Lead Conversion Tips From The Pros
By Paul Esajian on October 27, 2018
Your goal as an investor is to convert leads into actual deals. As obvious, and simplistic, as this may be it is the core of your business. Getting leads and talking to homeowners is nice, but it doesn’t do anything to improve your bottom line. Simply getting more leads doesn’t necessarily mean you will close them. Sure, it increases your chances, but you still need to execute. Getting the homeowner to agree to a contract takes a mix of trust, comfort, education and perseverance. By closing just a handful more of the deals that come your way often separates good investors from great ones. There is a definite skill and style required in getting someone to agree to work with you. Here are five proven tips to help convert more leads to deals.
- Build rapport. For many homeowners, real estate investors are like used car salesmen. They will say anything to get a deal and bend the truth whenever possible. Right from the start you are facing an uphill battle to get them to trust you. Instead of diving right into your property pitch you should take a step back and build a rapport. It is ok to slow the conversation down and ask personal questions about their family, the property, current events or something local. Instead of just asking the questions and thinking about what you are going to say next, listen to their answers. Sometimes a follow up question about their child’s college or recent sporting event is all it takes for them to open up and feel comfortable. You probably won’t secure a deal from small talk, but you can lose it if you coldly dive right and start talking numbers.
- Drive home negatives. There is a definite art in getting someone to work with you. How you ask your questions and gather information is an important part of the process. After you have as much data as you need to form an opinion on the property you need to start working on influencing their decision. This is a delicate balance of pointing out all the negatives with the property without piling on too much and making it look too bad. If you totally disparage the property, the homeowner will be offended and probably not want to work with you. Additionally, they will question why you want the property if it is so bad or if there are so many things that need to be fixed. Instead of piling on you should ask what they would do if the property is foreclosed? Ask if there is anyone who they could ask to borrow the money to stay in the house? Tell them about comparable properties in the market that are selling or have recently sold below their expectations. Your goal is not to scare them into selling but rather to point out all the flaws with the property or with their valuation.
- Time frame/consequences. Seller motivation usually drives their action. If they are late on their mortgage and looking to avoid foreclosure they are motivated to act by a certain date. If they are recently divorced and need to sell they may act a different way. Whatever the motivation is it is up to you to point out the necessary time frame along with the consequences for not acting. Distressed sellers often do not want to face reality and look to avoid the problem whenever possible. By telling them that a sheriff will come to their house if they don’t do something may wake them up and spur action. Again, you are not looking to scare someone into a deal but you want to plant a seed, so they know what to expect and what is on the horizon.
- Detail personal risk. Regardless of the personal benefit some sellers are reluctant to act because of the benefit to the buyer. Even though they may be avoiding foreclosure or selling for a profit, they don’t want to give the house away. During your “pitch” it is important to subtlety throw in how much risk you are incurring. You never want to run from the fact that you are an investor looking to make a profit. However, you also need to show that investing in real estate may not be like what they see on TV. There are costs that must be incurred and risks associated on every deal. You need to point out any work that must be done, a rough estimate on the costs and all the obstacles you will face in selling. A reasonable seller will accept the fact that you may make money, but it won’t be nearly as easy as they may have thought.
- What will it take to sell? In many negotiations the straightforward approach works the best. If you see a benefit for the seller, see profit for you and see a way to make a deal happen you need to put your cards on the table. Simply ask them what it will take to sell. Ask if there is a number they need to get or a timeframe that works for them. Ask what their reservations are and if there is any information they need to make them feel more comfortable. Many people do not like the back and forth of negotiation. If you can cut to the chase and eliminate it you will be surprised at just how many deals you can convert.
How you approach leads and deliver your message is an essential aspect of lead conversion. Remember these five important tips before your next big seller meeting.