Seller marketing debate

[Doug Pretorius (ON) 9]

Ok folks, let's get to the bottom of this here and now!

 

We all already know the "magic" phrase that draws buyers like flies and makes marketing your typical house a quick and inexpensive proposition, namely: RENT TO OWN

 

Even though the majority of respondees couldn't afford a mud hut much less a house. We still get an avalanche of buyers and in amongst the debris we sort and sift our way to a few real gems. The other thing about Rent to Own is that you might put out $10 worth of signs and get 50 buyer leads. At 20 cents a lead it's pretty easy not to care if you have to throw 49 of them away.

 

So... what's the "RENT TO OWN" equivilent for Sellers? Is there a message that brings sellers rolling in at 20 cents a lead?

[megabucks41 0]

Ok folks, let's get to the bottom of this here and now!

 

We all already know the "magic" phrase that draws buyers like flies and makes marketing your typical house a quick and inexpensive proposition, namely: RENT TO OWN

 

Even though the majority of respondees couldn't afford a mud hut much less a house. We still get an avalanche of buyers and in amongst the debris we sort and sift our way to a few real gems. The other thing about Rent to Own is that you might put out $10 worth of signs and get 50 buyer leads. At 20 cents a lead it's pretty easy not to care if you have to throw 49 of them away.

 

So... what's the "RENT TO OWN" equivilent for Sellers? Is there a message that brings sellers rolling in at 20 cents a lead?

pay no agent commission, no calls to handle, no advertising to print, no property to show, etc.

[Jason (AL) 1]

You're dealing with a different beast when it comes to marketing for sellers.

Either they need to sell or they don't.

No matter what you say, market, or send them -- postcard, letter, cateloupe, etc. with your

message stating that you'll save them from this, you'll buy their house ALL CASH, no cost to them,

no commissions....all these things do not matter if they're not in the mood or position to sell.

 

A fella just purchased his dream house on the lake, makes a good living, and is current with his

payments.

No matter how creative you are with your marketing, he's not selling.

Period.

 

Now, that mother with 2 children whose husband just got locked up...she's making minimum wage (it took both of their incomes to make the payments), and she's "barely ahead of the 8-ball" who'd be happy to "downsize" to an apartment.

Do you think you'll have to get super creative to get her to sell her house to you?

Nah.

This case, all she needs is your phone #.

I bet she'd even call you if you sent a white sheet of paper with

WE BUY HOUSES & your # in black font....handwritten even.

Did ya have any "frill" words, creative catch phrases, and long, drawn-out paragraphs citing how

you could help her?

No sir.

 

So, I think the lesson here is market to those NEEDING to sell, rather than finding those "right words" to spread about, trying to convince those that don't really have any uses for creative solutions.

 

Leave a 5 day-old steak out and the flies are bound to come.

 

Later man.

[Doug Pretorius (ON) 9]

Jason, I don't think it's all that different. There are hundreds or thousands (if not tens of thousands) of people who read your "RENT TO OWN" sign and have no need or desire to buy a house, so they don't call.

 

So let's start off with the assumption that we're trying to get people who WANT to sell to call us. We're not concerned about the guy that just bought his dream home.

 

I agree that "WE BUY HOUSES" will bring calls. But there's one catch... when you advertise "RENT TO OWN" the callers are predisposed to buy creatively. "WE BUY HOUSES" wouldn't seem to predispose callers to sell creatively.

 

Nevertheless, let's chalk up WE BUY HOUSES as one possibility.

[bbrunelleb 0]

I've been getting response from "Try Before You Buy"

[Jason (AL) 1]

I see what you're saying, Doug.

 

So you're lookin' for that catch phrase that'll motivate one to sell, eventhough it's

yet to cross their mind?

 

Ok, "We Buy Houses" is 1.

 

I'm all ears as to what others might say.

[Doug Pretorius (ON) 9]

Here's one that I've had about the same response as usual "We Buy Houses", but the houses tend to have been on the market for longer, which MAY increase motivation:

 

House Still NOT Sold?

[kyoung 0]

So... what's the "RENT TO OWN" equivilent for Sellers?

If I had to pick, I would say that FULL PRICE does the trick nicely but I have to agree with Jason...

 

So, I think the lesson here is market to those NEEDING to sell, rather than finding those "right words" to spread about, trying to convince those that don't really have any uses for creative solutions.

You gotta have a pretty good salesmanesque quality to pull off a marketing campaign that is aimed at people wanting full price for their home. Afterall, the only way you could do it and make money would be to buy on some stallar terms. That takes salemanship of the highest order.

 

Truly motivated sellers on the other hand will practically give you their house just to be rid of it. The hardest task for you at that point is to restrain your greed and treat them fairly. That takes salesmanship too, but pinned to a decent conscience is much easier than our first scenario.

[Jason (AL) 1]

Yep.

 

Like I said...

 

Find those that NEED your services and your problem (finding sellers & deals) is solved.

[Doug Pretorius (ON) 9]

Let me go into a little more detail on the numbers...

 

Here in my market, for each 18x24 coroplast sign I put up that reads: "RENT TO OWN 3 BEDROOM" I can expect an average of 10 calls. Considering these signs cost me about $2, that's 20 cents per lead.

 

Compare that to what I pay for seller leads through postcards: $5.50 per lead

 

I think there's got to be a way to get that down a lot closer to what buyer leads cost. So that's what I'm hoping this thread will uncover.

 

Ok, so far we have these possibilities:

 

1. We Buy Houses

2. No commission, no calls, no marketing

3. House Still Not Sold?

4. Full Price

[kyoung 0]

I think there's got to be a way to get that down a lot closer to what buyer leads cost.

Not necessarily.

 

Imagine Ford/Lincoln/Mercury executives asking, "How do we get the cost of attracting Town Car buyers down closer to what we pay to attract the Escort buyers?"

 

It isn't going to happen. Town Car buyers have options... that is why it costs more to get their attention and keep their focus on what you have to offer. Escort buyers on the other hand typically don't have as many options and are easier to attract in mass numbers. Hence the lower cost per lead.

 

Again, Town Car buyers have options... If you want to sell them an Escort, you wait until the stock market crashes leaving them just over broke and THEN you sell them on the idea of an Escort.

 

There is a reason you get a larger response from buyers. You have something that the majority of buyers NEED. That is not the case with the majority of sellers. Hence the lower response rate and higher cost per lead.

 

The moment you have something that a majority of sellers NEED (read motivation), your phone will be ringing off the hook.

 

If all you want is a lower cost per lead then only promote to people that are likely to need you. Now keep in mind that the number of sellers that need you is a lot smaller than the number of buyers that need you so your cost per lead will be low in both cases but the number of seller leads will naturally be lower.

 

If you are simply wanting your phone to ring 250 times for $50 then you have to ask yourself, "Is a lead still a lead if it is worthless?"

 

Food for thought.

 

BTW, if you answered, "YES" to that last question then send me the $50 bucks and I will call you 250 times myself.

[Dan (SoCAl) 0]

It's easier to put ourselves in the path of T/Bs because they do very predictible things when looking for a house: Call classifieds, drive through neighborhoods, Google "rent to own."

 

But no matter how successful I become as an investor, I am not going to compete with the millions spent on media by real estate firms. Which means when someone wants to sell their house, they know how to call the local realtor, or 10, or stick a FSBO sign in the yard. At that point they are fielding more calls than they can handle from realtors and/or investors. Good luck on being one of the "me too" crowd.

 

My lease-purchase strategy is to get to sellers before they (or anyone else) know they're sellers. That means calling the FRBOs. Some of these guys are not landlords by choice and it's a real relief when they get my call. And I have no competition whatsoever. At the beginning of the process we all lament that sellers can't find us when they need us. Well, rest assured that they ALSO can't find our competition when we are negotiating the deal, either.

 

Finding motivated sellers this way takes some elbow grease, no doubt about it, but when you find them, they're all yours.

 

Dan

[Jason (AL) 1]

What does it matter that you're spending $5.50 per lead?

If you wanna split hairs, it's possible that it is what it is.

 

Seems as if you're missing out on the dollars (marketing to MOTIVATED sellers) to save

a few pennies to market "shot gun style".

 

Personally, I don't really track marketing costs per lead.

I just market (with a focus) and sign up deals.

It all works out in the end.

[Doug Pretorius (ON) 9]

Personally, I don't really track marketing costs per lead.

I just market (with a focus) and sign up deals.

It all works out in the end.

Must be nice! No such cavalier attitude will fly around here, if I'm not extremely precise in my budgeting and targeting I can very easily spend more to find a deal than I'll make on it.

 

Dan, thanks for the advise but I've yet to meet an FRBO who isn't a professional landlord with no intention of selling. Your market is quite different as attested to by your and Bev's success with "accidental" landlords.

[Jason (AL) 1]

Must be nice! No such cavalier attitude will fly around here, if I'm not extremely precise in my budgeting and targeting I can very easily spend more to find a deal than I'll make on it.

 

Man, you must be blowin' some major cash or making very little on deals if your marketing

budget is greater than your profits.

 

Me thinks your cost per lead will DECREASE if you market to motivated sellers, and not by trying to find something else creative to say to the masses.

If you're going to get creative with anything, do so in who you market to.

Like I've been saying, even if you come up with the best of slogans & phrases they

will fall on deaf ears given that you're dealing with (or trying to deal with) those that

don't want or don't need to sell.

 

Also, by comparing cost per buyer lead VS. cost per seller lead, you're naturally going

to have more people wanting to buy VS. those needing to sell.

So your #s (cost/lead) aren't expected to be on an equal level.