Working with people is always tricky. Not only is every person different, but also every conversation you have with them is unique. And you’re not the same person at each approach, either. This is perfectly fine when you’re just talking. However, when your income depends on the number of sales you close, you need to downsize the amount of unpredictability.
One way you can do that is by standardizing your phone calls and other contacts with potential sellers. Other is by using a bit of psychology and other behavioral tools in your favor. To learn more about that, at Real Estate IQ, we asked Josue Llanas to host a webinar and reveal all the secrets on how to close a deal applying psychology.
And the real estate investor certainly delivered! In case you missed it, here, you’ll find a quick guide on how to close a deal applying psychology.
Step 1: Know your seller
Generally speaking, in the real estate business, you can come across four types of sellers. And you need to recognize them right away in order to handle each conversation properly.
- Dominating seller – This type of homeowner is the one that’s always trying to take control of the conversation. They’re not only dominating but sometimes a bit aggressive. For Llanas, the most important thing here is taking control of the conversation as quickly as possible and letting them know that you’re in charge. You can do that, for instance, by not answering their questions or asking questions on top of their questions.
- Influential or emotional seller – In this case, it’s critical to slow down, take control of the conversation and ask questions that guide the conversation forward. These are people very easy to communicate with and that enjoy talking to others. Don’t forget to ask them how they feel about you helping them out.
- Stable, easy-going, chill seller – This type of owner tends to be very passive. It’s usually someone going through foreclosure, for example, who feels that he doesn’t have many options left and is ready to be helped. However, you need to be cautious not to be too aggressive, or you might scare them. The best thing is to let them take control of the conversation to feel empowered to decide to sell the property.
- Cautious, analytical seller – These are very logical people who may want to speak to an attorney or think about it before deciding. And they won’t trust you since you’re the one who’s trying to buy them their house. Therefore, you need to make an excellent case for yourself and, as soon as they let you know they’re going to hire an attorney, send them the regular contract (and not the short version, since they will be more inclined to sign the longer one).
Step 2: Know the kind of questions you can ask
Llanas also listed the four types of questions you should ask in any conversation with a potential seller. Each category has its own purpose, whether it’s providing you with key information on the property and the situation or building trust, so they end up selling the place to you. You’ll need to be a great active listener to identify these elements and use them in your favor.
- Situation questions – These are excellent to establish a professional rapport. People do business with people they like. Thus, the most important things for selling are getting the seller to like you, be likable, and have something relatable with them.
- Problem questions – They’re helpful to find pain and motivation.
- Implication questions – This type of question is oriented to have them realize their situation and come to terms with the fact that if they don’t take any actions, they will be left in the same position they’re in.
- Need payoff questions – Here, you inject yourself as the solution and drive emotion. Sometimes, people have a problem and ignore how to solve it; your job is to propose yourself as the solution, as their very own knight in shining armor.
Step 3: Pay attention to your tone
Tonality is the pitch in your voice, the inflections that you use. And since it’s a world-known fact that it’s not what we say but how we say it, it’s critical to adopt the right tone to succeed.
There are three types of tonalities, but only one will be helpful:
- Breaking rapport – This is how a cop would talk to someone running away, so you’d better not use it when talking to a potential seller.
- Neutral rapport – This is the tone you want to achieve for most of the conversation. It’s the one you use when you’re relaxed, like a late-night DJ voice. You should keep this tonality for the entire talk minus the first ten seconds, where you ought to bring as much energy as you can. Remember: you never know which phone call is going to be your next deal.
- Seeking rapport – Kids often use this tonality to convince their parents of something. According to Llanas, this is the worst tonality you can use because it’s often associated with seeking approval from someone, so you’ll end up pushing them away.
Step 4: Organize your phone calls
As you can see, even though every conversation is different, there are many tools to reduce uncertainty. And, in this step, Llanas provided a format to organize a phone call, so you gather all the information you need while convincing the seller to choose you.
- Introduce yourself – This step includes who you are, why you’re calling, timeline, and acceptable outcome. Remember to use a high energy tonality and be clear about how long the phone call will take, what’s the schedule, and the acceptable outcomes (in other words, give them the freedom to say no).
- Establish professional rapport – This is the part of the situation questions. You need to establish a connection. Hence, it’s better if the seller understands your values and personality to see if they like you. Here, you can ask questions like their situation and ask for details about the house (and their family). They’ll come in handy when running comps.
- Find pain and motivation – These are the most valuable questions. You’ll use problem and indication questions to help them realize their situation. Some examples are “why are you interested in selling?”, “how long have you been thinking about selling?” “Is there anything about your current situation you don’t like?” and “what’s going you happen if you don’t do anything?”
- Inject yourself as the solution – It’s time for the need payoff questions. At this stage, you may ask, “what would it feel like if I could help you out?”, “in a perfect world, how would you like this to go?” or “if I can solve this issue for you, what would that mean to you?” With them, you’ll understand what they want and work to give them exactly that.
- Find deal killers – Deal killers are the biggest problem for closing deals, and it’s a step often skipped. Llanas emphasized the need never to do that because it lets you determine who can influence the seller’s decision and try to solve it beforehand (or at least it’ll give you the chance to be empathetic). Be sure to identify the primary decision maker and find out if there are competitors, family members, friends, or advisors. Furthermore, sometimes the deal killer is just the risk because they’re very cautious, so good advice is to find out what would be enough for them to trust you.
- Make an offer – This stage has four parts: you want to make sure you let them know an anchor price casually, make some financial concessions, place your final offer (and make it a very concrete number), and lastly, make some non-financial concessions (gifts or freebies, like cleaning up the trash or help with the moving).
- Negotiate – Llanas recommended seeing it not as a battle but as a process where people work together to find common ground or a solution. Once they accept your offer, don’t forget to congratulate them for getting precisely what they wanted.
- Close the deal – The last step of the way is a reconfirmation of the sale, where you prevent buyer’s remorse. Even though they already agreed on the number, the real estate investor advised asking sellers if anything could have prevented them from closing, to be sure.
“At the beginning, you go through these daily struggles. There’s a lot of self-development that needs to happen to get to the point of closing a deal. And when you cash that check, that’s where everything makes sense. If you’re starting, stick to this plan for at least six months, and I promise that, if you put all your time and energy into it, you’ll be closing deals really soon,” Llanas concluded.
Disclaimer: The blog articles are intended for educational and informational purposes only. Nothing in the content is designed to be legal or financial advice.