Tuesday, November 10, 2009


Okay, I had to use a ringing phone gif, yes!

This post is about what we do when prospects respond to our ads.

Before I illustrate a good script let me say I just read a lousy sub2 phone script. It suggested asking Sellers all sorts of threatening, qualifying questions.

Questions such as,
  • "What do you owe on your house?" which sounds to the prospect like, "How much equity is there left to steal?"
  • Or, "What are your payments?" which sounds to the prospect like, "I'm in FBI interrogation training, what's your problem?"
  • Or even, "Are you behind on your payments?" which sounds to the prospect like, "How can I take advantage of you in your most vulnerable situation?"

Yes, nothing quite like getting straight to the point with a vulnerable prospect. Why not just wave a mirror and a cross in front of them, like we'd do with Dracula? Same effect. Everybody runs!

What good then is a script if we're not using it to qualifying leads, somebody asks. Aren't we supposed to qualify our leads so that we're not wasting time on the "curious" and/or the "unmotivated?"

No, we're not. We just want appointments. Later we'll find out what's going on with the Seller's property once we know if they're ready to play ball.

What's the point of knowing all sorts of technical information if the prospect isn't ready for our type of deal yet? We can only discover that by meeting the prospects face to face. Yes...it's that intimate.

So on the initial call, all we want is an address and the name of one of the title holders. We actually don't need the name of any of the title holders except to verify the address we have is correct when we look up the property information.

So, if we just need an address and the name of one of the title holders then, why not just get that information via a website? Why have a prospect call us in the first place?

Websites are for siphoning off the truly unmotivated. Prospects that won't call, are the same ones that go to a website because they can't overcome their fear of "high pressure" phone sales pitches, and/or they need to be cajoled, educated, and otherwise warmed by what we have to offer on the web page. That's fine, but rarely will these folks be warm enough for our purposes. So what?

Well, the phone call itself IS the screening process. "Forcing" a prospect to dial the phone and call reveals that the prospect doesn't need warming up. He's already motivated enough to overcome his fear of the unknown and make the call. That's good enough for us!

At the same time, the unmotivated will also call us. "But wait, Jay, you said that only the motivated will call on the phone?"

No, I said phone calls filter out those that need warming up, or the mostly unmotivated. However, those that are just curious, and not really warmed up also call us on the phone.

I realize this may be confusing. If the unmotivated, but just curious call, and the motivated also call, then what's the use of a phone call to sift out the unmotivated from the motivated if both call anyway?

Well, glad you asked for clarification. The desperate callers are going to call us. They just do. However, they also rarely tell us they are desperate. They are usually coy about their situations. They don't want to sell themselves out as desperate, anxious prospects.

On the other hand, the curious will often play desperate anxious Sellers, so they can pump us for information, weigh their options, and then do for themselves what we are offering to do for them ourselves, if that makes any sense. They also represent the competition. I've called many "I Buy Houses" ads just to see what they have to say, but I'm not in the least motivated.

Meanwhile, I get calls from competitors all the time that will sound desperate, but their only desire is to smoke me out as a fraud, huckster, or the competition, but not as a solution.

Meantime, the desperate and the curious can sound identical on the phone. Neither group always shows us their cards. And asking embarrassing, threatening questions sets the tone for our future negotiations. We don't want to set a "bad" tone!!! Correcting a tone is hard work, once a "bad" tone has been initiated.

So, our method then is to sift out the motivated from the unmotivated with a face-to-face meeting. Man, that sounds time consuming, huh? Well, it's not too time consuming to make $42,000 in pure profit from a forty-minute face-to-face presentation is it?

I mean even if we had to make 10 of these presentations at forty-minutes a piece, that's 400 minutes spent, or $105 dollars per minute. Or about $6,300 an hour! That's better than most any doctors I know, and better than most attorneys.

So, when do we find out if the client is motivated or not?

Well, we find out at the front door. Our negotiations begin before we even step into the Seller's house. At the porch we ask the seller, "Are you ready to sell today if we can come to terms?" If the Seller responds with anything other than a solid "Yes", I will say, "I understand." and add, "When you decide that you are ready to actually sell, please give me a call and I would be happy to come back."

I turn and walk away (slowly). However, I always give the Seller a chance to correct himself. Not all Sellers will. So, I want to know the answer now.
It's that cut and dry. I've walked away many times.

What do Seller's actually say? They often say, "We're just weighing our options." Or "We're thinking about re-listing our house and wanted to see what you had to offer first.", etc. etc.

Uh, no, thank you. We're dealing here with a tire kicker. No tire kickers for us. We don't have time to educate the curious. We only want to deal with those who don't think (or feel) that they have any options, not those who are weighing them.

So we use the phone script only to get appointments, not prequalify prospects with embarrassing and/or threatening questions. We can get the rest of the information later in a non-threatening, elegant fashion that helps us better negotiate our deals without putting the Seller on the spot.

Meanwhile, we qualify our prospects in person because Sellers can't lie about their true motivations for more than 30 minutes. After that point we can either get down to business and make forty or fifty thousand, or walk away and make the same from someone else that is actually anxious, desperate and truly motivated.

Successful sub2 negotiations are born out of mutual trust, and a meeting of the minds, not hard-selling, strong armed negotiations. As a result, we can only successfully close on the truly motivated that we've developed mutual trust and credibility.

After all, is it really possible to strong arm a person into giving us their deed, letting us take over their payments, leaving them on the hook for their credit history on their old loan? No, is the answer.

The client has to want this, and know this is the best of both worlds for him; a painless, sure, and fast closing; a fair price; and restoration/protection of his credit. This can't happen by hard-selling the unmotivated.



MattJohnson said...

Very interesting post! Sounds like a LOT of driving, but I bet you have a pretty high closing ratio which keeps you from wasting too many car trips.

Sounds like you're getting close to launch date for your Sub-2 course; how's everything coming along? Am I going to see you on late-night TV anytime soon?

This could be you! J/K!!


Jay Palmquist said...

Thanks Matt!

I love the "babe mountain" pic! LOLOL

Yeah, I've got a 30% closing ratio.

Course has been slow in coming due to competing interests, but it's right around the corner.

I have a hard time seeing myself on TV telling people how to bypass banks by using their own loans to finance my deals!!!! HA! However, somebody's got to be first! :)