Most investors jump on the phone with a new Seller lead and start asking questions that they need the answers to. Makes sense, right? But Thoughtful Real Estate Entrepreneurs don’t just ask questions they need the answers to, they also ask questions they ALREADY know the answers to! Why? Find out in this episode, where Jeff explains the two major reasons why it’s so incredibly valuable to ask the Seller questions you already know the answer to.
When you get a new off market seller lead, you get super excited and there is so much information you know, you need to gather from your new seller and you start finding yourself asking questions. But you know what? There’s kind of two categories of questions. This might sound funny, there’s questions you don’t know the answer to and there’s questions you do know the answer to. And you know what, there’s a tremendous amount of value in asking questions you already know the answer to. In today’s episode, I’m going to tell you exactly the two huge reasons why it’s hugely valuable to ask questions you already know the answer to. So let’s cue up the theme song we’re gonna dive right into it.
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 dealmakers, 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 for joining me for another episode of Racking Up Rentals. Show notes for this one can be found at www.thoughtfulre.com/e76. Please do us a big favor by hitting the subscribe button in the podcast app. It really helps fellow thoughtful real estate entrepreneurs to find us all right onward with today’s episode.
In today’s episode, I want to talk to you about why you should be asking questions you already know the answer to I mean; it almost sounds funny to even say it but there is so much value in asking these questions. And in today’s episode, I’m going to give you two big reasons why that is the case. You know, I’ve heard it said that. A good lawyer never asks a question that they don’t already know the answer to. And I feel like to some degree that kind of applies to us and what we are doing as we talk with the seller as well. So I want to just dive into these two nice, big important reasons why this is really a valuable thing to do. It’s not a waste of time at all, it’s a very valuable investment of your time in asking these questions.
So the first one is a concept that I have alluded to in previous episodes. And that is about the difference between information and insights. Information is data. It’s the details that you need to gather. That could be the square footage of a house or the age of a roof or whether the stove is gas or electric. But insight comes from not just the questions that you get answered, but the context of the answer that you get. So for instance, you ask a question, and you can’t help but detect a little bit when the seller answers. Did they answer that question? directly? Did they? Did they pretend not to know the answer to that question? Maybe? Were they being evasive at all? Were they being very proud in the answer that they gave you? How did they answer not just what did they answer, but how did they answer because the bottom line of information versus insights is that you can actually learn as much if not more, from how they answer the question, then just from the answer that they actually gave you?
As you know, from the Y.E.S.S.E.S Framework, we have to solve the person before we can solve the deal. And getting these insights is a really important part of solving the person. Overall, one of the things that we need to really understand about our seller is what do they think they have? In other words, what is their perspective on their own property? Understanding that is super, super important to us. So let me just give you a couple of super basic, simple silly examples of questions you might ask that you already know the answer to.
So one question might be “So Ms. Seller, how many bedrooms are in this house?” And you already know the answers to; but if the seller says, “Yep, there’s two bedrooms.” That’s very different than if she says, “Well, there’s two bedrooms, but there’s also this bonus room over there, which other people have used as a bedroom.” So it’s really more like a three bedroom. Now how are those two answers different? Well, in the first one she’s just saying, “Yeah, that’s exactly what’s going on here. There’s two bedrooms.” But in the second example, she’s almost apologizing for the fact that there’s only two bedrooms and trying to sort of inflate the perspective of the property or your perception of the property by sort of saying, “Oh well, there’s this other room too.” It’s like, she’s a little bit self-conscious of the fact that it only has two bedrooms. Okay, that’s interesting. Now, two bedrooms is a data point, but her feeling self-conscious about there only being two bedrooms. Now, that is an interesting insight. And that’s very different.
Here’s a second example. You want to, you want to ask them about the existing debt. Now, you already know, this property is paid off. So perhaps you say, “So Mr. Seller, gosh, you own this place for a while I bet you’ve got this thing just about paid off by now.” So if the seller says, “Heck yeah, I had a paid off, like within five years of buying it.” That tells you something different than if he says, “Yeah, it’s paid off now.” Now, in the first case, the former, his attitude tells you that he is proud of having a paid off the he sees himself as the kind of person who pays off a property quickly. He’s positioning his own capabilities and his own, he’s posturing around his own financial strength. By the way, he answered that question. So you get a lot out of the tone of his answer.
Now, here, let me give you a third example. Something that’s really, really helpful to know about your seller is if they own other properties, right? I mean, if you’re talking to somebody who owns 40 properties, versus somebody who, you know, this is their only rental property, because they lived in this house themselves, and then they moved out five years ago. That’s two very different sellers. Now you come into this situation, knowing if they own other properties, at least having some insight into that. But you might want to ask, too, so maybe you say, “So, Mrs. Seller? Do you have other rental properties, too? Or is this your only one?” Now, if she says, “Oh, yeah, I’ve got a couple.” That’s different than if she says, “Yes, as a matter of fact, I’m a professional real estate investor. And I’ve got 13 properties.” Now, in the first case, if you know the answer is, she has 13 properties. In the first case, she is consciously trying to downplay how many properties she has, she’s trying to control your perception of her. And you if you already know the answer, she has 13 properties. Now you’re getting something new, out of her answer, because not only are you confirming a data point, but you’re seeing how she feels about the answer that she just gave you. Was she kind of self-conscious about it? Did she not really want you to know, maybe she really wanted you to know, whatever it is. Sometimes you find that people kind of apologize almost for their answer. They’ll say yes, but blah, blah, blah, you see that they’re insecure about certain things. But when you come into your seller meeting, having already done your research, and you know, you don’t let on how much you already know about the situation. But when you come into the situation in this conversation, knowing as much as you do, not only do you want to gather or verify information, you want to get insights from the seller that you can only get by asking them the answers to the questions that you already know the answers to.
So let’s talk about the second big reason that it can be super-duper valuable to ask questions you already know the answer to. And I would call this the fact that once they’ve brought it up, and they’ve said it, now you can refer to it. So in my free time, all that vast free time that I have, I like to read mystery books, and sometimes a mystery book is set in like a courtroom type of setting I really like to read Michael Connelly is a great author and some of his books are set in a courtroom. Well, one of the things I noticed from the attorneys in these courtrooms stories are that they’re always trying to unpack the evidence in the case in a certain way on a certain timeline in a certain order. And they are wanting to make sure that certain things get said officially on the record at certain times by certain people so that they can come back and refer to them right. So they already know that XYZ has happened. But if they can get the witness on the stand to now bring it up. Now it’s a part of the official record. Well, we kind of have a bit of an official record going here with our seller as well. So we walk into our seller meeting, always way more prepared than anybody knows, like we’re not letting on just how prepared that we are but we come in very prepared. And they don’t necessarily know that now. If you walk into a seller meeting and you say “Oh, so I see you own 13 properties”, the seller is gonna go “Whoa, that’s creepy. How do you know that?” That’s what do you because some kind of a stalker, but when you come in and you know this information.
Now if you ask the question like “So, gosh, do you have other properties as well as it’s your only one?” And then seller says “Yeah, actually I’ve got 13 properties.” Now that’s on the official record of this conversation. That’s in the official transcript of this, of this relationship of this dialogue, this conversation that you’re having. So now, you can point to that piece of evidence if you want to. So later in the conversation, you could say something like, Well, you know, as an owner of 13 properties, I know that you absolutely know what you’re doing. And that means that you know that when you buy a property, you have to, you know, you have to account for things like vacancy and maintenance. So that’s what I’m doing as well. But if the seller had not said to you, I own 13 properties, you can’t really make reference to that, without it being very weird and maybe being perceived as a little bit creepy. But that bit of information has now been stated by them on the record. And now you can point to it. So if there are certain things in your negotiation that you want to be able to reference, it’s very important that you ask the seller questions that will elicit the response you need, which is simply them saying out loud, the things that you want them to acknowledge.
So again, another very valuable reason why we ask questions we already know the answer to we’re not asking because we don’t know the answer. We’re asking because we just want them to say it out loud. Because now that they’ve said it out loud, it’s public, it’s an accepted part of this conversation.
So here’s the bottom line, my friends, I mean, we need to be asking tons of questions all the time of our sellers. I mean, you know, our ratio of talking to listening should be like one to 10, we should be doing way more listening than talking. So we ask good questions. And we close our mouths, and we open our ears, and we listen to their response. But we can ask, even if we already know the answer, and listen to those questions. And not only do we hear the data that comes back in their response, like, yeah, it’s 12 146 square feet. We’re not just looking for the data. We’re looking for the insight. Yeah, it’s 12 146 square feet, but it really feels bigger than that. That is an insight that is a seller telling you that you know that she is uncomfortable with the size of her house. She thinks maybe it’s too small for the neighborhood. And just that little tell that she gave you in the tone of her answer to a question you already knew the answer to is giving you lots of powerful insight in your negotiation. And that is a powerful tool you can use to solve the person.
So that is it for today’s episode of Racking Up Rentals. Again, show notes are at www.thoughtfulre.com/e76. Please do us a big favor by hitting that subscribe button in your podcast app and please rate and review the show I would be so appreciative of that.
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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.