We’ve all met them: the off-market Sellers who we chat with and immediately have red flags that they are not reasonable. But what exactly defines “unreasonable”? For more real estate investors, an unreasonable Seller is one who has unrealistic expectations for their property’s value. But for us Thoughtful Real Estate Entrepreneurs, our perspective is different and we define “unreasonable Sellers” differently. In this episode, Jeff explains why those Sellers who most investors would disregard as “unreasonable” actually represent great opportunity for those skilled in the art of Relationship Capital and Seller Relations.
So I’ve got a confession. And I must acknowledge it’s gonna sound weird. It’s gonna sound weird, but I really like unreasonable sellers. Maybe that sounds totally insane, masochistic. And you might be wondering why in the world would you love unreasonable sellers? Well, in this episode, we’re going to talk about why they actually can represent a huge opportunity. So let’s keep the theme song we’re gonna jump right in.
Welcome to Racking Up Rentals, a show about how regular people, those of us without huge war chest of capital or insider connections, can build lasting wealth acquiring a portfolio of buy and hold real estate. But we don’t just go mainstream looking at what’s on the market and asking banks for loans, nor are we posting We Buy Houses signs are just looking for “motivated sellers” to make lowball offers to. You see, we are people-oriented deal makers, we sit down directly with sellers to work out win-win deals without agents or any other obstacles, and buy properties nobody else even knows are for sale. I’m Jeff from the Thoughtful Real Estate Entrepreneur. If you’re the kind of real estate investor who wants long term wealth, not get rich quick gimmicks or pictures of yourself holding fat checks on social media, this show is for you. Join me and quietly become the wealthiest person on your block. Now let’s go rack up a rental portfolio.
Thank you very much for joining me for another episode of Racking Up Rentals. Show notes for this episode can be found at www.thoughtfulre.com/e195. Please do us a big favor by hitting that subscribe button in your podcast app, it does make a big difference in helping other fellow thoughtful real estate entrepreneurs who are searching for a community in a message like this to find it. Alright, so onward with today’s episode.
So I said it in the intro. I love unreasonable sellers. Now first as a bit of clarification if this doesn’t go without saying already, as is the case with everything we discuss here on this podcast. For the most part, we’re talking now about working directly with sellers. I’m not talking about unreasonable sellers of properties listed on the MLS. That’s a whole different animal. And it’s a whole different animal that I don’t want to spend any time on myself at all just by the virtue of the fact that it’s on the MLS for the most part we go direct to seller because that’s where we feel the best opportunities come to utilize our relationship oriented talents, and to work directly with sellers to come up with plans that work the best as possible with everybody else with no intermediaries in the middle, clogging up the flow of communication and conversation.
So unreasonable sellers. Now the first thing we have to do is this we have to define what an unreasonable seller is now, this is where we’re going to start to see this conversation unfold. Because my definition in a thoughtful real estate entrepreneurs definition of an unreasonable seller is very different than a mainstream real estate investors definition of an unreasonable seller. So what do normal real estate investors kind of the mainstream community think of as unreasonable sellers? Well, by and large, they feel like unreasonable sellers or those with unrealistic expectations, right? And this is going to come down to price and terms and things like that. So, you know, I think if you wandered out into the wild of the mainstream real estate investing population and said, what, what is an unreasonable seller, they would say, you know, an unreasonable seller or someone who wants 500,000 for their $350,000 property, or an unreasonable seller is somebody who wants hard, earnest money right off the bat and won’t let you do an inspection that those are unreasonable seller definitions.
Well, I would give you a different definition, though, and we’re going to talk about why but my definition is not that at all, my definition of an unreasonable Seller is a person who is not willing to engage me in the way that I want to engage them. Okay, so what does that mean? Let’s just kind of unpack and explain that. You’ve heard me talk on this podcast about the idea of negotiation dynamic before negotiation dynamic is the whole setup, the whole context, the whole arrangement and the the type of situation that exists when we’re talking in negotiating with a seller, somebody calling you from a bandit sign and asking for you to submit an offer to them within the next day in writing is very different negotiation dynamic than sitting down in somebody’s living room. It’s not to say that one is better than the other, although I certainly am leaning towards our unique negotiation dynamic, which is sitting down in someone’s living room and having conversation openly and transparently with them. But it’s not that one is better or worse than the other, but they’re very, very different.
So when I think about how a person wants to engage me or is willing to engage me, then what I’m focused on is I’m asking the question, are they going to let me sort of play this game the way I want to play this game, they could be the most reasonable person in terms of price and terms and everything else. But if they want me to just text them an offer and never get to talk, I’m out. That’s not the negotiation dynamic I want, that’s not the way that I want to engage them. If they won’t, let me engage them the way that I want to engage them, then to me, that’s an unreasonable seller. I had a coaching client, within the last year, who talked to a seller sent a letter the seller called, and the seller said something to the effect of, okay, here’s my address, I want you to say a number. And if I don’t like it, I’m just gonna hang up. And to me, that is an unreasonable seller, the seller who wants too much money for their property, not an unreasonable seller, but this seller, the person who is not even barely going to treat you as a human and just says, I’m going to hang up on you, if I don’t like the number here, you’ve got 10 seconds to give it to me. That’s not the kind of person I want to deal with. And it’s not the kind of situation I would invest time trying to make work. So my definition of an unreasonable seller is somebody who won’t allow me to engage with them in the manner that I want to engage them doesn’t matter what the initial impression is of their reasonability in terms of value, or terms or timeline or any of that, if they will engage me in the way that I want to engage them, which is a real, polite conversation between two people ideally, getting together, ideally, sitting down in their living room, then I’m all in whether they think their $200,000 property is worth 2 million, or they think it’s worth 200,000. But if they won’t, I’m not interested in having that kind of conversation.
So when I say in this podcast, I love unreasonable sellers. What I love are the sellers, who are everybody else’s definition of unreasonable. I love the sellers, who right up front, make it clear that they want more for their property, then it’s really worth I love those people, I don’t love the people who won’t engage me the way that I want to engage them. So when I meet somebody who won’t engage me the way that I want to engage them, or it seems like they won’t, you know, in the very, very near term future, by the end of the first conversation, I am more than happy to walk away from that conversation. But if they will engage me the way that I want to engage them, but some of their initial clues they’re giving me around value and price expectations and timeline expectations are a little unreasonable. I’m okay with that. In fact, I love those people. So let’s talk about why those people can be great.
So the first reason is, the sellers represent a lot less competition from other investors. Now, I would argue, and you’ve heard me argue on this podcast that if we are doing marketing well, and if we are talking to the right people, we shouldn’t be facing a lot of competition. Anyway, in most cases, the competition that I face as a buyer is the status quo for the seller, they may choose to just keep the property because they’re not in a distressed situation. But that aside, there’s going to be less competition from other investors with this category of unreasonable sellers. Why? Well, it’s probably pretty obvious because the other investors have a different definition of unrealistic. And it’s a definition that come across a lot. And a lot of the mainstream real estate investing education sort of teaches that when we come across somebody who seems unrealistic, that this is a volume business, we should just cut our losses immediately and move on to somebody else, because there’s lots of fish in the sea, there’s lots of sellers in the sea. And if these people you know, want 300,000 For a $200,000 property, then we might as well just cut bait and move on and focus on more reasonable sellers. So I love these people because everybody else, as soon as they encountered them, they disconnect the conversation within three minutes because they just don’t see a way forward. They don’t have these investors the patience to unpack it. They don’t maybe have the understanding that it could be unpacked and that things could change throughout the conversation. They might not have the skills to do that, either.
Well, one thing that think that’s an interesting and important for us to keep in mind is that sometimes a seller may 1 project some of this outward bravado, so to speak about their price and their terms of their expectations that we deem as unreasonable. But what is it? Is it really them just saying, This is what I honest to goodness, think this property’s worth, I won’t take anything different or less or whatever, then these price and terms, or is it sometimes just a little bit of a test, I think it’s sometimes just a little bit of a test, they want to see how we respond. It’s like a maybe an intentional test. But sometimes it’s a test in the form of just a defense mechanism, right? They hear from you, their guard goes up, they’re thinking that maybe this isn’t as legit, as it seems, they call you with their guard up. And then they start saying these things as a way of almost playing defense by way of playing offense. They’re trying to protect themselves by coming hard at you with these hard expectations. But it’s really just a test. And a lot of times, it’s natural for us to assume that just because they’re saying and thinking and acting this way right now, is how they will be saying, thinking and acting stuff in the future. And that is not necessarily the case. Sometimes it’s just a hard outer shell, that once we get through that outer shell, the inside is completely different.
The second reason why I love these types of sellers, is because I’m continuing the conversation because I can tell that they’re willing to engage me the way that I want to engage them, regardless of their expectations around price and terms and all of that. And what does that mean? I love that they will give me time now again, to the regular normal, mainstream real estate investor, they’re thinking time you want to spend more time I want to spend as little time as possible, because I’ve got you know, a whole bunch more leads I have to churn through. And, you know, if I spend two hours talking to somebody doesn’t go anywhere, then that’s a dead end. And it’s time I wasted, I should have been doing something different. But we as thoughtful real estate entrepreneurs tend to look at this quite different. I like when the seller will give me time. Time for what though, you might ask well, time to make deposits into the little piggy bank of relationship capital. Our whole approach here is based on developing a lot of relationship capital with people that we can then convert into great deals that work super good for them, and super good for us. But you can’t just dump 20,000 coins of relationship capital into a piggy bank. In the first three minutes, it takes time to create those coins and drop them in the piggy bank and drop them in the piggy bank and drop them in the piggy bank. And so we need that time to develop that relationship, capital. And what else are we doing with this time? Well, we’re doing the thing that is maybe the single most central idea to everything we talked about here in the thoughtful real estate entrepreneur, which is solve the person we have to solve the person before we can solve the deal. And again, solving the person doesn’t happen instantaneously, it doesn’t happen in a first phone call, there is a massive peeling of the onion process that takes place as we are working to solve the person. So as the seller gives us more time, the better job we can do of solving the person which ultimately means we understand them how they think we can empathize with their perspective. So now we know better what we can put in front of them that they would like because we can see things through their eyes. And so we can better assess determine what they’re going to like to hear from us. That will lead to a yes. And so that is a result of time.
Now, if someone will engage us the way I want them to engage me, even if their expectations don’t seem reasonable at the beginning, if they will give us time, that can change. And that’s what leads to my third point about why I love these, quote unquote, unreasonable sellers, is that these beliefs that they are either holding or pretending to hold about the value of their property, right, their belief that their $300,000 property is actually worth 400,000 Whether they truly believe that or they’re just projecting that to us as a bit of a test and a defense mechanism. Guess what? That stuff can change. Over time. It can change as they feel more and more comfortable with us and don’t feel like they have to have that guard up. So as they lowered the guard their real beliefs about maybe the value and price of their property changes and becomes suddenly more reasonable. It can change over time with a slow presentation. Shouldn’t have different logical realities to them that kind of sink in and add up. And, you know, you mentioned this thing about the markets this way. And you mentioned this thing about the interest rates happening. And you mentioned this thing about days on market. And, you know, five conversations later, now, they’re actually logically seeing things in a little bit more realistic manner that can come from time as well. And mostly, it comes from the relationship as they start to feel more and more comfortable with us, they start to feel like they’re that piggy bank also is getting kind of heavy with these relationship coins that have been dropped in there. They’re believing what we say they’re trusting what we say. And all of that can really change the price and terms and stuff, expectations that they might have projected at us on in minute one of day one of conversation. Number one, all of that can change. But you know, what can’t change so much is who they are now how they’re acting, what they’re saying what they’re believing that can change over time, but who they are, is less likely to change, right. So if they are the person who won’t engage us the way we want to, it’s very unlikely that that’s going to change. But if they are, the person who will engage us the way we want to their beliefs, however, are much actually more likely and easier to change over time, as long as we’re willing to invest the time and again, back to one of the initial points here. Most investors not even close to being willing to invest that time. And even if they were willing to invest that time, they wouldn’t know how to navigate that conversation and to make those deposits in the relationship capital account and to solve the person because it’s just not what they have been trained on. So I love the unreasonable seller, because it’s just a surface level, unreasonable ality, in most cases, it’s not that they are necessarily as unreasonable as they seem, it’s just that they project that and everybody else wants to just walk away, if they don’t smell immediate blood in the water and immediate opportunity. But we’re not like that, we’re willing to have that conversation because we see a bigger picture.
So here’s the takeaway that I want you to leave this episode with. Next time you get a lead, who, right in the first conversation is saying things that kind of maybe raised some red flags for you. Maybe they’re mentioning a number, maybe they’re just projecting some expectation that you don’t agree with, or they think the market is really, really crazy, hot, strong, and you’re thinking maybe it’s not so much all the stuff that would lead you maybe normally, to be less excited, or to maybe even discontinue the conversation with this lead, step back. And just ask yourself this simple question. Are they seeming unreasonable to me because of the stuff that they are saying about their thoughts on their property? Or are they seeming unreasonable to me because of the way that it seems like they will be willing or not willing to engage me? If the answer is simply that I don’t like what they seem to think their property is worth? Then I would encourage you strongly to continue to have that conversation because that can change. But if they see right off the bat, like that kind of person who’s not going to be willing to have a real conversation with you, to be open to let you ask questions to answer those questions, honestly, transparently, who won’t let you meet up with them face to face, and ideally even sit down in their living room. That is the person I would encourage you to consider as a truly unreasonable person and not be distracted by the signs of unreliability that the rest of the real estate investing industry seems to buy into.
That is it for today’s episode of Racking Up Rentals. Again, show notes for today’s episode are at www.thoughtfulre.com/e195. Please do us a big favor by hitting that subscribe button would be so appreciated. And if you would rate and review this show just real quickly, doesn’t have to be long or eloquent. Just a rating there and a couple words would be super, super helpful and very appreciated.
Did you know that we have a Facebook group for Thoughtful Real Estate Entrepreneurs too? We do and you should be a part of it. It’s called Rental Portfolio Wealth Builders and we would love to have you join us there. Just go to group.thoughtfulre.com and you will be taken right to that page we can hit the Join button. If you liked this episode, please take a screenshot of that and post it to Instagram and tag us; we are @thoughtfulrealestate. I will see you in the next episode. Until then, this is Jeff from the Thoughtful Real Estate Entrepreneur signing off.
Thanks for listening to Racking Up Rentals where we build long term wealth by being win-win dealmakers. Remember: solve the person to unlock the deal and solve the financing to unlock the profits.