This post is about selling techniques taught by Rick Otton.  While not all rent-to-buy operators would use these techniques, it is likely that they are used widely in the industry. Many – perhaps most – of the people in this industry have done Otton’s training at some stage. Even those who haven’t are often taught or mentored by Otton students.

There is little doubt that Otton is a great salesman. He worked in the early days with body language expert and author, Allan Pease. He has written books such as ‘How to Handle Objections’, and ‘Killer Seller Responses when Negotiating a House for £1.’ and contributes to the workshop and home study course ‘The Habits of Master Persuaders’.

Otton builds rapport with his students – who pay thousands of dollars to attend his seminars, and some continue to pay many thousands more for his mentoring years later.

In one of his videos, a number of past students are very emotional about the difference that Otton’s training has made to their lives. However, I can’t help wondering whether the transformation is one where some students who have been doing it tough – under financial pressure themselves – feel they have now gained some control because they are now able to persuade others who are in a desperate financial situation and make money out of others in hardship.

Hearing Otton talk about channeling people into the direction that you want and controlling people’s responses, makes me wonder whether any of the hundred or so seminar attendees question why this is necessary if the strategies are, as he claims, “win-win”. Do the students ever question the morality of what he teaches? Given the feeling in the room, and what appears to be idolisation of Otton, I suspect not – at least not at his seminars.

Selling Psychology

High pressure selling techniques appear to be very similar regardless of the product, and the selling techniques Otton discusses online, are familiar to me.  Research by Consumer Action Law Centre and Deakin University examined the psychology behind in-home sales of mathematics software. The report, “Shutting the Gates: an analysis of the psychology of in-home sales of educational software” identifies that key factors influencing the consumers were trust, scarcity, reciprocity, the activation of anxiety and desire to be consistent with previous responses. (page 5).  Using techniques that employ these elements, consumers can be led, step by step, through a series of “gates”, which close off their options (p116).  Otton refers to a ‘funnel’, and also uses the term “shut the gates”.

The rent-to-buy context

Otton commonly refers to “motivated” sellers, which appears to mean home owners who are desperate to sell – often because they are in financial trouble. In one video he says he likes to ‘harvest’ motivated sellers, through liquidators, debt consolidators and mortgage brokers.

Getting sellers to agree to a deal, which may not be to the seller’s advantage, is a key part of the strategy. Otton claims to teach students to make money from property with “no money down”, which means that the students need to find buyers who agree to the student arranging sale of the property with delayed settlement, and to the student taking a profit out of the deal. (I have written about how this works here).

There is nothing illegal per se, about using techniques to build rapport, or to convince someone to sign a contract (however if any part of the spiel is misleading, for example the number of other interested buyers, this could be used in a civil action or prosecution). Some readers may find this post and the transcripts instructional – they do give some effective tips on selling techniques. However, others will feel that they are unethical, particularly given the financial situation of some of the sellers, the unusual nature of the contracts they are asked to enter into, the risks buyers and sellers face, and the fact that Otton students may even try to control which solicitor the buyer or seller goes to for advice.

Keep in mind that while Otton sometimes talks to his students about negotiating with estate agents, it is the potential buyers and sellers who are the most vulnerable, and who will have to agree to the deal if the student is to make any money.

Below are some excerpts from videos and podcasts featuring Otton and some of his students discussing selling and negotiation techniques.  You can see some complete transcripts here.

Persuading estate agents, sellers and purchasers

In one video on “negotiation” and the “sales cycle”, Otton refers to:

• Shifting the power in negotiation: “The set up is, the seller takes the position ‘I’ve got the gold and all you lemmings want it and I’m going to decide which of you lemmings is the most deserving to get my gold’, where we’ve got to change that…”
• Considering the “psychological position the seller is in” and increasing the seller’s anxiety. “If I’m in no hurry, this thing just sits and sits. So who will become more flexible, the seller or me?” “Do you think the seller is sleeping or is he lying in bed wondering ‘is he going to buy the house or not?”
• Building rapport, spending up to an hour or more complementing their garden and house, “God damn, look at that! Wow, and are they year round plants or are they seasonal?”;
• “[Questions] limiting where people can go. I’m actually helping to direct them in a particular direction”
• “By direct questions, you start to close down people’s choices.”
• “It limits their answers; I now start putting controls on their responses”.
• “When anybody puts what’s called a ‘hook question’ it has already answered it for you, and it’s already virtually pre-determined the answer”.

In a podcast about dealing with buyers, Otton discusses:

• Shifting the power. Otton says before he agrees to a potential buyer viewing a property “No no, you’ve got to understand, you have to qualify for this thing, and it’s kinda like, I don’t really care if you do or you don’t, but no-one’s seeing my house…” Ben Chislett responds “and it shift the power, that mindset, from them to you”.
• Emphasising demand and scarcity “I say ‘that’s what the other 92 people have said this morning who have called, so let’s see if I can get you qualified into the short list’ – and all of a sudden it changes everything…”

Sheree Becker, a past student of Otton’s, illustrates the fact that some of the sellers are quite desperate by the time they are involved in negotiations. Here are some excerpts from her article:

• “Then the truth revealed itself. It wasn’t the house, it wasn’t the seller’s situation, and it was their MINDSET that was the difference between whether it was a deal or not.”

• “A motivated seller will talk quickly, with emotion clearly evident in their voice and respond with a sense of urgency. It’s something you get a ‘feel’ for after a while. Sometimes just the way they answer the phone is enough for me to know where their headspace is now”

• “[after] 7 years of hard work, testing and measuring, improving myself and my language patterns, and above all else, being able to pick a motivated seller within 60 seconds on the phone.”