Mistakes Made When Cold Calling

Ask a dozen different salespeople how much they like making cold calls. To put it bluntly, you won't hear many cheers. The human condition is such that we go to great lengths to avoid being rejected; making cold calls is a surefire way to increase your exposure to rejection. The broker is not making any sales, so that's good news. Actually, you're doing both parties a solid by providing a service that benefits them equally. You're assisting a seller who is likely to be desperate to unload a property they no longer want. Foreclosure, low equity, or a need to relocate due to work could all be contributing factors. It's possible that you're assisting the executor of an estate with the sale of a property used to cover final expenses and distribute any remaining funds to the heirs. You might be helping a bank get rid of a property that looks bad on their balance sheet.

You'll see some real-world examples from the wholesale real estate industry as you read about common blunders made by cold callers. Don't forget that this isn't a pastime, but rather a means of making a living and bringing satisfaction to the people on both ends of your transactions. Never mind the "scripts," too. Reading from a script when making cold calls is immediately noticeable to the prospect.

Mistake #1: Talking to someone who isn't the decision-maker

When making a cold call, it's encouraging to get through to someone who seems receptive and interested. Assuming they are the only person with the authority to sell a house would be a huge mistake. Which of the most typical people found on real estate lead lists would fit the bill? Co-owners are considered individuals, but businesses are not. They may be worn-out landlords, people who no longer need a rental unit, people with significant equity in their home who are selling, or people who have no children at home. A skip trace may be necessary to track down the owner. Methods used by wholesalers - Asking if you are speaking to the owner should be asked as soon as possible, in conjunction with explaining that you are looking for homes for investor buyers. There are also real estate owners who are corporations, the legal system, or businesses. Institutional real estate investors include trust and estate administrators, executors, corporations, banks, and other financial institutions. Based on how you gather leads, you'll know. An approach similar to that of a wholesaler allows for complete honesty. Maintain your professionalism and politely ask to speak with the sales manager, mentioning that you represent interested buyers.

Mistake #2: Asking yes/no type closed questions

Asking questions during cold calls that can be answered with a yes or no effectively ends the conversation, with the possible exception of "are you the owner?" If you want to qualify them or better understand their needs, try rephrasing the question so that they can add information or share thoughts and feelings. When you make the call, for instance, you may already have some of the home's financial details at hand. You are aware that the owner is late on payments, in default, but not yet in foreclosure, as you are conversing with them. You likely already know how much they owe on the loan and how many payments they have missed.

Key Note: Instead of directly asking if the loan balance and late payment information you have is accurate (yes/no), a wholesaler might say something like, "I saw a notice (lis pendens) about your home posted by the lender and wondered how much they are hassling you." In addition to the outstanding balance, they have the option of discussing their level of motivation and providing any other details they see fit.

Mistake #3: Talking more than listening

It's only natural to want to impress a potential customer with how knowledgeable and skilled you are in order to close the deal. The most important thing is to keep in mind that you're a businessperson providing a service of connecting vendors with potential purchasers who are investors. To put it another way, you are not selling the product's features and benefits. Remember at all times that you are a business providing something of value to the seller. You can't turn an uninterested lead into a serious buyer unless you listen to what they have to say. The bulk of your communication should be spent introducing yourself and detailing how you help sellers in their current plight. You need not go into specifics with them. As soon as possible, switch gears to consultant mode and start asking questions about how you can be of assistance.

Key Note: You should start asking questions to the seller prospect once you have established that they know what you do and have some idea of how you may help them. Perhaps you can prove your worth by inquiring further to ascertain the seriousness of their need for your services. Risking a small amount of time to gain a substantial amount of trust is well worth it when you show that you are there to help, not just do a deal.

Mistake #4: Trying to close the deal too soon

The Sandler Selling System is one of the oldest and most successful sales training programs around. It has been around since 1967, and it continues to be an effective means of generating revenue for many businesses.

Fundamentally, this is an approach to business that is based on consultation. It is your job to offer advice, not to force your opinion. Instead, it is up to you to identify the "pain" that they are experiencing, or the need they have for your products or services. Most private sellers have glaring monetary requirements. Relatives of the deceased may put undue pressure on the estate's representative to liquidate assets. A manager of assets in foreclosure must achieve certain financial goals.

If you try to close a deal during a cold call before you have fully understood the client's situation and identified all of the obstacles standing in the way of a successful sale, you will likely be met with resistance. The important thing is to take as much time as you need.

Key Note: You keep digging until you find out everything that's bothering them or what they really need. They will probably ask for your assistance in selling at that point. If not, you still need to know if there is enough incentive for you to move forward with the deal. Now is the time for Sandler to ask, "Are you ready to sell if I can find a buyer who can get you out from under this property?"

Mistake #5: Not making clear what comes next

Your prospect may be getting close to a decision at some point during your cold calls, and they may ask what the next step would be if they want to sell at some point during the conversation. In the event that they do not, and whenever you believe that it may be of assistance, you should walk them through a brief summary of the procedure. It is reassuring for the homeowner to hear what is going to happen and when it is going to happen.

Key Note: After you have gathered the information you need from the homeowner and they have not requested any action, the fact that they are still talking to you indicates that they want more information. Describe in detail what it would be like for them to move forward with things if they decided to do so. If the buyer is an institution or the legal system, you should come to an agreement with the person making the decision regarding how the process will proceed.

Mistake #6: Not using the best tools to reach your goals

The good news is that you now have more resources than ever before at your disposal to become thoroughly acquainted with a property before making the first phone call. Many people, especially inexperienced wholesalers, have a tendency to rely solely on free, online real estate tools like Zillow for research purposes. Remember that every rival is engaging in the same strategy, though, so while it may work for you, it may not for them.

You can expand your markets and skyrocket your deal-making abilities by supplementing free resources with paid search results from real estate-specific databases. They will more than pay for themselves with proper application and diligent follow-up. If you reside in a non-disclosure state, consider finding a way to obtain MLS access.

Key Point: Before making the closing call, you should have a full layout of the property's value and features. Have a map of it and know the neighborhood around it. Have information about similar properties that have sold, because you may need to talk to the prospect about how much their property is likely to sell for. If possible have a printout or screen display of current and past mortgage information, as well as information about the property's assessed value and property taxes. This helps you confirm what the prospect says and answer any questions they have.

Mistake #7: Too much information about you

You read about asking closed questions and talking more than listening in previous cold calling mistakes. The "consulting" approach and getting the prospect seller to tell you what they need and why they want to sell are both effective. During those processes, you will occasionally tell/show them your ability to assist them in reaching their goal of getting out from under their home. The key is to avoid using the words "me or I."

When you understand their situation and they have shared their motivation, explain how your company helps sellers move on by utilizing a national database of investor buyers. You convey that while you serve buyers by finding them homes, your service is more valuable to sellers.

Having multiple potential buyers allows the seller to choose the best buyer for his or her financial and timing requirements.

Key Point: When discussing yourself and your services, emphasize how they are focused on the seller and getting them out of their home in the best way possible. Discuss the resources that will provide the best cash buyer for their home.

Mistake #8: Neglecting to use voicemail technology

Some cold callers see arriving at the prospect's voicemail as a negative because they don't get to "pitch their script." A lot of this is about engaging the prospect in a more in-depth discussion about their needs and motivation. It can be aggravating to have your call screened or to have difficulty reaching a busy person. You must speak with them at some point, or the lead will be squandered. Create voicemail scripts and practice making them sound natural. Each message should be tailored to the prospect's personality and motivation. Keep it short and to the point about how you can assist. The initial voicemail gets past the fear that many people feel when they receive a cold call. They can listen without having to speak. Some cold callers have discovered that leaving a well-crafted voicemail for the first contact results in more closings. Even better, there is technology that takes it a step further, practically guaranteeing that leads call you rather than you calling them. Ringless Voicemail (RVM) is a pre-recorded message that goes directly to voicemail without ringing the phone. This can be found in vrious Real Estate Marketing Platforms such as RE Doers.

Key Note: Create short and targeted voicemail campaigns so that if the first does not receive a response, the second continues your services pitch. Expect excellent results.

Mistake #9: Not following up

As a real estate professional, there are many situations where failing to follow up after making a cold call could be disastrous. It's okay to give up and admit defeat sometimes. Contact them via email or text message if they don't pick up the phone or respond to your voicemail. The texts would be succinct and clearly state that you have interested parties for their home and would like to speak with them. You still have options even if you have to rely too heavily on voicemail or texting. If you have access to a working email address, you might want to try sending a message. You'll be able to plan out your assistance to them more effectively. In the beginning stages of a relationship, an email response will tell you the preferred method of communication. Traditional methods such as writing and sending a letter are always an option. This is especially true of older homeowners, who may not be tech savvy or interested in owning a smartphone. Perhaps starting with mail is the best option. Trust and estate administrators can also be reached via email or direct mail.

Key Note: Create a unique contact and follow-up strategy for each type of prospect you are pursuing in your marketing efforts. Methods of contact should be mixed and matched depending on the type of prospect, and the results should be measured and analyzed. Using a platform such a RE Doers could help get this done with ease, due to it's abiltiy to create mixed/hybrid campaigns.

Mistake #10: Not considering their concerns

Whether it is a classic "objection" or merely a concern or expression of doubt based on their current knowledge, there will be instances in which the prospect will express hesitation. Typically, for corporate, bank, trust, and estate sellers, these pertain primarily to financial considerations. Many factors can contribute to homeowners' resistance or reluctance, and often what you hear is not their real concern.

One effective strategy for cold calling in real estate is to ask "why, how, or what-if" in response to an objection statement. If a seller cannot foresee a way to sell and cover costs, and since the credit hit will occur regardless, they may as well relinquish the property. If you can find a buyer with cash and no closing costs, the appropriate response to a "what-if" question is to move forward.

Key note: The wholesaler is responsible for formulating questions such as "how," "why," and "what if" for each anticipated objection. Make use of them as a tool to assist the prospect in selling themselves.

Mistake #11: Being unclear about your value

The most important thing to remember is that everything you know about real estate wholesaling that lets you do what you do is often somewhere between not understood and complete gibberish to your prospect. If the only thing you say to a prospect when you cold call them over and over again is that you can sell their house, you might not get a deal. Giving a lot of financial information about your value, like talking about the numbers you need to meet to get a buyer, is not a good way to show what you have to offer. You need the numbers, but you also want to show that your value will help them get out of the house and all of its problems so they can move on with their lives.

Key Point: Do a thorough analysis of how your prospects see your value from their perspective. Make sure that all of your follow-up is geared toward making your value clear. You have the resources and tools to get them out from under the home and its responsibilities. You are not just a middle-person for profit. You know how to solve problems and have tools to help.

Mistake #12: Not making your lists more specific

To fine-tune your lists, you need to divide them up by type of prospect. The more specific your criteria are for putting prospects into groups based on their needs, the easier it will be to meet those needs when cold calling. Most of this is done for you when you search for paid resources, because you search by type:

• Absentee owner
• Abandoned property
• High equity homeowner
• Low equity homeowner
• Empty nesters
• Trust owned
• Corporate owned
• Seller financed

Most of these lists for wholesaling real estate are well split up just by the type of owner. Someone might think that the goal of motivated seller leads like absentee owner searches and abandoned property searches is the same. After all, if the house is empty, it's clear that the owner doesn't live there. But an absentee owner could be a landlord who has had enough and wants to sell. When someone walks away from an empty house, they probably have a very different reason.

Key Note: Examine each segment to see if there are any reasons to further segment it. Area could be used as an example. Prospects in several of these segments may have different motivations. Perhaps a property owner abandoned a home in a declining neighborhood, or a different selling situation occurred, and so on.

Mistake #13: Failure to track, measure results, and act on data

It is important to track as many metrics as possible for your wholesale real estate business, including lead generation, qualification, and closing. You can't repair a broken thing until you realize it's broken. There is no way to get better outcomes without comparing them to the past. Evaluate the progress made with each prospect through cold calling, voicemail, email, text, and direct mail in real estate. Don't just look at the time it took for a deal to get to closing; some of those deals never would have happened if the numbers hadn't checked out. Determine the percentage of leads that were not converted into sales due to prospect decision making. You can sort the information that you've gathered from follow-up activities and the stuff that was "just not a deal" this way. Establish a method to record the progress of each lead you pursue, the outcomes of each action, and so on. Use a spreadsheet or other simple database system that allows for quick data entry.

Key Note: Select a time interval, a week or a month, and review your actions to identify repeating trends. Seeing them may inspire you to try a new approach to see if it yields better results. As an example, you could decide that ringless voicemail is preferable to texting.

Mistake #14: Not keeping the goal in mind

Your first objective should be to set up a simple appointment with the property owners, even though you may feel pressured to try to sell the property right away. Focusing on that simple first step rather than always trying to sell your business as the solution will yield better results.

Key Note: Open the door for a casual chat, during which you can gently steer the seller toward scheduling an appointment.

Summary

Many people who make a living through cold calls are surprised to learn that success is possible, provided they don't make any rookie mistakes. Utilize modern tools, offer your services as a consultant, and regularly assess your progress. Make use of your failures as learning opportunities; don't be afraid to try new things or alter your strategy.

- RE Doers Family