Phone sales work. There is a very high-income niche of the stock brokerage industry in which the sales reps almost never meet their clients in person. Maybe you’ve even received a call from someone offering you a high quality recommendation and then asking if you’ve got $10K or $25K you’re ready to invest in that recommendation now.
So why doesn’t negotiating on the phone work in real estate investing? Why can’t you call a prospective seller in Portland and just qualify them and ask to buy their house on the phone?
Well, you can actually. But you just have to expect a very, very, very low success rate. Why? In my free video “Seven Biggest Mistakes in Portland Real Estate Investing” I talk about the pure power of communication lost negotiating on the phone. You can discover how improper use of the phone can dramatically reduce your ability to buy profitable real estate in the video there.
In addition to the lost power of communication, I recommend strongly against trying to hunt for property over the phone for three reasons I’m going to share with you now:
- A higher level of distrust of “phone strangers”
- The physical nature of real estate
- The caller’s hidden reasons for attempting the transaction by phone
Mother Always Said to Never Talk to Phone Strangers
On the phone, it’s not like meeting a stranger in person.
Think about your typical reaction to a stranger calling you. Aren’t you immediately just a little cautious? Who are they? Why are they calling you? Especially if they’re calling you at home, in a very real if unconscious way, they’re an uninvited guest. Even if they’re calling regarding an ad you’ve placed in Craigslist, chances are at some level you’re trying to figure out if it’s okay for that person to come to your home … come into your home.
Now you’ve got a better sense of what your prospect is going through when you call them. They’re going to be suspicious and likely unwilling to give you all the details. After all, at this point in the game, you know a lot more about them than they do about you, and nobody likes to be at such a clear disadvantage.
The Hands-On Nature of Real Estate
The fact is, stocks are in a way made for phone sales. Very few people really understand money, and once money is stashed in a savings account, retirement fund, or portfolio, it’s all conceptual. That’s one of the reasons for the credit card crisis. People can’t see the money leaving their hands, so they tend to be less adept at handling it. So to have a voice without a face talking about concepts that barely mean anything to them is all sort of par for the course.
Exactly unlike that, real estate is very tangible. You can see it, touch it, smell it. So suddenly that faceless voice is not talking about some concept you barely understand and don’t connect with anyway. That voice is negotiating on the phone with you, trying to take your home. And if that voice is trying to take your home over the phone for half of what you think it’s worth, you’re going to get defensive. Maybe even angry. How could this possibly go well?
The very best way for that prospect to connect you to their home is to enter it as an invited guest. In my trainings we spend a lot of time on how you can create that effect, but basically, you want to begin the process of letting them get to know, like, and trust you on the phone, and then get the appointment. A fantastic resource I recommend often is How to Win Friends and Influence People by Dale Carnegie. It’s a classic guide on helping people to know, like and trust you so they’re willing and even eager to do business.
The Investor’s Easy Out of Negotiating on the Phone
By far, I believe this is the real reason investors are not more successful by phone. It’s simply that the phone is a cover-up to shield the investor. In my own experience and in talking to other investors I’ve discovered that too often, we get on the phone and get pulled into the prospect’s world. We answer all the prospect’s questions, even when it’s not the right time and place, because it’s easy. We avoid rejection and get to seem like the expert. In reality, we’re giving them more and more ammunition to say “not interested.”
It’s ironic. In trying to avoid rejection, we create it.
And of course there’s the other part of this. Maybe you’ve been the one receiving a call from a telemarketer who seems totally and utterly confident and relaxed. It puts you at ease and makes you more likely to complete the call. On the other hand, you’ve probably received a bunch of calls where the caller sounded like a robot, or pushy, or uneasy. Chances are, you responded by being quick to get off the phone. Just like that, if you begin negotiating on the phone and your actual intent is to avoid getting with the prospect in person, they will hear it at some level, in your choice of words and how you speak, and they will deny you.
I’m not going to tell you that it’s necessarily quick or easy, but there are a few steps you can take to become great on the phone:
- Get clear that your purpose on the phone is to get a face-to-face appointment
- Spend a little time getting to know them as a person and letting them get to know you as a person
- Have or develop a script that you practice until you are comfortable with it, including your responses to inevitable questions that can derail the call
- Be prepared to get on the phone and practice, practice, practice with real prospects to get good
The phone is a necessary and critical part of how to invest in real estate in Portland. If you are willing to avoid negotiating on the phone, get clear on your purpose and put in the time, your phone skills can give you a leg up over the competition and firmly establish your ability to create the income and lifestyle you desire and deserve. Take action and prosper.