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The Titanium Vault hosted by RJ Bates III
RJ Bates III, affectionately referred to as the Viking Wizard by his students, started his real estate investing career in 2014 after attending a real estate education program that put him $65,000 in debt. RJ contracted his first deal he found on the MLS and wholesaled it for a $7,500 assignment fee. That was the end of his former life and the beginning of his venture into becoming a real estate investor. Since that moment, RJ has become an influential figurehead in the real estate investing industry. He has successfully purchased and sold over 2,000 properties all across the USA including wholesale deals, rehabs, rentals, owner finances and short term rentals. One of his passions is being the host of The Titanium Vault Podcast where he interviews the top real estate investors and finally, RJ has won back to back Closers Olympics earning him the reputation as the King Closer!
The Titanium Vault hosted by RJ Bates III
What To Do When Property Sellers Want Too Much Money?
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If you’re new to my channel my name is RJ Bates III. Myself and my partner Cassi DeHaas are the founders of Titanium Investments.
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Closed on over 2,000 properties
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Back to back Closers Olympics Champion
Trained thousands of wholesalers to close more deals
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Today we're going to be talking about a small percentage of seller calls that you have, but it probably feels like it's almost all of the calls that you're having, the ones where you call the seller and you say, hey, mr and Mrs Seller, you still looking to sell that property that you submitted on my website? They say, yeah, you say awesome, how much you want for it. They say, yeah, you say awesome, how much you want for it. And they tell you this astronomically large number full retail or even above full retail price and then you're lost. You're like what are we doing here? What are we doing? Today we're going to talk about how you handle those conversations. Today we're going to talk about how you handle those conversations. All right, so you've spent your money, lead generation, you've got leads coming in, you're using the closer's formula, but you're frustrated because you feel like it's just not working for you. This happened the other day inside of Titanium University when a TU member submitted a live seller call review and it was a light bulb moment for me, which is hilarious, because that night, after his live seller call review, he made a post inside the group and he wrote I want to say today's implementation call was huge value for me and all of TU. I want to share a little recap of what RJ talked about. First and foremost, rj, the feedback of my call today was light bulb after light bulb moment. I do have one regret about sharing my call review dot, dot, dot. I wish I had done it sooner. Rj told me to unleash the savage, speak my mind and get straight to the point with sellers. Well, he did, and he got a signed contract that day.
Speaker 1:So let's talk about this situation where you call the seller and you're using the closest formula and you verify that they want to sell the property and then you ask them for their asking price and they give you that large number. What's the next step? The next step is well, tell me a little bit about what you got going on and use your own words the open-ended question. What are we trying to identify with that question? The seller's motivation. The reason why this is critical is because, if you're using the closer's formula, what you're trying to identify with their asking price and their motivation is which one of the four seller buckets does the seller fall into? Is it wrong price no motivation. Is it right price no motivation. Is it highly motivated wrong price or is it highly motivated, correct price? The reason why that matters is because when we identify, we know which path we need to take moving forward in the conversation.
Speaker 1:Now let's use this situation where the price just riles the gates, it's very obvious that the price is incorrect. This happens. The most common type of seller that you're going to speak to is incorrect price, but they're motivated. These are the ones that we have to get great at closing. That's not what I want to talk about today.
Speaker 1:Today, I want to talk about how do you handle the sellers where the price is incorrect but there's no motivation. Rj, you talk to me all the time about identifying the motivation. At what point in time am I supposed to embrace no and pull the plug? So we know the price is incorrect. We ask them tell me a little bit about what's going on. Maybe they give a sarcastic response. They they kind of dumbass you a little bit. Look, what do you mean? What's going on? What do you mean by that? Or they just give you the Zillow statistics. Well, it's a 1200 square foot, three bed, two bath. You know it's. It could use a little bit of work, but it's in pretty decent shape. It doesn't really help us. Here's the question that I want you guys to ask how did you come up with that price? Ask them point blank. See where it comes from.
Speaker 1:Now utilizing TU members' call the other day he did that. He asked the seller how did you come up with that price? And here is the meat and potatoes of today's takeaway. When they give you the response, you really need to stop everything that you're doing and focus in on the response that they're giving you and ask follow-up questions off of this, because here's what you're deciding. If you are truly embracing that you are the buyer in this transaction and they are selling, you need to identify if there's any motivation to sell this property for a discount, because if there's not, we need to get off of the phone. That's when we embrace no and we move on.
Speaker 1:So we ask the seller tell me a little bit about what's going on. They don't give you a whole lot. Seller, tell me a little bit about what's going on. They don't give you a whole lot. You say how did you come up with that price? If they say something along the lines of what's what other properties in the area are selling for, or it's what the Zestimate was, or something along those lines. We can go the path of educating them on property values, but we still need to know if there's motivation.
Speaker 1:See, in the scenario where the TU member asked, how did you come up with that price? She actually the seller gave a specific address of what she was using as a comparable property. Funny enough, the TU member, because he's been working on his comping and underwriting skills, knew that that property was not a comparable that could be used. The subject property was an older property, built in the early 1900s, and the comparable that she was using was built in the 2000s and was much larger. Now here's the issue. For whatever reason he didn't want to just speak the truth, which was I cannot use that property as a comparable. Your bill size, everything about it, is not comparable to your subject property, so we cannot use that inside of our calculations. It's actually just completely irrelevant to the market value of this property whatsoever.
Speaker 1:He didn't say that and because of that there ended up being about six to seven minutes inside of this seller call where nothing happened. He kind of asked some follow-up questions about condition. She kind of vaguely talked about the property and what she wanted to do with the money, but we weren't deciding, we weren't talking anything about price. We weren't talking anything about price. We weren't talking anything about motivation. We were just kind of loosely conversating. And that's where I asked him point blank Did you know that that cop could not be used? Yes, why did you not convey that to the seller?
Speaker 1:You guys, if we're talking to a seller and we know that the price is incorrect, at some point in time as the buyer in this transaction, you need to be brutally honest and say I'm not seeing how I can pay that for this property. Now put yourself in the position of anything else that you purchase in your life. If the asking price is too much, you don't have a problem saying the asking price is too much. Why, when we spend money on a lead and we're trying to acquire a property to wholesale, or even if you're not a wholesaler and you're a real estate investor, are we afraid to use the truth? When we're talking to a seller and just say how did you come up with this price?
Speaker 1:Well, there's a comp around the property that sold for $400,000. What's that address? She actually gave him the specific address. I can't use that comp. That's 100 years newer, 700 square feet larger. I would have to use these comps that are built in the early 1900s of similar square footage that sold for much less, and even then I would have to do repairs. I have to account for my holding costs and my closing costs and I want to make profit.
Speaker 1:This is how you educate a seller when the price is incorrect. However, you only want to take the time to educate a seller when you have identified that they are motivated to sell that property for a discount. So this is the situation where, when you are asking a seller and they're standoffish and again, this is a small percentage of calls, guys. So if you're finding yourself in this situation a lot there's probably a problem with the introduction that you're making. This is why I'm so bullheaded about the closers format, how we start the conversation, really setting the precedence for how this conversation is going to go.
Speaker 1:So let's start at the beginning. You have the lead. Hey, mr and Mrs Seller, I was calling about your property there at 123 Main Street. So let's start at the beginning. You have the lead. Hey, mr and Mrs Seller, I was calling about your property there at 123 Main Street. You're still looking to sell that property. Awesome, you are. How much are you looking to get for it $100,000. Sounds good. Tell me a little bit about what you got going on.
Speaker 1:Wait for their response. If it's a vague response and you're seeing that the price is incorrect, point blank, ask them right then and there how did you come up with that price? Let's open up the conversation. Your job early on is to get the seller to do more talking than you. If it's the other way around, the conversation is not going well for you and you have made a mistake. How did you come up with that price? Wait for their response and even if, then if they tell you and they're still standoffish, it is completely okay for you to ask them.
Speaker 1:I guess I'm just not hearing it, but I'm a real estate investor. Are you motivated to sell this property for a discount investor? Are you motivated to sell this property for a discount? Because otherwise there's not really any margin for me to purchase this. As a real estate investor, I have to buy a property that's probably physically distressed. Do some work, capture that equity. It doesn't sound like that's the position that you're in. You want to put them in a position where they're going to come after you and explain that they are willing to sell that property for a discount. Otherwise, that's where we embrace no and we move on to the next seller.
Speaker 1:In this situation, if you decide that they are motivated, that is where we would educate them on the numbers. This is where we would decide hey, here's what the after repair value is. Get them to agree to that after repair value. Then talk about the amount of rehab that's needed on the property to achieve said after repair value. And then you would talk about the holding costs, closing costs and profit. And that's would talk about the holding costs, closing costs and profit. And that's how we get to our price.
Speaker 1:Again, guys, this is a small percentage of calls. If you feel like it's a much larger percentage of calls, there's a problem there. Either one it's a problem in which the leads that you're purchasing maybe you're not getting enough with motivation, or it's a problem with how you're navigating the conversation, and this can be many things. It can be the lack of confidence, it can be your introduction, it can be your tonality. It could also just be the fact that you're not listening, or that you're afraid to speak the truth and to say I'm not seeing how I could spend $100,000 for this property based off of what you're telling me.
Speaker 1:Now I ask this to you, member why didn't you just say what you knew you needed to say? Why didn't you bring up the fact that that comp was incorrect? Why didn't you bring up that the price was incorrect? That you knew for a fact. You couldn't spend what she was asking for the property. And he said because I was afraid that I would lose the deal. That was his quote. My response to him was it's not a deal. You can't be afraid that you're going to lose a deal because the price is incorrect by telling the seller the truth.
Speaker 1:This is the power inside of the closers formula is that at any point in time you're embracing being the buyer, you can just speak your mind and say what you're seeing. How could I make that work? It doesn't make sense to me. What that does is it puts the seller back in the position of selling you on the property or just point blank explaining to you that they aren't motivated to sell that property for a discount, which is okay. Guys, the majority of your leads are not going to end up in a contract, so it's okay to be more efficient, to get to the point to where you're not closing.
Speaker 1:Now I'm not saying waste leads and just loosely embrace no because you don't want to have a conversation. Embrace no because you don't want to have a conversation. This is all based around your ability to listen and ask questions. Tell the truth. I'm not seeing what you're seeing. How did you come up with this number? How does this make sense for an investor to come in and purchase this if the property needs work? How do we make money off of this? These are all questions that you should regularly be asking sellers, and if you're not, there's probably a large percentage of your deals that were closable, that are not ending up in a signed contract. That's a problem. That's a problem. So, to recap, one have that beginning intro to your seller calls down pat, you know how it's going to go. Say it with confidence, truly embrace being that buyer.
Speaker 1:Hey, mr and Mrs Seller, are you still looking to sell 123 Main Street? Awesome, how much are you looking to get for it? Well, tell me a little bit about what you got going on. How'd you come up with that price? I can't use that comp. That doesn't make any sense.
Speaker 1:You guys have seen me do this thousands of times and I see the comments where you go, man. I can't believe the transparency. I can't believe he was willing to say that. You know why? Because I'm not afraid of missing out on a deal. You guys cannot be afraid of a seller walking away when it wasn't even a deal to begin with. If anything, it saves you time, effort and energy. Be real. Be energy, be real, be raw, be transparent, Be authentic. It's what they want anyways. They want you to be a buyer and they're seeking out authenticity. Our competition doesn't give it to them. If you do, I can almost guarantee you your results will get better. Let me know what you guys think in the comments. Make sure you give me some love on today's video. We'll see you guys tomorrow.