6 Steps to Closing Real Estate Transactions
Real estate is a compelling opportunity for savvy investors just like yourself. A great real estate portfolio has the potential for growth, flexibility, and stability, providing a hedge against the movements within the stock market.
Many investors only think about the financial implications of holding property, but negotiation and sales tactics can make or break a transaction and even eager buyers will balk when a seller can’t sell with confidence. With these six steps to closing real estate deals, however, you can increase your chances of a successful sale, no matter what you have on the market.
- Do Your Research
You wouldn’t buy a property without doing adequate research, so why would you sell one without getting an idea of the current economic climate in your market?
Even if the property you are looking to sell looks like a “sure thing”, doing a little research is always a positive use of your time. The real estate market is always changing in response to local, state, and federal activities. From big national drivers, like mortgage rates, to local changes, like a major employer leaving town, there’s always something new to consider when pricing and marketing properties.
Prior to placing a For Sale sign out front or listing your property for sale online, take a few hours and do some in depth research into what the current real estate market in your area has in store. With an educated perspective and a good idea of what to expect from prospective buyers, you’ll be better prepared to spin your property in the best possible light.
- Prepare a Script
The best, most important things in life take preparation. You prepare for job interviews, going over question answers and rehearsing the recitation of your work history, and you prepare for presentations at work with things like talking points and PowerPoint slides. Selling a property requires the same high level of preparation.
Many agents and property investors follow a script when pitching to prospective buyers, but there’s a right way and wrong way to get started. Some less experienced sellers find scripts online, memorize word for word, and nervously regurgitate them to interested individuals. The pros know better. Yes, it’s fine to watch YouTube videos on successful scripts, read examples from top sellers, and adapt phrases other sellers use, but your script should truly be your own creation.
Anything but your own words in your own voice will appear disingenuous. Prior to networking, calling clients, or meeting with potential buyers, map out a script. Decide what things you’ll say to sell your property, connect with buyers, and build strong relationships – and do your best to stick with it.
- Keep It Simple
Evaluating a property requires a lot of information, from technical specs to cosmetic details. As the representative for your property, it’s only natural to want to share every benefit, no matter how small, with those considering a purchase. However, drowning buyers in a sea of information isn’t the best way to approach a real estate transaction.
Not all details about a property are integral to the decision-making process. All buyers have different priorities and interests in selecting a property. Rather than providing a deluge of facts, statistics, and market conditions, focus on the high-level information that is likely to be most important to your potential buyer. Most buyers will enter the process with an educated perspective. Talk to neighbors, search local trends, and see what local buyers of your property look at before making a purchase.
Speak frankly and honestly, answer all questions as asked, and save the detailed information for those who are ready to make an offer.
- Listen for the Right Deals
It’s best not to waste time and energy on a prospective buyer who is never going to make an offer on your property, and how prospective buyers talk to you can give you a hint early in the process. Most buyers will let you know their interest based on the questions they ask and their reactions to your answers, so do your best to note tone, phrasing, and word choice.
When asked questions, answer honestly. Don’t talk around a subject or try to distract buyers from what they want to know. Even those who are interested in your property will feel as though you have something to hide when you can’t hear their questions and provide relevant answers. You want to treat potential buyers like they matter, and listening sends this message.
- Sweeten the Deal
If you’re great at selecting properties, selling prospective buyers on their merits likely won’t be that hard. However, everyone that likes your property isn’t necessarily going to make an offer, which means you may need some leverage.
When you’re working with someone you think has the potential to make a mutually beneficial offer, any amount of wavering or delay can be extremely frustrating. Some waiting is a normal part of the process, but when things drag out too long, a little motivation can be all it takes to get a buyer moving forward.
When a prospective buyer is taking too long to act, a little perk to sweeten the deal can be the difference between contentment and resentment. Use what you learned while listening to that buyer’s questions to determine something hard to turn down – new appliances for a buyer who seemed concerned about the quality of appliances, for example – and use it to get the response you’re looking for.
- Select the Right Agent
Prospective buyers are interested in a great deal on a property, but they’re also interested in someone they can trust. A sales exchange can be a rocky road, especially when it comes to trying to reach an agreement all parties are happy with. Taking the time to find the right agent will increase the likelihood of a successful closing on your sale.
If you’ve ever encountered a pushy salesman, whether while buying a car or considering a new television at a big box store, you know how hard it can be to break through a facade. The ideal agent is someone who puts prospective buyers at ease by being himself or herself, rather than putting buyers on edge with an overly aggressive attitude or a falsely friendly demeanor. Find an agent who talks to buyers as you like to be talked to in their shoes and who offers them the same respect you like to see from others.
Your agent should be as honest as possible, which will show those you’re working with that both you and your agent are responsible, trustworthy parties to the potential real estate transaction. If you don’t like dealing with aggressive, intense agents who force a hard sell, don’t select or be that person for anyone else. The wrong attitude – an attitude focused on profits and not human interaction – will only turn buyers away.
We hope these six steps can help you ensure that every transaction reaches a successful closing.
Scott Clift is a licensed real estate broker with Westpark Equity Group and the private lending division of Westpark Loans. He has been in the real estate industry since 1994. His team of seasoned professionals specialize in providing real estate loans for investors and other self-employed individuals. When you are ready to invest in real estate, call Westpark Loans to secure your financing at (844) 574-LOAN or by visiting westparkloans.com.