Understand Your Seller, SMS, And 3 Rate Cuts In 2024

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Welcome To The Business Of Wholesaling Newsletter!

Every week, we’ll be sending you strategies, tactics, and tools used by successful wholesalers and we’ll cover any important market insights and news in the industry.

Here’s what we got for you today:

• Close More Sales By Understanding Your Seller

• Is SMS The Best Acquisition Channel?

• 3 Rate Cuts In 2024?!

Today’s Sales Objection

“What do you say when a seller asks if you are a wholesaler?”

Reply with your answers! The best answer will be featured in next week’s issue. 

Close More Sales By Understanding Your Seller

There are two schools of thought in the world of sales.

There’s the product school and the customer school. Top salesmen from the product school say that as long as they know the product better than anyone else, they can sell it to anyone. The cliche of selling ice to Eskimos. 

Top salesmen from the customer school say that as long as they know the customer like their best friend, they can sell them anything. 

Both schools of thought have their success stories. However, we’ve found that the majority of wholesalers come from a product perspective. 

Sometimes this leads to predatory, unethical behaviors all because the wholesaler is desperate for an assignment fee and is willing to do or say anything to get a property under contract. 

Telling an innocent grandma that her number is correct - all so you can get a contract is gross. 

But it would do you some good to understand why that number is that high to begin with. 

Most of these sellers have never sold a home before. What feels “right” to them might not match the reality of the market. 

And that value isn’t tied to market values, it’s tied to the emotional value of the home. We’re humans, non-irrational, emotional creatures.

A home is the largest purchase most people have in their lives and there’s a lot of memories locked into it.

So if you understand the seller from that point of view, it’ll be easier to build rapport and get a deal done. 

Of course, there will always be sellers who are stubborn about their numbers. But you also don’t need to deal with them.

With that being said, one of the best things you could do is provide value back to the seller. 

One of the ways is through education. Giving the seller the information they need so they can come to their own conclusion instead of pressuring them until submission. 

Is SMS The Best Acquisition Channel?

Texting has been around since our high school days. Yet, it’s only recently that SMS has been popularized in the real estate industry. 

Not surprised, this industry still operates from an old-school mentality with door knocking and cold calling. 

But when done right, SMS can be more profitable than cold-calling. 

To piggyback off the previous section, let’s understand the mind of a seller. If someone is prompted to answer a random text message about their property, it says a couple things about them.

1. They’re much more motivated. And may want to move fast.

2. They’re more likely to be in the “need to sell” category rather than “want to sell”

“Want to sell” homeowners are usually where you’ll find the majority of tire kickers. But someone who needs to sell is usually in a distressed situation and wants to move on with their life. With a little cash in their pocket of course. 

One SMS strategy we’ve seen a successful wholesaler use is to be very vague in their initial message. Something along the lines of:

“Hey is this ____?”

So why is this effective? One reason is that this homeowner probably received 10+ other texts inquiring about the property itself.

“Are you the owner of the house on _______?”

This may make the homeowner feel like you don’t care about them, you just see them as easy cash. 

Whereas a more broad and vague approach is more likely to lead to conversation instead of a blocked number. 

It’s the psychology of micro-commitments. A concept Robert Cialdini talks about in his book Influence. 

There’s a reason the late, great investing legend Charlie Munger recommends everyone reads this book.

People like to be consistent. So engaging in a conversation with you increases the likelihood they’ll keep talking to you.

Which means the deal is still alive. Not dead in the water with a blocked number.

Of course, people still fall off the face of the Earth and go ghost. But that’s why follow-up strategies are essential. 

Someone who answers a broad message may not be as qualified as someone who answers a text about their property. 

But you may find that you get more responses from a broader message. Which gives you more opportunities to work your sales magic. 

3 Rate Cuts In 2024?!

The Federal Reserve announced it will leave interest rates unchanged this month.

Have we finally seen the peak? 2023 was the least affordable home-buying year for consumers in the last 11 years according to a report from Redfin. 

The Fed has raised rates 11 times since March 2022, the fastest pace since the 80’s. 

According to predictions from officials, we might see up to 3 cuts in 2024 with interest rates bottoming out at 4.6%. This is a lower number than the Fed’s target rate of 5.25 to 5.5%. 

So what does this mean for wholesalers?

Luckily for us wholesalers, we’re typically the least affected by hikes in interest rates. Simply because people will always be buying and selling homes.

There may be less action because of interest rates such as in this market. Right now we’re seeing an average 30-year, fixed-rate mortgage currently at 7.23% (down from 8% in October). 

But there’s always opportunity. You might need to get properties under contract for lower prices or the buy box of your buyers may change. 

But as long as you’re turning a profit, you’re still in business.

Now what happens if rates drop to 4-5%? Big if because we have no idea what they’re gonna do.

But let’s say rates do fall into that range. There should be more inventory in the market with more purchasing power for consumers. It also depends on what market you’re in.

Generally speaking, there should be more action. And you know what they say, a rising tide lifts all ships.

This means if you’re doing well right now, you should be able to scale up in 2024.

It all depends on your systems and processes. And if you’re struggling to do deals right now, your focus may be better spent on optimizing those systems and processes.

That way, you can take advantage of what’s to come. 

Looking For Motivated Seller Leads?

We partnered with Leadzolo to give you access to some of the highest converting off-market seller leads nationwide.

Imagine cutting down your time driving for dollars, sending direct mail, scraping county & government lists, skip-tracing, cold-calling, door-knocking, sending carrier pigeons, etc.

Instead, have motivated seller leads delivered straight to your account, ready to dial.

There are multiple wholesaling content creators who dial Leadzolo leads live! One creator even closed a six-figure deal live from stage at his event!

So if you’re interested in tapping into this lead source to grow your wholesaling business, click the button below to book a call with the Leadzolo team.

Thanks for reading this week’s issue of the Business of Wholesaling. 

We’ll be back next week with more marketing & sales strategies, market insights, and other advice you can use to grow your wholesaling business. 

See you next week.

Team Business of Wholesaling