The real estate market is constantly shifting and as investors, it's crucial that we adapt our sales skills and objections handling to match the current conditions. In this post, we'll be going over Steve Trang's key strategies behind sales in real estate and how he overcomes seller objections.
Steve Trang is a nationally recognized real estate sales trainer who has helped create over 100 real estate millionaires. He's also an active investor himself focused on the Phoenix market.
Here is a quick summary of what we'll cover:
- How the market has shifted and why it's gotten harder to both acquire and dispose of deals
- Why you need to adjust your sales approach and stop educating sellers
- How to pivot your talking points to get sellers to negotiate against themselves
- Tips for uncovering the true motivations and pain points of sellers
- Roleplaying examples for common objections like "I need to think about it"
- Strategies to build trust and become the seller's advisor of choice
Let's dive in!
A Shift in the Real Estate Market
Steve starts by explaining how the market has rapidly changed over the past few months of 2022. In particular:
- It's gotten harder to acquire deals - Sellers need to be at a lower price point for investors to wholesale real estate or flip houses. But it's difficult to get sellers to agree to 70-75% of market value when they are anchored on higher past comps.
- It's gotten harder to dispose of deals - Fix and flip investors want larger profit margins to account for market uncertainty. Cashflow investors are impacted by rising interest rates limiting their buying power. So buyers are more selective overall in this market.
As Steve simply puts it: "It became instantly harder to dispose. So for us personally, we are actively looking to raise private capital."
The key takeaway is that as real estate investors, we need to adapt our approach to match the current conditions and challenges in the market. What worked previously may not work now when seller expectations are still high but buyer demand is slowing.
Stop Educating and Start Questioning
Many investors are inclined to educate sellers by explaining how the market is cooling rapidly and why their home value is lower today. However, Steve warns that this tends to fall on deaf ears:
"If I sat down and said, look, I understand you're trying to get $300,000 for your house. I understand Zillow says your house is worth $300,000. You've got to look at it from my perspective...and I say all these things to Matt, he couldn't care less about anything I had to say."
Instead, Steve recommends asking strategic questions to get the seller thinking and negotiating against themselves.
For example:
- "Hey Matt, you seem like a really smart guy. You're probably paying attention to the market. What are you hearing right now when you're watching news about the real estate market?"
- "With interest rates going from 3% to 6% for buyers right now, what do you think that's going to do to the market?"
- "Right now, we're hearing there are record price reductions going on today. What do you think that's going to do to the real estate market?"
The key is to share facts/statistics, but let the seller interpret and conclude how that impacts their specific situation. This gets their own inner voice to negotiate against their initial price expectations.
Uncover True Motivation and Pain Points
Even with the best sales tactics, some sellers will remain unrealistic in their expectations. As Steve explains:
"If I could repeat and articulate back to you the pain you're experiencing right now, what's keeping you up at night, what's causing you to lose sleep, the emotions, the activities, how it's affecting you, and also able to repeat and articulate to you what the ideal outcome looks like...I would argue at that point I've earned your business."
It all comes back to deeply understanding the seller's true motivations and pain points. If those aren't uncovered, you can't get them to budge from unrealistic expectations.
For example, a foreclosure notice alone doesn't necessarily equal motivation. You need to dig into questions like:
- "What did your wife say when you guys opened that notice?"
- "How are the conversations at home?"
- "Have you tried using your credit card and it didn't work?"
- "How is this impacting your everyday life?"
Go beyond the surface level and get them to open on a real emotional level. This builds trust and gets the intel you need to structure a deal that truly solves their pain points.
Roleplaying Common Objections
Once you've built rapport and trust, you still need to be prepared to handle common objections that arise during negotiations:
"I need to think about it" - Don't let sellers get away with vague "maybes". You need to enforce the upfront contract and expect a firm yes/no response. As Steve explains:
"Are you saying that you really weren't prepared to do something today? Okay, so the price doesn't work for you. Just tell me no.
I wish we had all the money in the world. We really only have enough funds to buy one or two houses for the next couple of weeks. You do your research and you find someone else who's willing to pay more or can't find someone else. I'm afraid when you call me, I won't have the money then either."
Don't let sellers string you along - they need to understand this is a limited-time offer.
"I need to check with my spouse" - Require both decision makers to be present at the negotiation, otherwise don't expect a firm answer. As Steve suggests:
"I want to make sure your concerns are addressed and her concerns are addressed. What would be a good time where we can make sure that we're able to talk to both of you?"
Otherwise, you risk the spouse undermining the entire deal later on.
Build Trust to Become the Advisor of Choice
As we've covered, real estate sales are fundamentally about relationships and building trust. Here are a few tips from Steve on this:
- Truly understand the seller's situation, worries, and desired outcome. Become an expert on their specific needs.
- Get comfortable having uncomfortable conversations. Ask tough questions in a caring way.
- Don't be afraid to share your own story and be vulnerable as well. How did you get started in real estate investing? Why are you so passionate about it?
- Follow up consistently and demonstrate you're a person of your word.
The more you can understand motivated sellers and build trust, the more likely you are to win deals in any market conditions.
Conclusion
We hope this helped with adapting your real estate sales approach and objections handling to the current down market conditions in 2022. In summary:
- Ask strategic questions to get sellers negotiating against themselves
- Uncover seller motivations and pain points
- Roleplay handling common objections
- Build trust and become their advisor of choice
Mastering sales skills will set you up for success as a real estate investor in any type of market!
What objections are you facing right now with sellers? What sales tactics have been working effectively for you lately?
