Transcription
Here's how to wholesale with real estate agents and exactly what to say to them.
Now that we have the lead we want to call on, you're ready to make a call to that real estate agent. Most people just call this agent, have no idea what to say, or why they're saying certain things. I'm going to dive into all the context behind this call, show you its importance, and what you have to do to ensure the highest likelihood of success when calling an agent. And then I'm going to get into what we want to say on the phone so you can extract as much information as possible.
So, I called this initial call to the real estate agent the discovery call. And what a discovery call is, is the first point of interaction and communication with a listing agent on a distressed property that we want to pursue to wholesale. And these are warm phone calls you make to learn more about the property and incentivize the agent to work with you. And on each discovery call, we talk with the listing agent over the phone to build rapport, incentivize them to work with us through dual commission or having a referral of them represent us as our buyer's agent, and/or allow that agent to get the relist of the property once it's wholesaliled to a cash buyer. And on each discovery call, we ask specific questions to learn more about the property, the seller's current situation, the activity on the deal, like the amount of offers and phone calls received, in order to position ourselves as the best buyer and best offer possible. And sometimes these calls take 5 to 10 minutes, and sometimes they'll take 20 plus minutes. But what's most important is to focus on quality conversations. The length is not as important as it is about the quality of the conversation, actually connecting with this real estate agent.
And so why are these calls so important? Discovery calls allow us to qualify or disqualify properties by communicating directly to listing agents by utilizing the MLS and in this case Redfin. The issue we'll run into is never having enough leads. Instead, the issue is going to be which leads do we focus on and spend our time on? I wasn't showing you some beautiful, completely renovated property that wasn't distressed. Right? So that's the thing. Most people get confused and spend their time on leads that have no chance of being wholesaliled, that don't need to go for all cash, and that's not what we're doing here.
Now, here's the criteria to use to decipher if a lead is worth investing time into and effort and energy. Now, number one, is the property in a distress condition, and/or is the seller in a distress situation? And number two, did I have a quality discovery call with the listing agent and is the listing agent open to working with me? And we dictate a quality call from: was the agent open and receptive to our dialogue? Is the agent open to representing us as our buyer's agent, or do they have a referral representing us as our buyer's agent? Are we the first one to call or offer on the property, or one of the first ones? And from the discovery call questions, do we have a fighting chance of actually getting this deal under contract? So, it's really important we do discovery calls so we can qualify or disqualify these leads. And we do it through this discussion with the agent.
Now, reason number two why discovery calls are so important, why we love them: Discovery calls allow us to financially incentivize agents to work with us, and that increases our chances of getting the deal under contract and wholesaling it. So, we can incentivize the agent through dual commission or getting it referred to a buyer agent from the listing agent and/or letting the listing agent get the relist. So, actually reselling the home once it's been renovated. Now, if the listing agent is unable to represent you or refer you to a buyer's agent, then if you are a licensed real estate agent, you can also make your offer more enticing to the seller by representing yourself as the buyer's agent and reducing or waving your commission. Therefore, the seller's going to net more money, and your offer looks more desirable. And this is because if you're a licensed real estate agent and you represent yourself as a buyer agent, you can reduce your commission or waive it completely. And that means that the seller is going to net more, going to profit more with your offer because they do not have to pay a buyer's agent commission. And we'll put on the screen here what I've coined the hierarchy of representation. So always at the top, we want the listing agent to represent us. That's the goal. And in that situation, the listing agent would get dual commission, which is a nice incentive to go with our offer and to push for our offer to go through. Now, if that's not possible or if the listing agent's not willing to do that, the next best thing once again is a referral from the listing agent to represent you as your buyer's agent because then the listing agent gets a referral fee. Typically, 25% of that buyer's agent's commission that listing agent will get from making a referral. That's not bad as well and is a nice financial incentive. Now, once again, if you're not licensed, then use an investor-friendly buyer agent to represent you as your buyer agent, possibly someone in your network you met at a real estate investor association meeting, or if you don't know anyone, just call a warm distress lead on the market on Redfin like I showed you how. And then that buyer's agent can write the offer for you, and you can still get an offer in regardless. And then once again, if you're a licensed, you can represent yourself as a buyer agent and you can waive your buyer's agent commission if you represent yourself. So that's the hierarchy of representation and that's reason number two on why these calls are so important, these discovery calls.
Now, reason number three why discovery calls are so important is that they allow us to build rapport and trust with the agent through the phone, which can lead to us getting this deal under contract and others. So many investors and wholesalers do not actually take the time to talk with listing agents over the phone. And right here, I'll list what most amateurs do and how we actually differentiate ourselves as pros. So those amateurs, they only text or email, and they never give the agent the time of day to actually speak over the phone to learn about them. So therefore, amateurs do not have any rapport or trust. And amateurs are actually scared to talk to real estate agents. Amateurs really take that mass marketing approach which is not personalized at all. Doesn't really connect with anyone. So continue building these relationships with them. Continue speaking over the phone because there are so many amateurs who do not take that step; so many amateurs who only text or email. And most amateurs are unprofessional and don't treat agents as potential friends, colleagues, or human beings. Most amateurs cause problems rather than have solutions. Most amateurs overpromise and underdeliver. We see this all the time. And most amateurs are transaction-focused. They're so short-term focused. They'll stab people in the back. They'll cut corners. They'll burn bridges, whether they know it or not. And most amateurs only want themselves to win. They're only looking out for themselves and never anyone else.
But here's what we do as pros. And here's what I recommend you do. What we do is we actually talk to agents over the phone. We don't just text or email. We speak with them. And human communication is very important here. If every other investor or wholesaler on a deal only texts an agent and you're the only one who calls them, well, right there, you're going to be in the lead because at that point, you actually have an open form, an open discussion with the agent and can learn and extract as much information about this deal as possible as you go through your script and what you say to the real estate agent. And what's important to understand is that so much of our communication is not exactly what we say, but how we say it. And that allows us to build rapport and trust with these agents. And as professionals, we actually enjoy talking to real estate agents. We're not afraid to talk to them whatsoever. And we understand that listing agents are in charge of the deal. If we can befriend them, if we can incentivize them, then what I believe to be true is I can make all my dreams and desires come true. So we can wholesale this deal. And if we wanted to take it down as a fix and flip, we can do that. If we want to buy this deal as a rental, if it works out, then we can do that. If we befriend the agent, if we enjoy talking to them, then the likelihood of us getting this deal under contract and wholesaling it increases greatly. And we also have warm conversations with agents, right? We're not coming there; we're not being unprofessional. We're being very professional. And we're not just strictly talking about the deal, but we're also asking how's their day going, right? How are you? Because there's so many investors that just cut straight to the chase that are extremely cold, do not care about the agent at all. However, we care. We treat agents as friends, as colleagues, and as potential business partners because very much so, they can actually become that. So, understand that each discovery call you make is another connection point, another relationship you can build. And we want to make agents feel important because they are.
Now, once again, if they're in charge of this deal, if we make them feel important, if they're on our side to get this deal done, and if they see where we're coming from, it will greatly increase the odds and our chances of not only getting this deal under contract, but any other deal this agent lists in the future, because chances are if they're listing a fixer today, they will list one in the future. So, we want to make sure we have a great experience with them. And it's important to understand that this listing agent's doing something right to have a seller come to them and say, "Hey, I want you to sell this house for me. It's distressed," right? They have a network of distressed sellers, and we want to make sure that this agent becomes our friend.
Now, as pros, we also solve problems and we listen to the needs and wants, not just of the seller, but of this agent as well. And if you do this, you can be the knight in shining armor, and they're going to call us when that next deal comes up. They're going to call you when someone's giving them a hard time, or another investor or wholesaler is giving them a hard time because we actually listen to them and they want to work with us. Real estate is a numbers game and a relationships game. And we're focused on building these long-term relationships with agents because once again, if they're listing a fixer today, chances are they're going to be listing one in the future. So, we keep tabs on them and we build long-term relationships. And as pros, we create win-win-win scenarios. So, we want the seller to win. We want to give them a decent offer that allows them and helps them to get out of their distress situation. We want the listing agent to win as much as possible so we can incentivize them with dual commission. And we want them to make twice as much money, or as much money as possible, working with us. And we want them to be very excited to work with us. And we want our cash buyers to win. They're our financing and capital partners. It's how we like to look at them. And we want them to have a profitable deal. And you know what happens when everyone wins in the transaction? You win too because now everybody wants to work with us, and now we get repeat business, and people are going to say great things about us, and we're going to have a great reputation. So that's what we do as pros, and this is what the discovery call allows us to do.
Now this call is so important because discovery calls allow you to extract as much information as possible from the real estate agent. What amateurs do and what most investors and wholesalers do is they only look at that property on Redfin or the listing sheet on the MLS, and they assume a deal is a good deal or a bad deal solely by just looking at it, and they don't even talk to the real estate agent. What we do is we don't assume. We go the extra little mile and we make discovery calls to discover more about the property, the seller situation, and whether we have a shot or not of getting this deal actually under contract. And we ask questions which extract information about this deal, such as: What's the seller's reason for selling? Probably a pretty good question to ask the real estate agent, right? Or how many calls have come in on this property? Right now you're evaluating your competition. Or how many offers are there on the property? Now you're understanding about your competition as well. And are there homeowner offers or investor offers on the property? And questions like this allow you to see, is this an investment opportunity? Is this a deal I can wholesale or not? Now, from there, you're going to be able to make powerful and well-informed decisions in order to get deals under contract. And the power is in extracting and obtaining this information by utilizing this one discovery call.
And now, I'm going to give you one of my favorite analogies so you understand the importance of this discovery call. So, imagine you're playing Texas Hold'em poker. And how it works is you usually have two cards that are face down, and so is your opponent. And then what happens is five cards get put out on the field, and then you get to play the best five cards from your hand and on the field. Well, when we don't even look at a property on the MLS on the market, imagine it's like you can't see your opponent's cards. That's just how it goes. You cannot see the cards. You have no idea what they have, what they're holding, or anything along those lines. Now, when we look at the property on Redfin, like I showed you, and you see some photos of the property, imagine it's like your opponent flashing the cards to you. And if you remember what they showed you, you now kind of have like a blurry image of what they showed you. You don't know exactly what they have, but maybe it's one red card, one black card, and you're not sure what else is there, right? Well, when you make a discovery call, what happens is you ask these questions and you get information, and now the cards are clear. Now, you know the cards that your opponent has. And in this analogy, if you don't call the real estate agent, you're never going to know what cards they're holding. And in poker, when you know what your opponent has, you now know where you need to offer; you know how much you need to bet, right? So, the point of this call is to extract information to see the cards that the seller is holding, to see the cards that the listing agent is holding, which allows you to make the best offer possible. So, there's so many amateurs out there that don't call a listing agent; um, don't look at the actual listing sheet, and they're wondering why they're having a hard time. And what my business partner Ryan likes to say is that the deals are in the data. The deals are in the information. So, we're extracting this information so you make the best offer possible. So, with this discovery call, you now have more information. You now have more data about this deal that allows you to make more informed decisions and more decisive offers in order to get these deals done and gives you a greater chance of getting these deals under contract rather than someone who knows less than you about the deal. This is part of the X factor that we do as pros that so many people don't do.
And so, probably in your mind, you can start to think, "Wow, these guys go really deep." And if they're doing all of this and thinking about these calls 10 times, 100 times more than me, I've done 10 times to 100 times more calls than me, they're probably going to beat me out when I talk to a real estate agent.
So lastly, reason number five why these calls are so important: These discovery calls give us the best possible chance to get a deal under contract. That's my belief. But what's important to understand is that it's not just about one phone call, right? You will make another phone call, and I'll talk about that here. And I always want you to expect that it's going to take more than one phone call, but that initial call is so important. Always make a second follow-up call at the very least, and that the deals are actually going to be in the follow-up. So, don't expect to have a one-call close. It can happen. And when the agents are willing and able to work with us right then and there, you will know, but always expect to make that second follow-up call where we can actually discuss the offer price or put in our offer terms as well. Now, most importantly, the more discovery calls you make, the better you will get, the more written offers you will send, the more deals you'll get under contract, and the higher likelihood you'll close these deals, and the higher likelihood you'll make more money.
All right, now that you understand all the important context and know that you're going to turbocharge these calls now and treat them with the utmost importance, let's dive into how this call should go and what you can say.
All right, now imagine we're calling on this distress lead right here. We have the phone number of the real estate agent. Here's how the call can go. And you can say, "Hey, Louie, this is Alex with ABC Houses. How are you doing today?" They'll probably say, "Hey, I'm doing great. How are you?" And then you can say, "I'm doing great, thank you. I want to give you a call about your listing on Lori Street. Did I catch you at a bad time? Are you able to chat about it right now?" Now, most of the times they're in charge of this deal. This is a warm phone call. They want to talk about the deal. They want to get it sold. So then what I like to say is, "Great. Well, first off, I'm a buyer, non-agent. So would you be open to representing me as your buyer by any chance?" And what we're doing here is we're offering this agent dual commission. If they say yes, then they're going to be able to make about twice as much money through representing us because they get a commission as a listing agent, typically 2 and a half to 3%. And then also the buyer's agent commission is typically 2 and a half or 3%. So just that simple question, very nonchalant, rolls off the tip of my tongue. If they say yes, they're probably going to be more open to telling me more information about this deal as well. And so we're looking to get that yes. And in this example, let's say we get the yes. I'm going to then say, "Great. So, I'm curious what's the seller's reason for selling, and I'm trying to understand the current situation of the seller." This is what a lot of people don't do. Sometimes on the MLS in the confidential remarks, it's going to show you the seller's actual motivation. Sometimes it's there, sometimes it's not, but those confidential remarks aren't going to be on Redfin, which is why, you know, one of the reasons we like to use the MLS. When you ask that question, now a listing agent can actually tell you, "You know what, they need to move in two weeks and they need a cash offer." They can tell you the seller's reason for selling. And like I told you, I'm looking for properties in a distressed condition and a seller in a distress situation. And they're not going to tell me all the time, but sometimes they do tell me. So remember, the deals are in the data. The deals are in the information. And so at this point, I like to say, "Hey, thank you for uploading all those photos on the property. What would you say is the overall condition of the property?" So I'm trying to have them explain to me more about this particular property. And maybe they're going to tell me things that I didn't see in the photos as well. And also I'm trying to get this agent to, through talking to me about the deal, actually explain to me that it is distressed. And this is important psychologically so that when I offer they know that this is a distressed property in a distress condition. They're telling me how distressed it is. Right? And then I try and pinpoint: Are there any major issues on the property? So are there any major issues with the property, like structural, foundational, any faulty wiring or electrical issues? And these are things that aren't always on the MLS, or maybe there's cracked slabs,
Right? I want to know what's going on with this property. Is this going to be a cosmetic renovation, or are there going to be things that are additional on top of the cosmetic renovation that I don't know about, right? This is very important for me to know my numbers. I know my numbers down to the tea. If you don't know your numbers down to the tea, then you can't make the most aggressive offers and the best offers.
Then I want to ask the agent, Gray, is there anything upgrading the property? I'm just trying to find out, is the kitchen updated? Bathrooms updated? Then I like to ask the agent, are there any special features about this property that would separate it from other homes in the area? I want this agent to tell me, you know, maybe there's a view, maybe there's something special about it that I don't know. Maybe it's a big lot size that I overlooked and didn't see because now I'm thinking about the resale value of this particular property. I'm thinking about what will make this property stand out once it's sold because I actually need to sell this property to my cash buyers. So knowing these special features is very important.
And then I like to ask the agent, you know, what would you say this home would be worth in its best possible condition once it's been renovated? And this is something that I want you to take for a grain of salt. I never trust an agent's opinion on what a property will sell at once it's fixed because if they were a professional real estate investor, then they probably wouldn't be listing houses on the MLS. But I like to listen to what they say. Sometimes they are accurate, and that then tells me, okay, this agent actually knows what they're talking about. Sometimes they're completely inaccurate. Sometimes they tell you the ARV, and it's actually what the property is listed at. And that tells me that they listed it at way above market value. And if they're saying, "Hey, yeah, this needs $50,000 of renovation, um, and it's going to sell at $500,000, and the property is listed at $500,000," well, I know that I have room to negotiate. I know that, you know, they have an unrealistic representation of where they're actually listing this property and its current value. So, this is a very telling question.
And so, questions like, how's the current activity been on the property so far? Meaning, have there been a lot of calls or offers on the property? And are those homeowner offers or investor offers or both? And how many? And are there any more offers that are planning on coming in? Then I like to ask this question. All right, thank you so much. And what price do I need to come in at to actually lock it up today? So, I'm trying to have the agent tell me a price. Sometimes they tell me a price that completely works for me that was actually lower than I anticipated. Sometimes they tell me a price that's higher, but starts to give me a ballpark of where I need to be.
Now, regardless of their answer, I then say, "How flexible is that price?" Right? I just ask that every single time. How flexible is that? Because now they might beat themselves down 10, 15, $20,000, or they might stay. But it's a great negotiating question. And that's what I'm doing here.
And then I like to ask, are there any specific offer terms that the seller would like to see in the offer? Because at this point now, I can actually negotiate with my offer terms. Maybe they need to close quickly, uh, in 10 days instead of 14. Maybe they need to close later, 30 days. Maybe they need to close in 14 days, but have the property leased back to them in 30 days. So, now I'm being accommodating. Now, I'm being a solutions provider. Now, I can potentially hear problems that are going on with the deal and actually solve them and help the seller out and help this listing agent out.
And then I like to ask, when does the seller plan on reviewing offers? Because at this particular point in time, I want to know, is the seller reviewing offers on Thursday at 2 p.m.? If that's the case, I'm going to follow up with this agent every single day and say, "Hey, where do we stand? What do we need to do to make our offer stick out?" And then I'm going to follow up with that agent the morning of the offers being reviewed and say, "Hey, where do we stand? What do we need to do to make our offer stick out?" So, this is the extra mile I'm talking about and building a relationship with the agent so that you can have the best offer possible and increase your likelihood of closing these deals.
Then, you know me, I like data. I like information. I'll ask the agent, "Gotcha. And are you representing anyone else on this property by any chance?" Because I want to know, are they representing 10 other offers, or are they going to say, "No, you're actually the only person I'm working with." That makes me feel good. It allows me to know where I'm standing. And as I'm sorting through all the leads and calls that I'm working on, we start to prioritize the ones where the agents only representing us on the deal. The property's absolutely distressed, in a distressed condition. The seller's in a distress situation. And so now it's moving up the pipeline. Now it's moving to the front, and it's increasing the likelihood. It's increasing the quality of this deal. That's why these questions are so important.
And now what we need to do before we end the phone call is we want to extract as many deals as possible. So, like I mentioned, it's not just about this transaction. It's about the relationship. And if a listing agent's listing a fixer today, most likely they're going to be listing a fixer tomorrow. So, I always like to ask, great. And lastly, do you know of any other fixer-type properties that we should be looking at? Maybe you're listing or listings you know of not even on the market yet that you can represent me on. We're looking to buy five more deals this month and would love to have you represent me on each and every one. Right. So now sometimes agents know of deals that are coming to the market, and we can be the first one to offer on it. They may know of another deal that's off the market, and we can get a pocket listing, meaning a listing that no one else is offering on. So it's a very important question, right? I'm not just thinking about this deal, and I'm maximizing the call. I'm maximizing this call. That's the important thing. I'm asking all the right questions and getting all the information, but I'm also asking about other deals. That's how one deal, one call can lead to many.
Now, lastly, how I like to wrap up the call, you know, I'm not making an offer on this particular deal as of right now because I haven't analyzed the property. I don't want to be the joker. I don't want to be the amateur that makes an offer, then has to backtrack on his numbers. It's not what I do. So, instead, I say, "Hey, great. You know, we're in this business to build long-term relationships. I really look forward to working with you. I'm not just going to come in with some wild random offer price. It's going to be justified with some thorough research. And so, now I'm going to meet with my team. We're going to discuss the property in depth, and then I'll get back to you as soon as possible with where we can come in at to make this property work for all of us. Does that sound good? Great. Thank you, Louie. Hey, pleasure speaking with you. I'll be calling you back shortly." There you have it. That's how you talk to real estate agents when wholesaling real estate on the market. And if you want to build a hyper-profitable wholesaling business, then check out my full in-depth training at realestateskills.com/watch. I'll show you how to start closing multiple deals per month with predictability without having to spend $1 marketing. See you there and happy wholesaling.