An often-heard concern from beginning or part-time real estate investors is: “I am making great offers, so why am I not getting the deals?”
In answering that, let me start with a quote from the late motivational speaker Zig Ziglar that I find to be so true and that has always stuck with me. He said, “You can have everything in life you want if you will just help enough other people get what they want.”
This is very important to recognize and understand, whether you have done a deal or two or maybe you have done a hundred deals, or maybe you are just getting ready to do your first. Think about it. As a real estate investor, whether you are buying a house to rent and hold, or buying a house to fix and flip, or buying a house just to quickly wholesale out to another investor, you are the last one who is going to get paid. You are in effect helping a whole series of other individuals get what they want before ultimately you’ll get what you want in that transaction.
You’re at the end of the line
Think about it. If you buy a house to fix and flip, that seller is going to get paid first, and if there is a Realtor involved, he or she is going to get paid, and the title company that does all the title work is going to get paid, and the surveyor who surveyed the property is going to get paid, and the inspector who inspects it is going to get paid. There will be a myriad of contractors that you might hire to fix it up, and they are going to get paid. There are going to be property taxes that will have to be paid when the property is sold. There is insurance that you are going to have to pay. There will be principal and interest payments you are going to pay while you own it. There will even be utilities you are going to pay while you own it.
When you sell that property, first you are going to be helping all of these different individuals and entities get what they want—which is payment—at the end of the day, at the end of the transaction, at the end of three, four, five months, whatever it takes. Then, and only then, do you, the real estate investor, get paid. You are last in line. As I said, whether it is a buy and hold, or fix and flip, or a wholesale deal, you have to help a lot of different people get what they want before ultimately you can get what you want.
The seller is the most important person in the transaction
So who is the most important person in that chain of events and individuals involved in this transaction? It’s the seller, and it’s your responsibility to serve that seller. When you stay grounded in this principle that your top priority as an investor is to serve that seller, your business will prosper, and so will you. When you make those great offers, you will get the deals.
It very well may be that the one thing that has been holding you back from getting those deals is your failure to recognize or appreciate that success is not always about the number. Rather, it depends on you and your ability to serve that seller and ensure he or she gets what is wanted—payment—in order for you to ultimately get what you want.
Within that context, there are three key things to remember when dealing with the seller and providing that service to him or her.
This is a BIG deal to the seller
First, that real estate transaction you are seeking is a big deal to that seller. Think about it. As an investor, you do deals all the time. The frequency will vary, depending on whether are a part-time or full-time investor. Some of the larger investors are doing four, five, six, 10 deals a week. Some of the others are doing one a week or one a month. But I guarantee you, you are probably involved in those transactions on a much more frequent basis than your seller is.
Think about it: the sale of that seller’s house is probably the largest financial transaction of his or her life. That house is probably the largest financial asset that seller has every owned or ever will own. So it is a big deal to that seller. It is a huge financial transaction for that seller, a huge financial asset for that seller, and a very infrequent, uncomfortable and perhaps scary endeavor for that seller to sell that house. That seller doesn’t do it every week, or every month, or every quarter like you do. Selling a house may be something that seller will do only once, twice, maybe three times in his or her entire life.
As investors who do these transactions so frequently, we often forget how big a deal it is to the seller. And if we blow through a transaction and move quickly, that is quite likely to come across to that seller as very uncaring or even disrespectful. You have to make sure that you serve that seller and cater to his or her perspective that this—selling that house—is a big, big deal. This goes back to something I have said in the past: it’s not always about the price you pay, it’s about convincing that seller of your ability to execute and to serve him or her ethically, professionally and correctly in that real estate transaction. Or said more simply, it’s about the service you provide.
There likely is some type of hardship behind that door
The second key thing to recognize is that there very likely is a hardship behind that door. It could be a financial hardship, it could be a physical hardship, or it could be an emotional hardship.
There is a very good chance that financial problems could be the reason that you are approaching that house, and approaching that seller, or that person responded to your mailer, or your website, or whatever marketing you used. That person may not be selling that house because he or she wants to. It could be out of necessity. Perhaps the maintenance costs are no longer affordable. Perhaps the seller has fallen behind on the mortgage payments or on taxes. Or perhaps there is something completely unrelated to that house that has put this person in a financial strain, such as job loss.
Or, behind that front door there might be a physical hardship. You will find this very frequently in our business. A lot of the homes we buy are from the elderly. They have lived in the house a long time. The house is now too much for them in so many ways. It’s too big, it’s too expensive, or it’s too costly to maintain. Perhaps it doesn’t suit their physical needs in terms of their mobility and comfort. There are a lot of different reasons, and a lot of different physical aspects that could result in that seller wanting to—or needing to—sell that house.
There could be emotional hardship for that seller. I can tell you from my personal experience as a real estate investor who has bought well over 100 homes, that is quite often the case. It could be that a death of a loved one has caused the need to sell the house. There could be a painful divorce. Or there could be a traumatic incident associated with the house or associated with that person’s life that’s forcing him or her to sell that house.
Whether it’s financial, whether it’s physical, or whether it’s emotional, I always say, it’s rarely about the house. Your purchase of the house is simply a solution to solving that problem, solving that hardship and serving that seller. And you need to recognize the problem or hardship, and deal appropriately with the seller.
We are in a ‘rinse and repeat’ business
Finally, the third thing you need to remember as a real estate investor in your mission to serve and ultimately satisfy the needs of sellers and grow your business, is that we are in a “rinse and repeat” business. I have talked about this in the past, and I have referred to it as a transactional business. Unfortunately, we can’t just buy one house and then hang it up and go retire on the beach. We have to buy many houses to keep our business models going. We can’t do just one deal. We can’t just have one customer. We have to have a lot of sellers as customers and we need to buy a lot of houses over time in order to build our businesses.
What this means—because it’s such a transactional business, because it’s such a “rinse and repeat” type of a business—your reputation as a real estate investor precedes you. You cannot be a one-hit wonder with a single deal that you knock completely out of the park, then retire and live the lifestyle that you want to live. You have to do many, many deals and your reputation is going to be critical to your ability to find those deals and close those deals. Service—and your willingness and your ability to serve others, specifically that seller—is what is key to getting those deals over and over and over again.
I’ll tell you that as a real estate investor and owner of a HomeVestors franchise here in Dallas, one out of every three houses I buy comes purely from a referral. No direct advertising is done on my part. It’s purely from a referral from a previous seller that I dealt with. And with some of those, I didn’t buy their houses, but they referred me to someone else who wanted to sell, and I ended up buying their house.
Once again, it’s not always about the house, but it is about the service and your ability to serve others. When you build a reputation as someone who serves others, that will be the fuel that’s going to ignite your business, and it’s going to keep your business running smoothly, growing and sustaining over time.
So remember, it’s not always about the house. It’s rarely about the house. It’s about the seller. This is a big deal to that seller, and you need to empathize with that. It’s about the situation. It’s the hardship or the problem that you are there to serve and solve. It’s about the service, your ability to “rinse and repeat” and hopefully get a referral.
I stress once again the Zig Ziglar quote: “You can have everything in life you want, if you will just help enough other people get what they want.” Keep that in mind in your role as a real estate investor and a servant to your sellers.
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