These transcripts involving Rick Otton (and some past students) relate to the post Rent-to-Buy Selling Techniques
Dealing with sellers
See video here
Rick Otton: 5:40 You know it’s funny…students always say to me, how often would you call [the seller] back? I go “Never” – Like I know it’s terrible but I never call people back because of exactly what you were saying – if you want what I’ve got, then I’ve got to set up that position right up front that I’ve got the gold, and you want the gold – and if I’m calling I’m implying that you’ve got the gold and I need it.
See video here
Rick Otton: I want you to think about the psychological position the seller is in now. I’m in a one point negotiation, we’ve ticked some boxes, and I’ve gone back to the seller saying ‘is that the best you can do?’ ……the position of the seller is they want to move on with the rest of their lives….do you reckon the seller is sleeping or is he lying in bed wondering ‘is he going to by the house or not?’
The seller goes through the emotion – I don’t. I must understand this, I must understand the science – I’m in no hurry, and if I’m in no hurry, this thing just sits and sits. So who will become more flexible, the seller or me?
See video here
Rick Otton: So I’m going to the seller’s house….so, I knock on the door, as soon as I knock on the door I start wiping my feet like this…because as soon as they see me wiping my feet they say ‘come on in’ – it doesn’t matter if it’s dry or wet …so that’s the first thing, gets me in..the first thing I’m going to do is go into the lounge room. I don’t sit at a table yet because a table sets up the wrong energy in the room – I’ll look for a lounge room, somewhere to hang out, just somewhere to hang out in the house but it will not be at a table. When I’m at the lounge room, hanging out, walking around the house, I’m starting to build rapport. The first thing I do when I walk into a house is I’m going to say ‘let me ask you something Sue, my God, did you do that driveway yourself? Or did you do that yourself? I’m starting to build rapport. The first stuff that is coming out of my mouth is building rapport with my seller. Ladies and gentlemen, if sellers don’t like you it doesn’t matter what you’re offering, they’re not doing business with you – they must like you. Now, do me a favour will you? I’m all about giving you the content – not necessarily my manner – I slow this down with sellers, like I’m saying to you this much information, but the way I do it is more like [very slowly and considered] ‘Mrs. Smith….Did you put that garden in yourself? Look, I only say that because I’m newly married, and my wife’s been struggling to work out what kind of potting soil to use, and I was just wondering if you did this yourself. God damn, look at that! Phew. Wow…and are they year round plants or are they seasonal?
That’s the style. What I don’t have ladies and gentlemen is the luxury to go 7 hours in that style with you – so please put your own personality around it. I’ve just got to give you the facts – are you with me? So I’m building rapport. If you watch Columbo, the first thing Columbo does when he walks in a house, he goes ‘hey, is that your painting? My God. The last time I saw paintings like that they were only hanging up in museums.’ What’s he saying to the guy now? You’re a very important person, because you’ve got stuff that usually only hangs in museums. It’s what Columbo does all the time – he builds rapport. Build rapport, build rapport, build rapport, I do not move from the rapport building stage until I have rapport. If there’s no rapport, I stay there. I cannot go to the next section until I’ve built rapport, you feel comfortable and we’re enjoying each others company. Sometimes I’ll sit in rapport stage for an hour, and I’ll walk around the house. By the way, people want to show me the house. I’m not that interested in the house, because I’m going to say let me guess, your house has got upstairs, downstairs, kitchen….., but people don’t want to hear that, people want to me to come and see the whole thing.
See video here
Otton refers in this video to the “sales cycle” and ‘keys to negotiation’.
Here are some excerpts:
- “An intellectual funnel – it means a structure of leading questions where I will take people where I want people to go”
- “[the questions] now start 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 choice”
- “What if my questions could lead them that they have nowhere to go except end up here…we call it persuasion”
- Otton “…closed question” Student “shuts the gate” Otton “Shuts the Gate. This is the question where you have totally controlled the person’s answer.”
- “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”.
- “If we did this together, would that be a problem? But I know that it will control and manipulate that person to say ‘no’, which means ‘yes’.”
- “or if it finishes with ‘wouldn’t it?’, ‘couldn’t it?’, ‘shouldn’t it?’ it will also manipulate and control someone’s answer”
- “what it does, it actually will control someone’s thinking, and where they go, in the conversation . It actually closes up the funnel”
- “I will take people where I want them to go”
- “It limits their answers – I now start putting controls on their responses”
- “These are called ‘pointed’ [questions] they now start limiting where people can go. I’m actually helping direct them in a particular direction…”
Sheree Becker, past Rick Otton student, wrote this article which I have copied below:
“So What is a Motivated Seller?”
When you first embark on creative property investing, most of your training revolves around you getting that house first, and it always comes with the advice to ‘work with a motivated seller’. So lets explore what is a motivated seller so we can all put together successful transactions.
When I first started in creative property, I jumped in the deep end and put into practice some advertising ideas from my training. Out went the ads here there and everywhere to attract me a ‘motivated seller’. The calls started to trickle in, this quickly turned into a deluge, my phone was swamped and I was on cloud nine with all the ‘motivated sellers’ calling me. Or so I thought. I took down their details, asked some basic questions about the house and got into my car driving all over town looking at all these house. From mansions to run down shacks, I saw them all and met some very interesting characters. But at the end of the first month I realized I’d chewed up a lot of petrol money and a lot of shoe rubber with no ‘deal’ agreed to yet. What was I doing wrong?
Its only now, 7 years down the road, that I can see clear as day where I was going wrong, and this is only due to 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.
I’ll let you in on a little scary truth … It’s not about the house! And even more shocking, it’s not about the person’s situation either. For the first few months I thought it was all about the house and if it were a house my end buyer would want to live in. Then I progressed to my way of thinking that it was about the buyer’s situation. This situation or that situation was a ‘doable’ deal. For example, if they didn’t need all the money right now to buy their next house, then bingo – it was a deal. But then it dawned on me after going hard to work on them and again driving all over town, why were some deals so obvious and SUCH a good solution for the seller, only for me to be walking away head in hands wondering why I had a blank heads of agreement still in in my folder.
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. When we first delve into a deal we are taught to look at the situation, the problem and put together a solution that gets the seller what they need so we can get what we want, a win-win. But if the sellers mindset is one of ‘oh well that’s a nice idea, I might just see what other offers are out there’, or ‘yeah that’s great but my property has only been on the market a few weeks so I’ll see what better price I can get’, or any other reason for why they are not proceeding. Then let me tell you they are not motivated, no matter how dire their situation might be in your eyes. They could be about to be evicted tomorrow morning by the sheriff, but if they are not emotional about their problem needing an urgent fix, you will walk away empty-handed.
So, how do I tell if I am dealing with a motivated seller on the phone? A few probing questions will get you answers, but I’ve found it’s the language they use to answer the questions and the sense of urgency and emotion in their voice that will tell you if they really do need your help.
For example, the question of ‘is that important to you?’ Will seem like a strange question to an unmotivated seller. They may laugh it off, or give a superficial bland response. A motivated seller will talk quickly, with emotion clearly evident in their voice and respond with a sense of urgency. Its 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 at now. We’ll look at some more ways to detect a motivated seller next month.
Dealing with Sellers
Rick Otton discussed dealing with potential buyers in podcast 83 Here are some excerpts:
Michelle ( who has worked as a traditional real estate agent, says that compared to being an estate agent): I love saying ‘sorry, you need to qualify for that property, I’d love to have a chat to you about your circumstances – I don’t just open a property because people want to have a look at it, if it’s the right opportunity for you, and once we’ve assessed that, then we can go to the next step.
Otton: that’s incredibly powerful…… I don’t sell houses….. but I do move people into opportunities, so let’s see if you qualify for it. I reckon one of the most powerful things you can do, as Michelle has just said, when people ring me, they think they’ve got the gold, right? And that I’ve got a house I’ve got to show, and ‘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: ..and it shifts the power, that mindset, from them to you.
Otton: I say to people, ‘let me ask you, why did you call me today?’ And they tell me about my ad. What was it about the ad that you like? They say ‘well i could see on the ad I don’t need a bank loan in order to get it’, and I just say ‘Does that sound exciting?’ And he says ‘yeah’ and 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 just changes everything, and now they’re qualifying to get down to the shortlist about the ad for the house they’re dying to have, against ‘I’m so lucky that they’re going to come and be a potential buyer’ …..I’ve got one opportunity and someone has to qualify for it – like, who gets it?
‘Getting Started Money’ – video here
“Listen, ‘getting started money’. People like ‘getting started money’ when they get into transactions but sometimes we want more ‘getting started money’ than what people actually have to give us. A couple of questions you might ask are: “Can I ask you something – if you love this house how much would you have to get started to put towards owning your own home?” and then they’ll give you a certain amount of money, and then if you say “What if you really loved it?”, and they’ll give you a little bit more. Then “if you really really really loved it?” you get a bit more. “What if your wife loved it?” And you get a bit more “What if your wife was going to leave you over this house, if you didn’t buy this particular house?”
A couple of other questions is, of course, “Your parents, do they love you?” Yes they do. “If they had to show their love to you in the way of a cash advance loan how much would their love be worth? What about your boss? Are you good at what you do? Would your boss like to lose you as an employee?” No, I’m very good. “Well, if he had the choice between losing you and giving you an advance on your pay, how much would he lend you?” Also, you’ve got to get people to where the trees are, they just see the forest. If you say to people “can you get some money?” they say ‘no’. Show them where the trees are. “Have you got a credit card?” Everybody’s got a credit card, you can always get a cash advance these days with merchant facilities…….. Show people, remember one last thing. When people say they’ve only got $5,000, you go “up to?” they go $7,000 “but no more than?” they go $8,000. There’s a lot of ways to do to get people to have more get started money. Something else, when people say I’ve only got $5,000 is that enough? You say “well there’s 47 people behind you, do you think that they may have more than $5,000 in order to grab this opportunity from you – what can you put up to avoid that happening?”