starting from the first month they are late. Even after a contract is signed you need to follow up and secure the deal. Let your seller know of any important dates or timeframes they must meet in plenty of time. Even if there is a lull in the deal spend a few minutes every couple of days touching base and letting them know what is going on. You can’t expect them to know what is going to happen next. Walk them through the process and always stay in touch. The more active and responsive you are the less likely they will entertain a fancy postcard or letter they receive from someone else.
5. Don’t push: As much as you want to constantly keep the deal moving forward you can’t push too hard. By steamrolling the seller to closing they will begin to get apprehensive about the deal. There are times when time is of the essence but you can’t make everything an emergency. By constantly threatening and pushing eventually the seller will take a step back. The best plan is to give the seller the consequences if they don’t act. Never make threats or promises if they don’t act by a certain date. If they don’t respond you have lost the deal. Be up front and honest during the process and understand that if you push too hard you will probably lose the deal.
In most cases, deals that you contact are there for the taking. They typically go to those investors who are best at communicating the process and what is expected. Every meeting that you have is an opportunity for a new deal. It is up to you to never lose a deal to a competitor again.