Real Estate Acquisition Process: Qualifying The Seller
You have done a great job getting interested sellers into the top of your funnel using different marketing strategies, congratulations. Once these sellers enter your sales funnel, the hand off between your marketing team and your sales team will occur. In order to know if the sellers that have entered our funnel are qualified leads for us to pursue, we must qualify these leads to determine if we have a hot, warm or cold lead. By understanding the reason the seller wants to sell, the price they are looking for, the condition of the property and when the seller is looking to sell, we will know if we have a potential deal on our hands right now or this is something we are going to have to push through our funnel.
When it comes to qualifying a seller there is specific information that we will need from the seller in order to determine if this specific seller is a lead or not. To successfully qualify a seller, obtain the proper information and delegate this task to another person, we must create a script to work off of to ensure that all of the important questions are asked and answered. Your qualifying script will be very straight forward and it's intent is to create a conversation with the seller around specific questions that you need answered. When you are working through the qualifying process with a seller, you do not want to sound like a robot but want to be able to have a conversation and build a relationship with the seller in order to have them build trust with you and your company, since this is the first touch point you will have with them.
As we stated earlier, we want to eliminate all of the fluff from our script and only ask questions that will allow us to determine if we should move to the next stage of the sales process which is a face to face appointment at the property. We see it a lot where investors have a 20 page script full of 100 questions that simply bore a home seller which results in a negative first impression. If we just ask the most important questions that will allow us if the lead gets to an appointment then we can ask the rest of the questions face to face where we build more of a relationship with the seller.
Your introduction to your script will differ based on where your lead came from or is coming from. For instance, if you are receiving an inbound call from a direct mail piece your intro will differ compared to if you are making a cold call to a seller out of the blue. This is where your marketing team and sales team need to communicate to make sure your sales team has access to this information. To start the script, we always want to gather the personal information from the seller.
Can I have your first name and last name please?
Can I have a phone number where we can best reach you?
What is the address to the property you are calling in regards to?
As you can see these are straight forward questions but you want to get to them being conversational with the seller. Once we have there personal information, we move to one of the most important questions for us to see if we should continue with the seller or move in a different direction.
Is the property currently listed with an agent?
We ask this question next, because this is the threshold for our VA's to know if they should continue with the script or move to close the call. Since we are looking for off market deals and we already have access to all listed properties, we do not want to continue with the script if the property is listed with an agent.
If the property is not listed with an agent, we take the call directly to the motivation and urgency to sell the property.
If you don't mind me asking, what is the reason you are looking to sell?
Ok, thank you. If we can get you an offer quickly, what would be your time frame for selling?
Extra question: Is the property currently occupied? (the reason that we ask this question is because if the property is vacant obviously there is much more motivation but also if we decide to wholesale the property, it is a much smoother transaction than if it is occupied by tenants or the homeowner) If the property is occupied by tenants, make sure you gather the information on the tenants leases and the gross rent they are paying monthly)
These two questions will be great indicators as to if we are going to be setting an appointment or not for this specific lead. If these are positive responses we then transition to the overall condition of the property.
This is the part of the script where people tend to spend way to much time on, our goal here is to just get an opinion of the overall condition of the property. (most of the time, the sellers are not going to tell the truth about the condition or see it from a different lens than us investors) We want to get an understanding of the condition of the mechanicals or large cap expenditures on the property.
Roof - Do you know the approximate age of the roof?
Foundation - Are there any problems with the foundation that you are aware of (cracking or shifting?)
Electrical - Is the electrical circuit breakers or fuses
Plumbing - Are you experiencing any leaks in the property?
Water Heater - Do you have an approx age of the water heater?
HVAC System - Do you have a furnace/ boiler or electrical heat? What is the approx age?
Windows - Do you still have the original wood windows or have they been updated to vinyl?
As you can see again we are asking very straightforward questions to get the overall condition of the major components to the property. These questions will help you make a better business decision on an appointment once you compare the price point they are asking to the actual after repair value on the property. Once we gather our information on the condition of the property, we will transition to the finances on the property.
Knowing the financial status of the property is really the most important aspect of the script. We save this portion of the script until last because we have now had a chance to build a relationship with the seller throughout the course of the call. This will give us a better chance of getting the seller to open up to us about this more personal information attached to the property.
Mortgage - Is there a mortgage on the property? If so, are you up to date on the payments? Do you know the approx balance left on the mortgage?
The reason we need to know the answer to this question is because it will give us the lowest price possible that they could take for the property. If the property is free and clear or there is very high equity, our team will be going on the appointment no matter what.
Back Taxes - Are the taxes on the property current? If not, do you know approx how much is owed on the property?
This question honestly just gives us a look into another tier of motivation. If the owner owes delinquent property taxes, there is usually additional distress attached to the person.
Asking Price - Do you mind sharing how much you think you need to sell the property for?
An answer to this question, will give us a starting point for negotiations and better idea of how good the deal actually is. If the seller is looking for full retail value, it is not a good sign of motivation but if the seller is looking for half of what the ARV is off of the bat, we know this has the possibility of being a promising lead.
If you make it through the complete script with the seller, the conversation should be no more than 10 minutes. However, in this industry, you will get some talkers who want to tell you there whole life story. A good tip is the more they are actually willing to talk and tell you, the more motivated the seller actually is. Once all of this information is obtained, it should be stored in the lead sheet in your CRM so that it can be reviewed by and added to by your team whenever they need.
As we all know, a deal is not typically derived from the first touch point, but it will take continuous follow up on the part of your team. Your team will use your CRM to document important notes from each follow up to push the seller along through the sales funnel to appointment, offer and eventually a close.