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The 5 Stages of Creating a Seller Relationship

Asking a property owner to agree to sell their property is an emotional process.

Many investors believe that the seller-buyer relationship starts when they put money down and sign a contract to purchase a property.

In reality, it starts long before that, by creating awareness, you, the investor:

  1. Understand their problem
  2. Have a solution to their problem
  3. Are trust-worthy

You are not selling the property owner on anything. You are not attempting to convince them. You are a problem-solver providing a service to solve the seller’s problem.

Perhaps the seller inherited a property they neither want nor know how to manage. Maybe they’re in a financial predicament and need to sell quickly. Or, possibly, they want to sell through a Realtor but lack the money and expertise to update and upgrade the home to market standards.

Before you solve their problem, you have to reach them.

To get there, you must understand how human beings take in information, understand their options, and ultimately trust someone to help solve their issue. You want to put the seller into a position to make a solid decision. Nothing more.

First, let’s look at the three types of audiences.

Cold

The seller knows they have a problem but has no clue about any solutions to their problem, in the marketplace, beyond calling a Realtor.

Warm

They know about professional real estate investors and the concept of buying a house as-is for cash but have no idea who you are, what value you bring, or that you can solve their problem.

Hot

The seller is aware of their problem, conscious of a solution, and aware you can solve their problem quickly and easily. Now, let’s get into helping a seller move from cold to warm and to hot.

The Law of Seven Touches

30 years ago, the average attention span of a human being was about 20 minutes. With the advent of the Internet, social media, 24-hour news cycles, and instant gratification proliferating our lives, that time frame is now just seven seconds.

Seven. Seconds.

You need to consistently reinforce your brand, value proposition, and ability to solve their problem. To help your prospective property owner/seller understand and make a decision, they need to know:

  • who you are
  • what value do you bring to their situation
  • how you will solve their problem
  • what is in it for them
  • and what is in it for you

That means marketing touches…and a whole bunch of integrity.

To make that connection with your seller, you need to interact with them at least seven times. That means they need to see:

  • Your logo
  • Your brand message
  • You value proposition
  • Your market approach
  • Your value system
  • How you’ve helped others in a similar spot
  • Your ability to understand their problem
  • Your ability to solve their problem

Few people are willing to be trailblazers. They need to know you are capable and worthy of their trust. They need to understand these things before they move from being unaware (cold) all the way to agreeing (hot) to sell their property to you.

The good news, for you (and me), is most real estate professionals give up after the second attempt to contact the seller.

Here are the steps you need to navigate with your potential seller, depending on where they are in their journey (cold, warm or hot).

The Five Stages Of Seller Engagement

Unaware

The property owner has no clue who you are, whether they can trust you, nor your ability to solve their problem.

Aware

The seller may have heard your name once or twice but does not connect their problem with your trust-worthiness, nor your ability to solve their problem.

Like

The seller has been introduced to you in some way. They like what they’ve heard or read or seen, but they need to learn more before they engage in any serious way.

Trust

The property owner now understands who you are, what value you bring to the situation, how you can solve their problem, and they buy into letting you help solve their problem.

Agree

The seller understands how you’re going to solve their problem because you’ve given them a straightforward, clear, and transparent written document that walks them through the process. They understand their options, what’s in it for them, and what’s in it for you.

Congratulations you probably have a deal.

Strategies To Create Awareness and Demonstrate Trust-Worthiness

  1. Testimonials From Your Previous Property Sellers
  2. Social Media Posts
  3. Blog articles
  4. Explainer Videos
  5. Direct Mail Postcards / Letter Campaigns
  6. Permission-Based Email and Texting
  7. Networking With Local Attorneys, Accountants, and Property Managers

You want to put yourself out there. Talk about how you solved other people’s problems. Be vulnerable. Be transparent.

At my company, Clark St Properties, we provide our sellers with:

  1. A Statement Of Understanding of their situation
  2. A list of their options
  3. Our plan to upgrade the property
  4. Our budget to upgrade the property
  5. The timeline to upgrade the property
  6. The value of the property once we’re done (After Rehab Value)
  7. Our best & final offer. (Yes, right from the start)

This proven process enables Clark St to flip 20+ houses and acquire 5+ apartment buildings (6–20 units each) a year.

We’ve had several sellers and more than a few investors tell us, we’re giving too much information. We couldn’t disagree more. The last thing we would ever want is for a seller to think we held back information to gain an advantage in our negotiation.

Instead, we want sellers to understand what needs to happen to maximize the value of their property, then decide if they have the time, resources, and energy to make it happen.

  • Sometimes…they do, and we part friends
  • Sometimes…they don’t, and we acquire the property
  • Sometimes…they don’t, and we refer them to an exceptional Realtor
  • Sometimes…they want to think about it. So we give them a standing offer with no expiration.

Ultimately, we want them to make a clear-headed decision without the stress of artificial deadlines or from a pushy Acquisition Manager.

We are not interested in convincing the seller of anything. Neither should you.

Conclusion

Take these steps to understand your seller’s perspective, figure out a solution, and build genuine trust with your seller. When you do, the relationship dynamic will shift from trying to convince them to sell, to the owner coming to you and trusting you to make their problem go away.

This creates a win/win solution.

That is the ultimate goal of everyone here at Clark St and of real estate investors, in general. At least, the good ones.

Happy Investing!

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About CTREIA

CTREIA is the largest real estate investors & apartment owners association in the Northeast. We provide motivation, networking, funding, insurance, and coaching for investors in Connecticut and throughout the US.

If you are interested in learning more about becoming a CTREIA member or are interested in learning how to become a real estate investor, go to CTREIACoaching.com. If you’re interested in funding your deals, go to CTREIAFunding.com. If you’re interested in protecting your assets, go to CTREIAInsurance.com.

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Dad, Husband, Coach, ‘Nova BBall fanatic w/an addiction to real estate. Founder @ Clark St Holdings & Co-Host of The Real Estate Underground podcast.

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Ed Mathews

Ed Mathews

Dad, Husband, Coach, ‘Nova BBall fanatic w/an addiction to real estate. Founder @ Clark St Holdings & Co-Host of The Real Estate Underground podcast.

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