When you’re working hard to build a relationship with your Seller—which is exactly what we do as Thoughtful Real Estate Entrepreneurs, there’s one very important thing you need to identify and understand about your Seller: what is their “currency”?
A Seller’s currency is what they value the most, and what they need to be “paid in” if you want to succeed in building a relationship with them. In this episode, Jeff explains the concept of the Seller’s currency, gives examples of different types of Seller currencies, and explains how you can “pay” the Seller in their own currency.
As I like to say, you have to put the relationship in contract before you can put the property in contract. But how do you put the relationship in contract? Well, I’ll tell you what, you have to pay the seller. Wait a minute — what? You have to pay the seller to put the relationship in contract? Yes, you have to pay the seller to put the relationship in contract, but you don’t pay them with money. What do you pay them with? You pay them with the sellers own currency. In this episode, we’re going to talk about understanding what the sellers currency is and how absolutely important it is to understand it and what to do, once you know what your seller’s currency is. Let’s cue up the theme song. We’ll dive right into this topic.
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 a 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. This is episode number 77. So that means show notes are going to be at www.thoughtfulre.com/e77. Please do us a big favor by hitting the subscribe button on your podcast app. It would really, really help other fellow thoughtful real estate entrepreneurs who are looking for a community of voice and content like this, to find the show. All right onward with today’s episode.
And in today’s episode, as I mentioned in the intro, we’re going to talk about the seller’s currency. And the big question is, what is your seller’s currency? Every seller has a currency and every seller has a different currency. It’s unique to them. And it is not always money. Now let’s stop for a second, and let’s clarify. I’m not suggesting that you are going to offer to buy their property with anything other than money. What we’re talking about first is putting the relationship in contract. And in order to put the relationship in contract, we have to give the seller what they value. And that thing is what we call their currency. And so just before we dive into, I mean the practical application of this for you, here’s why you need to know this: you will be able to do more deals if you were able to solve the person more, right? You’ve heard us talk about solving the person. We have a whole episode about solving the person. You’ll be able to do more deals if you can solve more people. And if you want to solve more people, then you need to understand the concept of the sellers currency.
So what is currency? What do we even mean when we talk about that? A seller’s currency, a person’s currency, is what they value that makes them feel like they are developing a relationship. What is valuable to them? What is you know their self-image? How they see themselves how they perceive themselves? And what do they value in relation to that? What is it that matters to them in their life in their worldview? As a relates to this property, perhaps as a relates to developing relationships with people that they feel comfortable doing business with? How do they navigate their options and their decisions and select the choices and make decisions in their own world?
Like a currency just like it would be if we’re talking about dollars or yen or Australian dollars or Canadian dollars or pesos or euros or anything else? A currency is a medium of exchange. What is it that your seller wants to receive in order to continue developing this relationship with you? I’m going to give you some examples of different types of currencies in just a second. But I want to point out the connection between the seller’s currency and what we often call there one big thing you know when we talk about solving the person, we talk about understanding our audience understanding our seller. We talk about a concept called the one big thing. And the one big thing is, of all, the considerations that this seller has, as it relates to selling their property potentially, or at least considering selling their property. There’re multiple things they’re thinking about. But there’s always one that is the most important thing that stands out above the others. It’s the one thing that is the deal breaker; it’s the one thing that if that need or that concern, or that desire doesn’t get met, the deal is not going to happen.
So how does the seller’s currency relate to their one big thing, they might not be exactly the same thing. But they often are very, very closely related because the seller is thinking about their currency, not in a very conscious way, of course. But your job is to observe the seller; to ask good questions, listen and perceive what the seller’s currency is, the one big thing might be something a little bit more literal, as you ask questions about how they’re, you know, considering their options and what matters to them. This is often a more literal answer. But the sellers currency is going to be oftentimes related to that one big thing, but is going to be a little bit more esoteric, probably a little bit more based on your subjective perception. Okay, so at the risk of this, sounding really, too, conceptual and theoretical. Let’s jump into some actual examples of different types of currencies that you might experience and find with the sellers that you are talking to one currency might be what you would call like the acknowledgement of their status.
Some sellers, when you talk to them, you realize that they have a fairly, let’s just say, healthy self-image, they have a healthy ego, and they have self-confidence. And they feel good about themselves; they might think that they are geniuses for owning this particular property; they might see themselves as being very successful in the real estate ownership business. And pretty soon, it becomes easy for you to see that their currency is kind of like respect — they want you to show them respect, and to acknowledge their status, and their standing as it relates to this property. Sometimes this can be related to them wanting to kind of assert their power, and show you that they are not desperate, and they’re not here to be pushed around, and they know what they’re doing. So in this case, the seller’s currency, is respect, really, it’s acknowledgement. So once you tune into that, you might find yourself paying the seller in their currency by saying things along the lines of Gosh, someday, my goal is to have built a portfolio as amazing and accomplished as yours. Or you might be saying, I can’t imagine having the opportunity to work under somebody like you who’s got so much experience. You might be saying things like that, that are paying them in their currency of wanting to hear signs of respect, because once you do that, then they feel like they’re getting, you know, their itch is getting scratched.
Here’s a different example. I would call this their comfort with the next owner or the relationship with the next owner. So I have definitely met people whose primary concern is making sure that they feel good about who’s buying their property, right? If they raise their family in this property, or they’ve been a part of this neighborhood for a very long time, or they are fans of a certain type of architecture or a certain era of home. It’s very important to a lot of those people to feel very comfortable with who’s buying their property, because there are certain things they do not want to see happen. Like they don’t want to see the house get torn down. They don’t want to see the property be redeveloped in a way that they don’t believe in. They don’t want to see somebody come in and do a bunch of what they would consider no taste remodeling decisions. And that is what matters to them. I’ve got a seller myself right now and in I’ve been talking to him for a long time. It’s just really recently I’ve really started to understand that it’s extremely important to him, that the person who buys his property continues to care for it and love it and manage it because it’s a very unique property with a lot of charm and character. So these people want to feel comfortable with the relationship they have with the next owner and then to make sure that this, the next owner’s sensibilities, are aligned with them and with theirs. So with these people who are comfortable, we’re seeking that level of comfort with you as the next owner.
You might be finding yourself paying that seller in their currency by saying things along the lines of, I just absolutely love and respect how you have maintained this property. And I’m so honored to become, you know, the steward of this property moving forward, I can’t wait for you to hand the baton to me so that I can continue caring for this property the same way you have. When you say things like that, you are understanding the seller’s currency, you were paying them in their currency. Very similarly, you know what happens to the property. That’s kind of what I mentioned with some of these people. They want to make sure that whatever happens in the next chapter of the property is conducive with their value set and their vision. Some of them really are have a currency of maybe, you might say, security, or assuredness. So when you start talking to a seller, you find out that the most important thing to them is making sure that you are going to follow through basically; that you are somebody who is safe; that you are going to do what you said, you’re not going to get two days before closing and back out.
And so this seller is giving you these signs, and you might find yourself responding to this seller paying them in the currency of security and solidity and assuredness by saying things like You know, Miss Seller, I would be honored to, you know, share the names and phone numbers with other people who I’ve bought properties from just so you can get a sense for what that experience is like. Or you might say something like, I want to make sure that you can reach me at any point throughout our whole transaction. So make sure you have my cell phone number and every possible way to get ahold of me because I know that this is a very important thing to both of us. So you might find yourself paying your seller in their currency of security and solidity and trustworthiness and high follow through and all those things by saying those words that are going to resonate with them.
Another type of currency would be the currency of fairness. Sometimes a seller really wants to feel like the deal is really fair, not just meaning that they’re getting all of what they deserve. I mean, that they feel like it’s fair all the way around. I bought a property from a seller once whom, in my very first conversation with him, he said, Well, you know, the tax record showed this property’s worth a million dollars. But I just think that’s crazy. I can’t imagine that it’s worth that much. Here he was talking, he was convincing me that his property was not worth as much as the tax records showed. And he didn’t feel like it would be fair for somebody to spend a million dollars on this property, when he could not understand it, it could possibly be worth that. And so that’s a currency that can be very, very important. So in when you’re paying your seller in that currency, you might really use the word fair, very literally, and very liberally, and you might just allude to that idea. You might say You know, Mr. Seller, I really appreciate the you want to make sure that this is a fair transaction for everybody and that everybody is treated equitably, and that everybody’s needs are met, and that at the end of the day, after we’re all done, everybody feels good about what they just completed. Those types of words and sentences and whatnot, well pay homage and pay the seller in their own currency, of fairness.
Now, of course, how could we have a conversation about currency without actually talking about money. And there are different examples of how a seller’s currency might be financially related. And there’s a couple unique nuances here, though, I want to point out to you, you might be easily, you know, led to think, well, the seller’s currency is money, they just want the most money that they can possibly get. But I would like to share with you at least two subsets of that that are more specific. So theoretically, if you think about money, nobody wants money. Money is paper and green ink. Nobody says, Hey, I want some paper and green ink. What they want is, of course, with the money, we’ll give them, they want the result of what they can do with the money. And that could be lots of things, right?
They might want the money because it’s going to allow them to buy a certain car. They want the money because it’s going to allow them to pay off some debt. That is going to give them a great sense of peace of mind. They might want the money because there’s something that they grew up with that makes them feel like when there’s a certain amount of money in the bank. The idea of living off the interest for instance, is something that was instilled in them as a kid. So the point is that nobody really wants money, what they want is what the money will give them. And if you want to speak to the sellers currency, you need to be speaking to not money. But speaking to the thing that they ultimately want, right?
So if, for example, your seller is, is expressing that that money is their currency, but what you really see is that they want the peace of mind of paying off a debt, like I’ve got a seller right now I’m working with and he wants to sell this property because he wants to get out from under the debt because he’s had bad traumatizing experiences with debt in the past. And he just he feels like now is the window of opportunity to wipe the slate clean of any debt associated with his property. So he doesn’t want money he wants what money will give him, which is the elimination of something he feels is super risky. So as I address him, and I pay him in his currency, I and I speak to him, you know, I’m saying things like, I want to, you know, I want to make sure that whatever deal we put together, gives you this sense of peace of mind from knowing that loan is paid off, right, I’m saying things like that I’m keeping him focused on what he ultimately wants, which is the peace of mind from having that debt eliminated from his life, taken off his record.
Another subset of money is often related to ego, it’s actually not about the money itself, it’s much more about their achievement of a certain outcome, like a certain price, for instance, right. So I bought a property from a seller one time, who couldn’t stand the idea that somebody in the same neighborhood with a similar property could sell there could sell their property for more than he did. And so it was really a matter of his own ego, wanting to make sure that he was at least at the top of the comps list himself, if not actually kind of being crowned the king of having gotten the highest price for a certain type of property. So in this case, it’s not the money that he wants, it is the record of being able to say I sold my property for the highest possible price. So as I’m paying him his currency, I’m saying things to him, that really, you know, pay that off? Well, that’s a funny choice of words. But that really scratched that itch for him, right. So I’m saying, Look, I know how important it is that you get this price, because let’s be honest, this is the beautiful, most beautiful property in the neighborhood, I understand that that’s what you want. And I keep him focused on this thing that is so important to him, which is not just a big stack of paper and green ink, but rather the symbolism of knowing that he was the guy who fetched the highest price in the neighborhood. So that’s what I am trying to satisfy to make him feel good about what we are talking about.
So there are lots and lots and lots of different currencies, I’ve just kind of given you a high-level group of sorts of categories of those currency. But the point is, what I want you to take away is that every seller has a currency. And then if you want to develop the relationship with them, if you want to put the relationship in contract, so that you truly have the opportunity to buy this property, if you want to solve this person, so you can figure out what proposal they will say yes to, you have to identify their currency. And then secondly, you need to be really deliberate about paying them in their currency, you need to make sure that they’re getting what they want out of this relationship, in order to feel good about it, so that they keep moving forward and doing business and closing a transaction with you.
So I encourage you to really think about how you can design your whole approach to interacting with this person with the seller, and giving them what it is that they value most, whether it’s some acknowledgement of their status, or it’s the end result of what an influx of money might give them or that sense of security of knowing they’re working with somebody trustworthy, or a sense of comfort in what’s going to happen with their property down the road, or whatever it is. But make sure you’re designing your approach around giving these people what they value. And when you do that, you will see that you’re what I call yes rate. The percentage of proposals that you put out there they get accepted goes up and up.
That’s it for today’s episode of Racking Up Rentals. Again, show notes for this episode are going to be at www.thoughtfulre.com/e77. Please do us a big favor by hitting that subscribe button in your podcast app. I would really personally appreciate that. Thank you so much for doing that. If you wouldn’t mind just take two seconds and rate and review the show as well. Doesn’t have to be long, eloquent, doesn’t have to Shakespeare, just a quick rating. A couple words of review, it would be so, so helpful.
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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 a win-win deal makers.
Remember, solve the person to unlock the deal and solve the financing to unlock the profits.