Talk to a dozen salespersons and ask how much they enjoy cold calling. You’re not going to get much in the way of positive responses. It is human nature to avoid rejection, and cold calling is inviting a lot of rejection into your life. The good news is that the real estate wholesaler is not selling anything. Quite the opposite, you are providing a service that is a win-win for both sides of your transactions.
You help a motivated, possibly distressed seller to get out from under a home they no longer want. It could be for several reasons from pending foreclosure to low equity and a need to move for employment. You may be helping an estate representative to sale a home to pay a deceased’s bills and provide for heirs. You could just be helping a bank to unload a negative on their real estate assets chart.
As you read the mistakes made by many cold callers, there will be some examples in the real estate wholesaling world. Keep in mind that this isn’t your hobby; it is your business that helps both ends of your transactions to get what they want. And forget the “scripts.” If you are reading a cold calling script, the prospect knows it.
Mistake #1: Not making sure you are talking to the decision-maker
It is encouraging to find an amenable and seemingly interested party on the phone when cold calling. The mistake would be to assume that they are the individual who can make a decision to sell a home and have the legal authority to do so. Using the most common real estate lead list prospects, who would that be?
Individuals include joint owners but not businesses. They could be tired landlords, absentee owners not living in the home, high or low equity motivated sellers, or empty nesters. You may even have to skip trace to locate an owner.
Wholesaler’s approach – As early in the conversation as possible, in conjunction with telling them that you are seeking homes for investor buyers, ask if you are speaking to the owner.
Then there are the corporate, legal system, or business owners of real estate. Those would include trust administrators, estate representatives, corporations, banks, and other institutional real estate investor. You will know from your lead acquisition strategies which.
Wholesaler’s approach – You can be totally upfront in this case. Still be businesslike but say that you are representing buyers and would like to speak to the decision-maker for a sale.
Mistake #2: Asking yes/no type closed questions
Other than possibly the “are you the owner” question, asking questions during cold calls that can be answered with a simple yes or no closes the discussion with the answer. Rephrasing the question such that they may add information or share thoughts or feelings can help you to qualify them or to understand their needs better.
As an example, you have some of the financial information about the home in front of you when you make the call. You know that you are speaking to the owner late on payments, in default, but not yet in foreclosure. You probably have the loan amount and know how many payments they have missed as well.
Wholesaler’s approach – Instead of asking them if the loan balance and late payment data you have is accurate (yes/no), you may say something like “I saw a notice (lis pendens) about your home posted by the lender and wondered how much they are hassling you.” This leaves it open for them to express how motivated they may be and add any details beyond balance due that they may decide to share.
Mistake #3: Talking more than listening
It is only human that the better you are at what you do, the more you want to share that with your prospect to work toward a deal. The key here is to remember that you are a businessperson who provides a service that matches sellers with investor buyers. You are not selling the features and benefits of a product. Again, the mindset must always be that you are a business providing a service that the seller wants and needs.
Without listening, you won’t be able to suss out the main reasons that turn just a lead, into a motivated seller. The most you have to say is in introducing yourself and what you do to help sellers in the current seller’s situation. You don’t have to give them details. You should immediately go into consulting mode, asking questions about how you can help.
Wholesaler’s approach – Once you know the seller prospect understands what you do and has some expectation of how you may help them, you begin to ask questions. You may even start to show your value by asking for some details to see if they really need your services. By showing that you are there to help, not just do a deal, you risk only a little time to gain a huge amount of trust.
Mistake #4: Going for the close too soon
One of the longest existing sales training systems is the Sandler Selling System. It was introduced in 1967 and is still a very popular sale method.
The base concept is one of “consultive selling.” You are there to consult, not push. Instead, your job is to uncover their “pain,” or need for your services. Individual sellers usually have obvious financial needs. An estate representative’s pain may be pressure from heirs to get a property sold. A foreclosure asset manager has a set of numbers to meet.
Going for a close too soon during your cold calls would mean doing so before you have uncovered all their pain before you know what it will take to get them to the closing table. The key is to take whatever time it takes.
Wholesaler’s approach – You keep working with them until you have uncovered all their pain/needs. At that point they are likely to ask if you can help them to sell. Even if not, you should know if there is a possibility of enough motivation for you to take the next deal step. Sandler would say, at that point ask them something like “If I can find a buyer that can get you out from under this property, are you ready to sell?”
Mistake #5: Not setting out clear next steps
At some point in your cold calls, your prospect may be getting close to a decision and ask what the next step would be if they want to sell. If they do not, and when you think it can help, take them through a quick overview of the process. For the homeowner, it is reassuring to hear what is going to happen and when.
For the other business type sellers, banks, etc., you may be asking them how they wish to proceed, as they will have a process. Whichever directions, get the steps clearly set out.
Wholesaler’s approach – With the homeowner, after you have their needs, and if they have not asked for action, the fact that they are still on the phone means they want more. Tell them what moving forward if they choose to, would look like, step by step. If an institutional or legal system buyer, come to an understanding with the decision maker as to how the process will proceed.
Mistake #6: Not taking advantage of the best tools for your goals
The great news here is that technology provides you with more tools than ever before to be totally informed about a property before the first phone call. The tendency for many, particularly new wholesalers, is to use only the free online real estate tools like Zillow to gather information. This can be effective but remember that every competitor is doing the same.
Supplement free resources with paid real estate specific database search results to expand your markets and explode your deal-making abilities. If used properly with excellent follow-up, they will far more than pay for themselves.
Wholesaler’s approach – Before making the first cold call, have a complete value and characteristics layout for the property. Have it mapped and know the surrounding neighborhood. Have comparable properties sold data, as you may need to talk to the prospect about their property’s expected market value. Have a printout or screen display of current and previous mortgage information as well as assessed value and property tax information. This helps you to verify what the prospect says as well as to answer their questions.
Mistake #7: Too much about you
In previous cold calling mistakes, you read about asking closed questions and talking more than listening. The “consulting” approach and getting the prospect seller to tell you what they need, and their motivation are effective approaches.
In those processes you will at times be telling/showing them your ability to help them to reach their goal of getting out from under their home. The key is to do so without too much “me or I.” When you know their situation and they have shared their motivation, tell them how your business goes about helping sellers to move on by using a national database of investor buyers.
You communicate that you do serve the buyers by finding them homes, but your service is more valuable to sellers. Having multiple potential buyers allows selection of the best buyer for the seller’s financial and timing needs.
Wholesaler’s approach – When talking about you and your services, make it about how it is focused on the seller and getting them out of their home in the best way possible. Talk about the resources that deliver the right cash buyer for their home.
Mistake #8: Not taking advantage of voicemail technology
Some cold callers consider arriving at the prospect’s voicemail as a negative, not getting to “pitch their script.” A lot here is about engaging the prospect in more of a conversation about their needs and motivation. It can be frustrating to have your call screened or just have trouble reaching a busy person. At some point you must speak with them, or it is a wasted lead.
Create voicemail scripts and get good at making them be natural. Target each message to the prospect type and motivation. Go straight to how you can help and keep it short. The initial voicemail gets past the intimidation people often have when receiving a cold call. They can listen and not have to talk.
Some cold callers have found that they get more closings when they use a well-crafted voicemail for first contact. Even better, there is technology that takes it to the next level, practically ensuring that leads call you instead of you calling them. This technology, Ringless Voicemail (RVM), is a pre-recorded message that goes straight to their voicemail without ringing the phone.
Wholesaler’s approach – Create short and targeted voicemail campaigns, so if no response from the first, the second continues your services pitch. Wait for great results.
Mistake #9: Not following up
Not following when cold calling up in real estate covers a lot of possible scenarios. And, at some point it is just time to give up. However, if they are not answering the phone and your voicemail campaign is getting no results, send them an email or try texting. The texts would be carefully crafted short messages that make it clear that you have buyers for their home, and you would like to talk to them. Do not overdo either voicemail or texting, as you still have options.
Try an email if you have a valid address. This will allow you to better set out how you can help them. An email response will tell you their preferred method of communication, at least early in the process. There is also always the regular mail approach. Especially with older homeowners, as they may not be into their phone or computers. Mail may work best from the start. Sometimes email or direct mail works better with trust or estate administrators as well.
Wholesaler’s approach – Develop a specific contact and follow-up plan for each prospect type you are targeting. Mix and match contact methods based on the prospect type and measure results for changes.
Mistake #10: Not listening to their objections
Whether it is the classic “objection” or simply a concern or expression of doubt based on their current knowledge, there are going to be things that come up that are hesitations on the part of the prospect. Generally, for corporate, bank, trust, and estate sellers, these are mostly related to the financial aspects. For homeowners, there can be resistance or hesitation based on many factors, and often what you hear is not their real issue.
One effective strategy when real estate cold calling is to follow up an objection type of statement with a “why, how, or what-if” question. If a seller says that they cannot see a way to sell and pay costs and since it is a credit hit anyway, they may as well let the home go back. A “what if” question about finding a buyer with cash and no closing costs could get a positive answer of, if you can do it, get on with it.
Wholesaler’s approach – The wholesaler develops the how, why, what if questions for each anticipated objection. Use them to help the prospect to sell themselves.
Mistake #11: Being unclear about your value
The most important thing to remember is that all the stuff that you know about real estate wholesaling that allows you to do what you do is often somewhere between not understood and complete gibberish to your prospect. If the only value proposition that you present to your prospect while cold calling over and over is that you can get a buyer for their home, you can often fall short of a deal.
Presenting your value with a lot of financial data, like talking to them about the numbers you must meet to get a buyer is not productive. Sure, you need the numbers, but you want to present your value as the resource to get them free of the home and its burdens and moving on with their lives.
Wholesaler’s approach – Do a thorough analysis of your value to your prospects from their point of view. Tailor all your follow-up based on continually reinforcing your value. You have the resources and tools to get them out from under the home and its burdens. You are not just a middle-person for profit. You are a problem solver with tools to help.
Mistake #12: Not fine-tuning your lists
Fine tuning lists is about segmenting your real estate lead lists by prospect type. The tighter you get your criteria to get prospects grouped together by their needs, the better you’ll be able to address those needs during cold calling. Your searches with paid resources does most of this for you, as you are searching by type:
- Absentee owner
- Abandoned property
- High equity homeowner
- Low equity homeowner
- Empty nesters
- Trust owned
- Corporate owned
- Seller financed
Most of these lists for real estate wholesaling are well-segmented just by the owner type. Someone could assume that motivated seller leads such as absentee owner and abandoned property searches would have the same objective. After all, if the home is abandoned, the owner obviously does not live there. However, an absentee owner could be a tired landlord who wants to sell. Someone who walks away from an empty property is likely to have very different motivations.
Wholesaler’s approach – Look at every segment to see if there could be reasons to segment it further. An example could be based on area. Several of these segments could have prospects with differing motivations. Perhaps a property owner abandoned a home in a declining area, a different selling situation, etc.
Mistake #13: Failure to track, measure results, and act on data
Every facet of your wholesale real estate operation lead identification, segmentation, follow-up, and conversion should be measured as best you can. You cannot fix something unless you know it is broken. You also cannot improve results unless you can compare them.
Compare the results of your real estate cold calling, voicemail, email, text, and direct mail follow up with prospects for how far each one goes in your process. Also, do not just compare deals to closing, as some could never have been deals simply because the numbers did not work. Know how many did not become deals due to prospect decisions versus numbers. This helps you to separate your follow up activities results from ‘just not deal’ material.
Build some type of system to take each lead you decide to work and track every step of the process, the results of the step, etc. Do it with some type of easy entry database system, or even a spreadsheet if easier for you.
Wholesaler’s approach – Choose a timeframe, weekly or monthly perhaps, and go through your activities to look for patterns. When you see them, you may find that you want to change something to see if it works better. Perhaps you will find that ringless voicemail is better than texting, as an example.
Mistake #14: Not keeping the goal in mind
While you might be tempted to hard-sell the property owners on selling their property immediately, your only initial goal should be to schedule a simple appointment.
When you shift away from constantly talking about your business as the solution in an attempt to sell, and focus instead on just that easy first step, you’ll find more success.
Wholesaler’s approach – Allow for a relaxed conversation, where you guide the seller towards making an appointment in a non-pushy way.
The most surprising conclusion to many cold callers is that cold calling can be quite productive if you avoid mistakes. Leverage technology, be a consultive resource, and constantly evaluate how you are doing. Learn from those mistakes, and do not be afraid to try things or change your approach.
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CRM, motivated seller lead lists, text, email, and ringless voicemail marketing automation campaigns, lead capture websites, robust analysis tools, and pro property reports.
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