Close the Deal

What it is

Closing deals — the non-sleazy sales method. A lot of people get uncomfortable talking about sales because of the image they have in their head: the sleazy car salesman. Nobody wants to be that. Here’s how you make sales without being sleazy: good sales is simply being a good deal maker. A good deal maker does a good job of understanding what both sides want and makes compromises that don’t feel like compromises.

The formula: strength of your offer equals your value proposition times your authority, divided by the perceived effort on their side. Authority comes down to three things — rapport (how much they like you), trust (how much they believe you’ll do what you say), and expertise (how much they believe you can actually do it). Value proposition is the list of reasons you’re better than the alternative. Perceived effort is how much they’d have to do to get from here to closed. You want that number as low as possible.

Why it matters

The close is four steps: intro, walkthrough, negotiation table, transition.

The intro is short. Seventy-five percent of the whole deal is the walkthrough. That’s where you’re doing two things at once: building a scope of work and drilling for the oil — meaning the real reason they want to sell. You have to understand what’s actually driving them. Do they need to sell fast? Are they embarrassed by the house? Did they deal with a wholesaler before who called back 30 days later and said they couldn’t close? That’s the oil. That’s what you bring back up at the negotiation table.

I walk through with a GoPro. I’m talking to the camera like I’m giving a construction bid — “Oh gosh, we’re going to have to do floors. Looks like we got a little leak up there.” They’re hearing all of this, but I’m not personally attacking them or their house. I’m the construction guy figuring out what this is going to cost. The walkthrough is where you’re actually calculating the rehab budget while also deepening the relationship.

At the negotiation table, I ask flat out: how much do you want for this house? Ninety-nine point nine percent of the time, if you’ve built authority, they tell you. Then I put the numbers into the Flippin’ Calculator right in front of them. They see the ARV, they see the rehab cost, they see what I can pay.

You start with an anchor — the lowest price, which is where my math lands. Work up from there if needed. The key is knowing your top number before you sit down. Don’t bend too far. You can make a good living buying houses at reasonable prices and managing construction well.

How it shows up

The transition is what I call peeing on the tree. You’ve signed a contract in someone’s living room, but that doesn’t feel real yet. The second I leave, I’m calling the title company — I want people reaching out to them immediately, because that’s when it becomes real to the seller. You mark your territory. Before that, it’s just you and Becky in a living room with a piece of paper.

One thing that matters a lot on your value proposition: you’re the one buying this house with your own money. It’s already lined up. A wholesaler is going to get it under contract and then call somebody like me to close it. A lot of times they can’t find a me, so they call back 30 days later and say they can’t do it. That’s the alternative to you. Make that clear.

The perceived effort side is equally important. They don’t have to clean out their stuff. No inspections, no realtors, no BS. I’ll bring a mobile notary wherever they want — I’ve signed papers in a Hardee’s, a Wendy’s, people’s personal residences. They just receive a check. That lowers the barrier.

If I go on an appointment, I am leaving with a contract or that deal is out of my pipeline.

Related

negotiation, title company, max allowable offer, rehab budget, ARV, fliporithm, drilling for oil, peeing on the tree, closing costs, motivated seller