IC elesson: What You Don’t Know About Seller Psychology (that’s ruining your marketing)
Think back for a minute—what was your first thought the first time you saw one of those handwritten signs at the highway entrance? You know, the one that says “Handyman Special Must Sale [sic] $87,000 555-5555”? Or the first time you saw a bandit sign that said, “I Buy Houses Close in 7 Days”?
Unless you happened to have encountered one of these messages for the first time after you’d already started studying real estate, your reaction was probably a mixture of:
- Suspicion (“Is this for real? Who tries to buy houses by putting a sign on a telephone pole?”)
- Confusion (“Handyman’s special WHAT? What are they trying to sale [sic] me, exactly?”)
- Mistrust (“How can they possibly buy a house in 7 days when it took my bank 45 to close?”)
- Curiosity (“Who puts these things up, agents?”)
Today, of course, you completely understand the goal of such marketing, because today you live in a bubble populated by other real estate entreprenuers who eat, breath, and sleep deals. Now that you understand what a handyman’s special is, and that a 7 day closing is in fact ppossible with other people’s money, your emotional reaction is more likely to be one of jealousy (“Dang, I wish I’d put my sign there”) than of confusion.
But—and this is important—You. Are. Not. Your. Customer.
Your customer, especially your SELLER customer, is NOT familiar with the world of, or the jargon of, or practices of real estate investors. Anything they do think they know is probably negative (“Oh, are you the people who litter my neighborhood with those signs??”), and in most cases, they didn’t ask for, expect, or even welcome the contact you made with them, apparently out of the blue.
It’s this disconnect between what you know and believe about your business and the real estate ‘investing’ business and what the typical home owner/seller prospect knows and believes about your business (which is probably nothing at all, but will tend toward the distrustful) that creates the atmosphere for the terrible, ineffective, in some cases threatening or insulting marketing that I see every day in the real estate investing world.
For instance, imagine that you are a ‘seller’ who has never offered his property for sale. We target people like this all the time; folks that we think might be interested in selling but who haven’t listed their houses, put them in Craigslist, or even thrown a sign into the front yard, right? It might seem obvious to US why we’d write a letter to the owner of a vacant ugly house or to someone who just inherited a property, but to that owner, the entire communication is somewhat mysterious (explaining the extremely common question, “How did you get my name? Why did you think my house was for sale?” that we get from these sellers).
So, you’re a property owner who has never officially offered his house for sale. You know nothing about the world of real estate investors or investing; you have a vague idea from watching infomercials that there’s such a thing, but it all seems vaguely sleazy and shadowy to you.
And you get a postcard out of the blue that says, in fake handwriting font:
I WANT TO $BUY$ YOUR HOUSE AT:
123 Easy Street
*Please Call Me*
I have cash!! J
Now try to imagine your thoughts, as an unprepared seller.
They might be along the lines of:
- Why does this person want me to think that they handwrote this postcard?
- What’s with the cutesy $$ and emoticons?
- Does she think she’s going to live in this house? It doesn’t even have plumbing. She probably doesn’t know that. I should really call a plumber.
- You don’t have cash, my house is a $180,000 house and no one has cash for that, especially not someone who uses emoticons in a postcard
- This person seems awfully interested in what she wants and not very interested in what I want
- It seems unlikely that this is for real, maybe I’ll do some research and find out later this afternoon.
Basically you’d likely be thinking anything and everything other than, “Hey, this looks really legit, I should definitely call because I understand exactly what to expect when I do!”
Now, imagine that you’re my 79 year old mother, and you get THIS gem in the mail:
Attention: Marilyn, I Urgently Need to Speak With You
About Your Property at
1234 Main Street
I’m hoping this card catches you in time. I’ve tried for hours to find your phone number using the internet but was unable to. L
This is my last resort. It’s important that I hear from you ASAP. I would appreciate it if you keep this matter private.
Yes, this is real. Yes, my mother—who’s actually been in real estate for 50 years, but on the rental side—received it. And yes, she panicked because she believed that there was some serious problem with the property that was causing a governmental or legal body to contact her about it. Yes, she called the 24 hour message and found out it was an investor looking to buy the property and yes, she was looking for some authority to whom to report that investor because it was her feeling that he was trying to scare old ladies into selling their houses.
The folks who created and mailed this marketing probably both thought the same thing: “I’ll rouse curiosity and that will raise my response rate. People will call just to find out what this is about”.
But your goal isn’t to generate responses. It’s to generate QUALIFIED responses, which means people who:
- Have a property
- Have a “situation” in their life that makes the property a burden
- Are willing to be flexible on the terms at which they sell because of the situation
- Understand that you’re a possible solution to that problem
As I’ve shown, you have no baseline level of credibility or even understanding among most sellers. Jumping right in with all the stuff you want (“Please call me today! I want to buy your house!”) or being vague or threatening or stalker-y (“I’ve tried for hours to find your phone number…”) or even trying to make the phone ring by setting up expectations you can’t meet (“You’ll get a fair offer”) are all approaches that make an already confused and suspicious seller even more so.
Instead, try being friendly and making your communication non-threatening (“If you’ve considered selling your house, give me a call and let’s see if we can make a deal”). Keep in mind that your potential seller is more afraid of you (or rather, of being taken advantage of, ripped off, embarrassed) than you are of him, and do what you can to EASE that fear rather than play off of it.
Your marketing will be much more effective if you do.