Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Good day.

Steven Butala:                   Welcome to the House Academy Show, entertaining real estate investment talk. I'm Steven Jack Butala.

Jill DeWit:                            And I'm Jill DeWit broadcasting from sunny, Southern California.

Steven Butala:                   Today, Jill and I talk about the right and the wrong way to build a relationship with the seller.

Jill DeWit:                            Gee, why is that important, Steve?

Steven Butala:                   What would we do without sellers?

Jill DeWit:                            Hmm, there's a thought.

Steven Butala:                   A long, long, long time ago, I got sent to, by a boss, a seminar. And the whole seminar was this, for any business that you're in, any business, there's a moment of delivery. And that moment is this... My phone going off and failing-

Jill DeWit:                            Is that the moment of delivery?

Steven Butala:                   Failing at this podcast right now. There's a moment of delivery where your customer decides it's going to work or it's not going to work. Are the companies going to work or... It always comes down to one moment. In healthcare, it's that moment when a healthcare worker, whether it's a doctor or a nurse or anybody, sits on the side of the bed and has that conversation with the patient.

Jill DeWit:                            With the patient.

Steven Butala:                   Yeah. Or in accounting, it's that moment you sit down... If you're a tax accountant, that moment that you sit down and say, “All right, the preliminary tax return is done. And here's the deal, we have a few options. But here's the good news or the bad news.” Or whatever it ends up being.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   It's no different. That always stuck with me, obviously. It's no different in this business.

Jill DeWit:                            Exactly.

Steven Butala:                   So, that moment with the seller when they decide to sell to you for hopefully the price that you want. That's the moment where everything beautiful starts to happen in real estate.

Jill DeWit:                            Thank you.

Steven Butala:                   Before we get into it, let's take a question posted by one of our members on the houseacademy.com online community. It's free.

Jill DeWit:                            Jason asked, “I have a seller who keeps changing their mind. Does this ever happen to you and what do you do?” Oh my goodness, yes. This does happen.

Steven Butala:                   This ties right into this topic, actually.

Jill DeWit:                            You know what's interesting about this, Jason? This is why you have to act fast. The minute they agree, you're out there. If you don't have the signed purchase agreement, you're showing up on their door if you have too and getting it signed. And you're opening escrow. That's how we solve it. Does this happen to us? Heck yeah. So, how do you solve it? Act fast. The minute they're on their high, and they've agreed to it and they're ready to go, don't let them overthink it, because they will. You know, we all do that on things like this. It's kind of a natural thing, like, “Am I making the right decision?” So, the best thing you can do is, like I said, act fast. Get it in escrow and when the process has started, then it's harder for them to back out and change their mind when things are moving forward and they see that the money's being set up and coming their way. Then they get excited, by the way, once they really see the process going.

Steven Butala:                   What do you do when they do change their mind and they're adamant about it. Can I ask you a few questions quick?

Jill DeWit:                            Sure. Where am I in the process?

Steven Butala:                   Because I know you're the expert on this.

Jill DeWit:                            I am.

Steven Butala:                   Yeah, they just say, “You know what? I'm sorry.” We had this happen to us on a deal recently in Mesa.

Jill DeWit:                            Yeah.

Steven Butala:                   Actually it was like, I blamed it on my wife situation. The guy said, “Yeah, I'm happy to sell you my house at this number.” Then, he called back and said, "My wife already talked to people at ugly houses and they're doing a deal."

Jill DeWit:                            Yep. I know.

Steven Butala:                   What do you do?

Jill DeWit:                            I tried to explain to him that it's not too late to get out of it. I let him know that he does have options, even though he signed a piece of paper, same as with us. You can still change your mind, like you're doing with me right now, sir. So, anyway-

Steven Butala:                   It happens.

Jill DeWit:                            So, I just let him know his options and spell it all out. And I hate to get into a bidding war. That's the thing that really bothers me. But I have told people, “Shucks.” Which is true, I had some wiggle room in my offer price. I could have gone up. And I don't want them to feel bad, but they probably end up feeling bad. Like, “I should've stuck with her.” And I've had that too, by the way. I have seen transactions where they didn't stick with me. I'm following it and then I see it relisted or something else happened, it fell through. And sometimes I've moved on. Most of the times I've moved on. I'm like, “I allocated the funds somewhere else. Hey, I wish you all the best”, kind of thing. If it falls through, like I said, I let them know their options and then wish them well and move on. There's more mail.

Steven Butala:                   Here's the position you want to put yourself in that solves all of these problems, not just this one, but all problems in real estate acquisitions. You want to be talking to this person who changes their mind, and looking down at your desk, and seeing a stack of purchase agreements. If this person actually changes their minds, then you pickup that purchase agreement and throw to the side and say, “Great, see you."

Jill DeWit:                            Next.

Steven Butala:                   Next purchase agreement.

Jill DeWit:                            Exactly.

Steven Butala:                   And call the seller.

Jill DeWit:                            That's the best.

Steven Butala:                   So, that solves everything in my opinion.

Jill DeWit:                            I always leave the door open, though, too. “Hey, if anything changes, I still got this money right now, give me a call.” Give them a timeline, but then let it go.

Steven Butala:                   It's a topic for another show, but I was just watching a documentary on the culture of negotiation. Some cultures that's all they do. It's built in their soul.

Jill DeWit:                            Yeah.

Steven Butala:                   The asking price never is the price.

Jill DeWit:                            I believe that.

Steven Butala:                   It's never the price that anything is sold for.

Jill DeWit:                            They probably do that in the grocery store, like, “Can't you give me this milk for X?"

Steven Butala:                   Yeah.

Jill DeWit:                            Actually, I've seen that.

Steven Butala:                   Well, there's also cultures where it's absolutely unacceptable. Lots of parts of Asia, like Japan, where it's absolutely unacceptable to negotiate at all. The price is the price. And it's an embarrassment to yourself to even...

Jill DeWit:                            Suggest.

Steven Butala:                   What you're suggesting by negotiating is it's not worth what they're asking. You wouldn't even start down that path of trying to buy whatever it is that they're selling or do a deal if the price wasn't set perfectly or... You wouldn't agree on that price in the beginning anyways. So, I've gone on record for years on these shows. I can't stand negotiation.

Jill DeWit:                            Oh, I know.

Steven Butala:                   That's how I devised this whole system of making an offer price, and signing it, and sending it.

Jill DeWit:                            That's true.

Steven Butala:                   I think negotiating's a waste of time.

Jill DeWit:                            It is. You're talking to everyone. Because everyone's going to have a number, but you only want to talk to the ones that want to sell at your number.

Steven Butala:                   That's it. Set the price, follow through.

Jill DeWit:                            Thank you.

Steven Butala:                   Rinse and repeat. Today's topic, is it right or wrong? Or the right way or the wrong way to build a relationship... Oh, didn't we already say this? Oh no, we were still on the question.

Jill DeWit:                            Yeah.

Steven Butala:                   Today's topic, the right and the wrong way to build a relationship with a seller. This is why you're listening. The topic was so close to the question that I got confused.

Jill DeWit:                            Uh-huh (affirmative).

Steven Butala:                   Oh really, Steve, you're confused again? Oh really, Steve you can't read the teleprompter again? Congratulations.

Jill DeWit:                            Yeah. Get to know your equipment. That's what I usually get. You notice I was refraining from that. I was letting you take care of this. I'm saying nothing.

Steven Butala:                   Jill and I got in this heated marital type argument one time, a long time ago, and it all centered around me as an idiot, saying this sentence. “Jill, get to know your equipment.”

Jill DeWit:                            Oh, just don't do that.

Steven Butala:                   That sent us into a tailspin.

Jill DeWit:                            No. You better believe that every chance that it comes up that I could possibly throw that in there, oh I do. Hey, what's the problem? Get to know your equipment.

Steven Butala:                   And she's right.

Jill DeWit:                            Hey, it's an oven.

Steven Butala:                   That's the thing.

Jill DeWit:                            It's an oven, figure it out. Get to know your equipment. It's a washing machine. Figure it out. Actually, the dishwasher's been the latest one.

Steven Butala:                   Is there anything around that house that you're uncomfortable operating, at all?

Jill DeWit:                            Nothing.

Steven Butala:                   That's what I thought you were going to say.

Jill DeWit:                            No, absolutely not. If anything, remember the other day I was trying to hang a TV myself. I was very proud. I'm like, I got this, leave me alone.

Steven Butala:                   Just a pile of-

Jill DeWit:                            And it was just at the end where I just kind of need an extra pair of hands over here please. Then I had to call in reinforcements. But, no, I got this. So, okay. So, did you write this topic for me? Right way and a wrong way?

Steven Butala:                   Yeah, I did actually. Because, and here's why. And I'll preface it like this in five seconds or less. I have never met anyone who can deal with the seller, and get what they want out of a seller, like you.

Jill DeWit:                            Thank you.

Steven Butala:                   I was telling somebody this recently. Of all the people on this planet who buy and sell these specific product types and how we do it, we are the experts. There's no one better, that's going to receive a call from a seller on a house that's getting ready to be wholesaled, than Jill.

Jill DeWit:                            Thank you. I got to tell you, my staff was even telling me that the other day. It was really nice. The calls are routed through our office and then we forward them to different boots on the ground. They were listening to some of the calls as we're preparing to launch Helsa County, which is there now.

Steven Butala:                   Long since launched.

Jill DeWit:                            Yes. We're putting together a house scanning program. They're listening to the calls and it was very, very sweet. One of our staff said, "You know, they're not doing bad, but they're not you." It was very nice. I'm going to start with the wrong way and then I'm going to tell you the right way. I'm sure you're all going to go, "Duh", but people still do it. It's important to talk about.

Jill DeWit:                            The wrong way to build a relationship with the seller is, number one, talk over them or talk down to them because we all love that. Should not... Get to know your equipment. Get to know your property. Could you imagine? Do you know what you own? Wouldn't that be hilarious?

Steven Butala:                   Oh my gosh!

Jill DeWit:                            Oh, that would be awful!

Steven Butala:                   It's insane! That's not how you get-

Jill DeWit:                            But I'm sure you get people. You need to hear it to know this. Another thing that the wrong way is, flake on calls and your follow up. “You know what? It's after ten. Everybody's asleep. I'm not even going to bother. I'm not even going to send an email. They'll figure it out.” Or, “I just got busy. They know”, kind of thing. They're probably sitting by their phone waiting for you. They don't know and even an email, if it's too late to call I get that, but an email saying, “I'm sorry.” Some way of reaching out to them, is appropriate.

Jill DeWit:                            My third way of the wrong way to build a relationship is let's use confusing real estate jargon and really talk about, “Well do you have equitable title, and you have legal title, Mr. Smith?” You can't do that. They're not going to know what you're talking about. There's other things you can bring up about their mortgage situation or things like that-

Steven Butala:                   No. That's not good to do that either.

Jill DeWit:                            They're not going to understand. That gives you an example of the wrong way to build a relationship. Now, let's talk about the right way. If you do these three things for the... This is the majority of it, these three things, you're golden.

Steven Butala:                   I want to hear this too.

Jill DeWit:                            Okay. Number One is: treat them like your family that you like.

Steven Butala:                   Not all your family, just the two or three people in your family that you like.

Jill DeWit:                            Exactly. Treat them like the family that you actually do want to travel with. There's really only one or two. You treat them like that, it really goes a long way. Talk to them like your brother. "All right, here's the deal. I know you owe this much in taxes. I know what the kitchen looks like and I know you need some money to move. What if we work it out this way? I can pre-deposit this much money so that'll get you some moving funds, moving allowance. Don't even worry about the kitchen and, heck, I'll throw in the storage pod for you." Or something like that.

Steven Butala:                   This is great advice.

Jill DeWit:                            Treat them like that and help them solve their problem.

Steven Butala:                   Help them solve their problem, ding, ding.

Jill DeWit:                            Mm-hmm (affirmative). Number two, do what you say you will do. It's too easy nowadays, with our phones and our calendars, to set an alarm. I can talk into my phone and say, “Remind me today at three o'clock to send Mr. Smith a note.” That kind of thing. If you say you're going to call, call. If you say you're going to email, email. If you say you're going to close on Tuesday, make it happen. Do whatever you have to because these people are counting on you. That makes a difference.

Jill DeWit:                            The third thing, for me this is the most critical thing that I see people getting wrong, is they don't make the process easy. I am absolutely positive that a number of the sellers have sold to us because, whatever it is they call me, I'm like, “Hey, you know what? Don't worry about it. Here's what we're going to do.” I make it simple, easy, and we're going to get it done. That's it.

Steven Butala:                   Whenever I'm talking to a seller, in the back of my mind for some reason, I'm always thinking, "I need to establish this person's trust." These shows that we have, these talk shows that we have, are all about establishing trust. How do you do that? What's the fastest and easiest way to establish someone's trust, in my opinion? Just tell them the truth.

Jill DeWit:                            These three things.

Steven Butala:                   Just tell them the absolute truth. Yup, buying and selling houses is extremely profitable, but it's hard and the learning curve can be steep for some people. For other people, it's a logical extension. It's the same thing with the seller. The other thing with sellers is solve their problem and listen to them. The only way you can do that is by listening. Every single house that we've ever done, the seller calls and says, "Look..." It's what Jill just said.

Jill DeWit:                            There's always something.

Steven Butala:                   It might be something like, "I'm embarrassed about what happened in my basement."

Jill DeWit:                            I don't want people to walk in through here.

Steven Butala:                   Yeah.

Jill DeWit:                            I don't want to do an open house.

Steven Butala:                   So they've chosen whatever that is over money.

Jill DeWit:                            Thank you. I know I need new carpet. Thank you.

Steven Butala:                   They've chosen whatever that is over money.

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   That's good news for you because you're all set up to figure out whatever's going on in their basement, or get some furniture that these people can't get out of the attic, or on and on and on. There's a lot of people in this business who... Accounting types like me or paper investor types, there's tons and tons of businesses, people... Way more people like me than there are like Jill. They just want to talk to a human being on the other end and understand that. There's some social thing that, maybe it's a thing in their life that they need to move across the country.

Jill DeWit:                            Mm-hmm (affirmative). Exactly. Now you know the right way and the wrong way.

Steven Butala:                   Hey, we know your time is valuable. Thanks for spending some of it with us today. Join us next time for the episode called, How to Sell a House Before You Buy It.

Jill DeWit:                            And we answer your questions posted on our online community at houseacademy.com. It is free.

Steven Butala:                   You are not alone in your real estate ambition. That's complicated for people like me, what we just discussed.

Jill DeWit:                            Why is that?

Steven Butala:                   And I know it's so easy for people like you. It just is Jill. The emotional, personal story component of real estate investing, specifically with houses. It's a lot easier with land. It's really easy with commercial real estate, but specifically with houses, it's hard for people like me to swallow.

Jill DeWit:                            Because they have a story, you have a hard time sympathizing, or remembering?

Steven Butala:                   It's a pain in the butt for people like me to deal with. It's not that I don't sympathize with it, we've all been there. I know everyone's got a personal story. It's just, my initial reaction is, “Oh, here we go. I don't want to listen to this person's life story now."

Jill DeWit:                            I would think that you're a...

Steven Butala:                   We did a deal in Mesa on Orange. That Orange deal?

Jill DeWit:                            Mm-hmm (affirmative).

Steven Butala:                   There was a ten year sobbing story about that house and why it was-

Jill DeWit:                            You know what's funny? She and I connected. I don't know if you remember that.

Steven Butala:                   Of course.

Jill DeWit:                            I had a great boots on the ground team, but for some reason, she liked talking to me. So if anything went wrong, any little thing. It was great. This is a good little thing to end on. I built such, in just a brief amount of time, built a really good relationship with her, that any call from escrow or my boots on the ground or anything, she would call me to go, "Jill, is that right? Jill is it going to happen? Jill is that-"

Steven Butala:                   See, that's what I mean. How much of a pain in the butt that is.

Jill DeWit:                            It was so funny, but it's okay. It's a three minute phone call to make her feel good. It was a three-minute phone call, I made her feel good, and we got the deal done.

Steven Butala:                   All right.

Jill DeWit:                            That's what it's about.

Steven Butala:                   No. I'm not disagreeing with you. I'm just saying, there's probably more people who are listening to this that have my approach to real estate investing than you.

Jill DeWit:                            That do have yours, yes.

Steven Butala:                   That's why I say it.

Jill DeWit:                            Well, then hire somebody like me and that's okay.

Steven Butala:                   Exactly.

Jill DeWit:                            Wherever you're watching or wherever you're listening, please subscribe and rate us there. We're Steve and Jill.

Steven Butala:                   We're Steve and Jill. Information-

Jill DeWit:                            And inspiration-

Steven Butala:                   To buy undervalued property.