10 Steps To Close Your First Wholesaling Deal & Cold-Calling Scripts

10 Steps To Close Your First Wholesaling Deal & Cold-Calling Scripts

Wholesaling homes is a lot like riding a bike, it takes practice to get started, but once you figure it out you’ll never forget. Sure some days it may take 1000 phone calls to find a deal, but others it’ll only take 100. In the early days, your goal should be to get as much practice as possible. You want to learn the lingo, identify what is motivating a particular owner to sell, overcome objectives and get good at your pitch. As you develop your buying (and selling) style, your odds of success will improve.

The important thing is to take as many shots at bat as possible – dialing hundreds of numbers per day is the easiest way to accomplish that. When starting, consider spending an hour per day identifying high-potential properties: pre-foreclosures, probates, absentee owners and so on. Then skiptrace the properties to find the owners/agents, and dial Saturday/Sunday morning when the owners are most likely to pick up the phone. Pro-tip: if you decide to call during the week, call at 28 minutes or 58 minutes past the hour, when most people’s meetings have concluded.

While this guide breaks down a script for you to follow when calling, ultimately it matters more how you say something, then what you say. Confidence is the key when cold calling. And again, the more you do it, the more confident you’ll become. Ready to pick up the phone and start dialing? Great! Dive in and find out what to say!

Pre-knowledge: the factors behind why people sell

Before picking up the phone there are some things you need to know. Most people who are willing to sell their homes below market value (e.g. the properties you want) are either in a sticky situation or have experienced a life event. They will be emotionally charged, it's your job to be calm in the face of the storm. Here are a few of the common scenarios for when property owners have a higher likelihood of selling– they’re known as the 5D’s of real estate.

1. Diamonds - Not every homeowner is married, in fact, lots of bachelors and bachelorettes own their own home. Most of the time these are condos or small single family properties and when these individuals get engaged, they start thinking about upgrading to a larger piece of property.
2. Divorce - On the opposite end of the spectrum, is homeowners that decide to break things off with one another. When this happens, they may consider selling the house and splitting the proceeds to make the 50/50 split as straightforward as possible. Speed is of the essence in these situations.
3. Diapers - This is another time sensitive scenario. If a couple learns that they’re going to have their first (or second) child, often the first thought that comes to mind is finding a place with more space. They’ll often upgrade from a condo or small single family property close to downtown, to a larger place on the outskirts of town or perhaps a property that is located in a better school district.
4. Downsizing - After those kids have grown up, “empty nesters” once again evaluate their home. Does it make sense to keep the house? Should we move somewhere quieter? Should we downsize? Should we move somewhere else? These are all scenarios homeowners consider.
5. Death - this is the most unfortunate (and unavoidable) situation. A death of a partner, child, or parent often causes people to re-evaluate their property holdings. If you are going to try to target homeowners who have experienced loss, be kind.

Outside of the five D’s there are also a handful of other scenarios that may cause someone to re-evaluate their situation.

• Hardship - the loss of a job, a reduction in hours, an accident, change of governing regulations (short term rental ban), and other life altering events…etc.
• Success - getting a new job or a promotion, relocations, exiting a business…etc.
• Condition - roof leaks, foundation cracks, destructive tenants..etc.

Step 1: The opener - making a positive first impression

Before you pick up the phone, remember that you’re calling someone who does not know you, is busy and may not want to speak with you. Do not be the “car’s extended warranty” salesman that everyone despises. Your goal is to be their friend or trusted confidant who is helping them out of a potentially sticky situation. The opening sentence of your phone call is very important, state exactly what your intentions are upfront—do not beat around the bush.

“Hi my name is XXXXX and I work with a group of cash buyers who are interested in properties in the YYYYYY area. Do you have any properties, such as houses or condos that you might be interested in selling if the numbers made sense?”

Emphasize the ending: “if the numbers made sense” – this is key.

The goal from the opening question is to get the individual to answer “yes” or “no” quickly so you can move on to the next step (or move on). Do not say you are a buyer, unless you actually intend to be the end buyer.

Step 2: Confirm the owner/agent’s name and the address of the property

It’s important that you know who you’re talking to, just because you skiptraced a property, doesn’t mean that the person you’re on the phone with is the same individual you found. When the owner of the property confirms that they may be interested in selling it, reply with: “Great! Before we discuss any numbers or move forward, who do I have the pleasure of speaking with?”

When they reply, respond with:” “Nice to meet you XXXX. Could you confirm the address of the property that you might be interested in selling if the numbers made sense?”

They’ll provide you with the address and you’ll want to confirm it:

“Let me repeat that back so I make sure I got it right…The address was XXXX, correct?"

Step 3: Find out more details about the property

In step three the goal is to gather a few of the basic details about the property so that you can run the numbers and get back to them. Questions to cover:

• How long have you owned the property? Is it just you on the title?
• Do you currently occupy the property or do you have tenants?
• Have you replaced the roof in the time you’ve owned the property? What about the furnace, air conditioner, water heater, appliances?
• Have you ever remodeled the kitchen or bathroom? When was the last time you did that?
• Anything else that I should know about it?

Step 4: Confirm their “number” and timeline

“Okay great, thank you for confirming all of those details. As I mentioned, I work with a group of all-cash buyers who purchase property exactly how it is, so you don’t have to fix anything. We also pay all the closing fees and close on your date of choice. I haven’t run the numbers yet, but if I were able to get approval to buy your property, what number would that offer need to be? And how much would you need to walk away with in your pocket at closing?”

“Okay great! Assuming we are able to get somewhere in the ballpark of that number, what would your ideal timeline for closing be?”

Step 5: Set the scene for the next steps

This advice directly contradicts what the “real estate gurus” will tell you. They’ll tell you not to get off the phone until after you get a contract signed. The reality is that the conversation above should take NO MORE THAN 2 MINUTES to complete from start to finish. 99.999% of all property owners are not ready to sell their home on this call, and frankly that should not be your goal. Your goal is to plant the seed in their mind of potentially selling the home in the future. Don’t be the hard-pressure “sleazy used car salesman”. Instead:

“Fantastic. Thank you again for providing all of that information. I have all that I need for now, I’ll get with the rest of the team and circle back with you re: the numbers to see if it makes sense on our end and on yours.

What would be the best time to reach you this evening? And could you confirm the best email address to reach you?”

Repeat back their email address, and when you do, purposely mess up a letter or two. If they’re genuinely interested, they’ll correct you, if they are not interested, they’ll confirm the wrong one. This will save you a TON of time following up with people that won’t sell their home.

Step 6: Closing

“Okay great! I’ll give you a call at XX:XX PM. I hope you have a great day.”

Step 7: Analyzing the deal

The moment you get off the phone the hard work begins. You’ll want to gather as much public information as you can, then you’ll want to pull the numbers together.

1. Determine ARV- Look at the comps in the area to determine what the ARV (after-repair value) is, based on homes that recently sold (<3 months) with a similar layout in ideally the same neighborhood. The best tool for this is realtor.com.
2. Determine Mechanical Life - Based on the information they provided for the roof, furnace, air conditioner, water heater, appliances you’ll want to determine the remaining life of the mechanicals. Roofs last on average 20 years, furnaces last approximately 15 years, water heaters and appliances eight. If they rented out the property, cut those numbers (except for the roof) by 10-15% because renters are rough on properties.
3. Determine Rehab Required - Based on the last time they remodeled the kitchen / backroom you may or may or may not need to remodel it. Experts recommend that owners renovate their kitchen every 10 to 15 years.
4. Calculate Rehab Budget - Launch the free rehab calculator to determine how much it's going to cost to get the property in “perfect, sellable condition”. Pro-tip—renovations always cost more than you expect, so add in a buffer of ~10%.
5. Back into the Purchase Price (70% Rule) - This is more of an art than a science, based on the ARVs in the area, the estimated costs for renovations/rehab, and the buffer determine how much the property is “worth” today. Typically to make the math on a fix-and-flip or a wholesale contract work, you’ll want to follow the 70% rule. This rule states that a real estate investor should pay no more than 70% the ARV of a property minus the cost of repairs. So basically if a property has an ARV of $500k, and it will take $50k to rehab it, you should get it under contract for no more than $300k. But truth be told, this is a lot easier said than done.

Step 8: Write up the contract & prepare escrow deposit

This step is crucial. Buyers, like Jerry McGuire, want you to: “show them the money”. If you go into a conversation without a contract or an escrow deposit ready, you are not serious enough about the deal. Depending on what type of deal you are pursuing, you’ll want to use a different contract. You can download some of the most common wholesaling contracts here.**Important note:**We are not attorneys or realtors, and this isn't legal advice. The contracts should be reviewed by an attorney in your state prior to use.

When filling out the contract, use the purchase price you came up with in step 5. For the seller information, list the individual you spoke with (and anyone else on the title), along with their mailing address. Consider specifying that the escrow deposit will be paid upon the seller’s signature.

Step 9: Pre-write an email and call at the agreed upon time

Before you call the seller, draft up an email and attach the offer letter. In the body, include the details around the escrow deposit being made upon the seller’s signature. IMPORTANT: do NOT send the email, wait until you get the caller on the phone.

“Hi XXXX, its YYYYY. Is now still a good time to connect re: your property located at XXXXX Main St. Washington DC, 12345”

“Great! So I had a chance to run the numbers and connect with the team. I’m excited to share that we have put together an offer for your property.”

[SEND THE EMAIL]

“I just sent you an email outlining our offer to purchase. Can you open that up?”

Now you’ll want to walk them through your offer, the amount as well as the closing date. Ensure that you emphasize that it is an all-cash offer, that you will purchase property exactly how it is, so they don’t have to fix anything. Also point out that they will not have to pay the 6% realtors fees that normally come with selling a property.

“So what do you think?” Do not say a word, the person that speaks first, loses.

Step 10: Overcoming objections

Truth be told, whatever they say next doesn’t really matter. Ultimately they are going to be upset about the offer you provided, because it’s going to be way lower than the number they initially shared with you. As with most things people own, they think it's worth a lot more money than it actually is. The key to overcoming objections is being unemotional, yet empathic. You’ll want to exude confidence.

Here are a few of the common objections you may face, and how to overcome them:

1. I’ll have to talk to my [wife or husband] about it. “I completely understand you needing to talk to them. What do you think they might say?”
2. I’ll have to think about it. “Totally understand the need to think about it, as it is a big decision. And truth be told, I probably haven’t given you enough information not to think about it. What questions can I answer for you?”
3. That number is way too low. “I can completely understand where you’re coming from. As I mentioned we’ll purchase property exactly how it is, so you don’t have to fix anything. You won’t have to pay the 6% realtors fees that normally come with selling a property. We’ll cover the closing costs and we can close on the date you specify. Is there a number somewhere in the middle that you’d be more comfortable with?”

Assuming you’ve overcome the objections, and you’ve agreed on a price, now you’ll want to finalize the details.

“Great! So the next step is for me to send over an executable agreement for you [and your wife / husband] to sign. As soon as that doc is signed, I’ll fund the escrow deposit and I’ll start lining up the items for the closing process on XXX-Date. When do you think you’ll be able to look over and sign the agreement?”

“Awesome! I’ll follow up tomorrow night if I don’t hear from you! Thank you for your time!”

Congratulations! Assuming they sign the agreement, you’ve got your first property under contract! The next step is to line up the walk-throughs / inspections if you’re going to fix/flip, or assign the contract to the end buyer. At this point in the process, if you haven’t already engaged a lawyer you definitely should.

Bonus: Ten Powerful Phrases and Questions to Ask When Buying Property

Phrase #1: “You are right...” For example: “You are right, you should definitely consult your [wife or husband]. ” Or… “You’re right, your tenant shouldn’t have done that, I’m really glad we’re here to help you.”

Phrase #2: “You deserve...” For example, “You deserve to be free of this tenant so you can enjoy life.”

Phrase #3: “I’ll do the work for you…” For example, “I’ll do the work for you and handle evicting the nightmare tenant.” Or… “I’ll do the work for you and handle all the paperwork for closing.”

Phrase #5: “I don’t know if this is…” For example, “I don’t know if this is the best thing for you to do or not, but I would sell my property if it wasn’t cash flowing as much as I thought it would.”

Phrase #6: “I wouldn’t want to tell you…” For example, “I wouldn’t want to tell you to sell your house.” Or… “I wouldn’t want to tell you to kick out the tenants paying below market rent.”

Phrase #7: “Imagine what would happen if…” For example, “Imagine what would happen if we could cut you a check for $100k in 30 days.” Or… “Imagine if you didn’t have to deal with problem tenants anymore.”

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Question #1: “What factors would you consider when deciding whether to [x] or [y]…?” For example, “What factors are you considering when deciding to sell your house now or wait until spring?”

Question #2: “If you could choose…” For example, “If you could choose between receiving a lower price without having to do any work today, or waiting months and investing time to receive a slightly higher price, which would you go with?”

Question #3: “Would you be surprised…” For example, “Would you be surprised if we could close in two weeks?” Or… “Would you be surprised if we were able to come close to the number you’re looking for?”

Wrap up - 10 Steps To Close Your First Wholesaling Deal & Live Scripts

If you’ve made it this far, you’re already many steps ahead of your peers. Most people dive headfirst into wholesaling without a plan, that’s a recipe for disaster. Wholesaling is not difficult, it's just a numbers game. It's finding owners who either are going through a life event or are fed up with their current situation and are ready for change. It’s giving them the opportunity to free themselves from whatever situation they are in, so they can move onto what’s next. Your job is to find out what problems they are facing and offer them a quick and easy solution. Practice makes perfect here, so pick up the phone and start dialing.

P.s. if you need help finding properties or property owners to call, we'd be happy to help, get in touch with us.