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This week, we’re here to begin tackling the most common objections when placing offers on properties.
And it occurred to us that jumping in and just tackling the objections doesn’t give you the “foundational knowledge” or “thinking” behind what we’re doing.
The saying goes that without a good foundation a house isn’t going to last very long.
And neither will your negotiation skills.
So…With that in mind, this week, we wanted to share with you something we wrote up a while back for one of our newsletters.
It’s the “Science behind Persuasion”.
This article gives you a “behind the scenes” look at how negotiation and persuasion work.
And how, very often, getting your way is more about knowing how human psychology works than being logical or rational.
Today, dive into this article…we know you’ll enjoy it!
Over the years it's become obvious to us that if you *really* want to achieve a high level of success at something you'll have to dedicate hours to your craft. In some circles 1,000 hours is discussed as the time it takes to master anything and in some recent new bestsellers, 10,000 hours is used.
Whatever it is, to really get good at something, you need to study and you need to practice. With investing, of course, it's no different. But what's often overlooked is the need to become a Jedi Master in not just "cash flow analysis" but you must develop other skills as well.
One skill that we initially overlooked was the ability to get people to "sign on the dotted line".
Even if you grew up in a family that treated salespeople as insects that needed to be exterminated you'll eventually need to develop an appreciation for sales to maximize your efforts.
Real estate investing is a real business after all.
So with a vivid image of a crushed mosquito in mind let's take a peek at some scientifically tested methods of improving your real estate investing.
We often hear that one of the most difficult things for investors to do is to get people to their rental property to view it and then sign a lease for it.
And obviously mastering this skill can greatly increase your enjoyment of investing.
When you can fill a vacant room, house, apartment or condo with relative ease your investing confidence begins to shoot through the roof.
And with confidences comes conviction and with conviction comes even greater and faster achievement.
With that, here are two things to consider when trying to fill your next property:
In Robert B. Cialdini's Book, "Yes - 50 Scientifically Proven Ways to Be Persuasive" he covers a strategy we've been using for some time.
Here's how it works...
If someone publicly states that they will act in a certain way, they are motivated to behave consistently with their commitment.
There's a study in the book where a restaurant owner reduced the percentage of no-shows for his dinner reservations by having his receptionist make a very subtle change to the way she took a reservation.
Instead of ending the call with, "Please call if you have to cancel."
She began saying, "Will you please call if you have to cancel?"
And as expected, nearly all customers committed to that question by verbally saying "yes".
The immediate results were impressive.
The restaurant no-show rate dropped from 30 percent to 10 percent.
That small change is enough to make or break an entire restaurant's success.
For years we've been doing the same thing with our showing appointments for properties.
After making the appointment with a possible tenant we say,
"Will you please call if you have to cancel?".
Just asking that question increased our appointment show rate at our properties.
And often we go one step further,
"Will you please call if you have to cancel because I won't make the long trip to the house if you can't make it? Will you do that?"
And of course 99% of the time we get a verbal "yes" from the person on the other end of the phone.
That adjustment has further increased our show rates to properties.
Did you notice that in the above question we give a reason why we want them to call us if they're going to cancel?
That's by design.
In another one of Cialdini's books, he proves that by adding the word "because" to your request it increases acceptance and compliance with that request.
And he further proved that whatever is said after the word "because" makes no difference. It's the word "because" itself that increases the acceptance of your request.
Now, because we're no slouches let's take this one step further.
Cialdini ran another experiment.
College researchers asked volunteers to make verbal or written commitments to participate in a project.
And they got the same percentage of people to commit to the project whether it was verbal or written.
However, of those people who agreed to the project verbally, 17% actually showed up as promised.
Of the people who wrote down their intent to participate, 49% of those people kept their promise to show up.
People want to stay consistent with their actions. So when they take the "action" of writing down their intent it increases their commitment.
So how do we incorporate this knowledge into our investing?
Here's something we do ourselves fairly regularly, in addition to what we've discussed above...
We simply ask, "Hey do you have a pen and paper handy? I'll spell out the address of the property for you and give you my cell phone number."
This way we get the possible tenant to take make an "active" commitment to write down the address, our phone number and usually our name and time of appointment.
We can now almost accurately guess what our show rate will be at a property based on how successful we've been at getting people to take written action with us.
To increase your show rate at your properties...
1. Get a verbal commitment from your possible tenants that they will call you if they have to cancel.
2. Give a reason why you're asking them for that by including the word "because" in your request.
3. Try to get the person to write down your phone number, the address of your property and even the time of the appointment if possible.
Don't force any of this stuff, you'll come across like a creep if you yell, "I'm not getting off the phone until you write down my phone number!"
It's got to come out naturally.
And there you have it.
We have a bunch of other Jedi Mind Tricks up our sleeves ... but we'll save those for another day.
Until next time ... Your Life. Your Terms!