Follow Up – Part 1Posted on April 8, 2014 by
Last month we discussed presenting offers. This month, we’ll talk about the next step which is follow up; the fourth in our five steps to success. There are actually three times when you’re going to need to follow up so we’ll discuss each one.
The first is when you’re dealing with a prospect after you prescreen them, which means, that it’s a yes on the property information sheet yet we’re not ready to complete a deal today. This means this prospect should be followed up on because a lot of these will be converted to deals at a later date if you do the follow up, which I will confess, most won’t.
The second type of follow up you’re going to need is on the hot prospects where they say yes now and now you’ve got a few things you’ve got to get done to get it under contract.
The third type of follow up is the follow up after you get them under contract. Follow up is such a neglected portion of the steps that are required to make money in any business. If you will master this, you’ll make a lot of money where a lot of folks won’t and you’ll find the deals that you do get will go better because you took care of the details along the way. A small detail left out can create a large problem, and has many times prior. Honestly, most people have no system whatsoever to do the follow up; they rely too much on memory and therefore issues come up that really could have easily been avoided.
Let’s talk about the first of our three types, which is a prospect that you’re not going to buy from today but is worthy of following up on later. Here’s a real simple system; get yourself a file box with files in it, 52 of them, one for each week of the year. Don’t put dates on them, just put ‘June Week 1’, ‘June Week2’, ‘June Week 3’ and so forth so they never go out of date. So here you are with a file box with 52 files in it and the month and the week of the month, so now it’s simple when you’re discussing a property with a prospect today and you can’t get it to a conclusion because they’re not ready yet, you just decide in your mind, ‘Alright, when do I want to follow up with them?
What did my conversation dictate how long that would be?’ and just stick that property information sheet in whatever applicable week that is. Now, when that week arrives you should have them sitting there waiting for you to call and you don’t have to remember anything. Yes, I know that’s an archaic system, but it still works. If you’d rather do one of your own electronically, go right ahead, but the key is do not waste these leads. Remember, all seller’s minds will change with time and circumstance so don’t take a prospect that’s not ready today and discard them because a lot of your deals will come from the follow up.
The next of the three types is when you are at a point when the seller says, “Yes, I’m ready”, so now you’ve got to go through the steps I’ve described in the prescreening section in last month’s article to get out to the house and get it under contract. If you didn’t read last month’s article go back and do it now because it literally will take you through all the steps of the follow up required to get to the contract.
The third type is the follow up after it gets under contract. When you leave the house, you should leave with a signed agreement. Of course, if you didn’t, now you have another follow up step and that’s to go back when you and the seller agree and get a signed agreement. Honestly, I don’t go back to the house, I make them bring the contracts to us, but I’m fully aware in your early years you’re so eager to get the deal you’re going to do whatever you have to do. Regardless of who’s going where or when you still have to follow up to the point to where you pick up that contract or all of the work you’ve done up to now is for naught.
Once you get that contract signed, the next step is to probably do a title search. If it’s a purchase agreement, I will always do a title search before I go any further because I’m going to buy it and I would not buy a house without doing a title search.
However, if it’s a lease option agreement requiring a tenant buyer before it’s actually a deal, then I very well may not do a title search until I get the tenant buyer located and committed and at that point we run a quick title search. In fact, that’s exactly what we do here around my office. Once we know we have a deal, we run a title search just to make sure we are not going to have any title problems and put the buyer in a bad position. Our next lesson will be on closing the deal and in this case that means we’ll get a contract signed so we are going to talk more about that then.
Of course, if you leave the house with a signed lease purchase agreement you have closed the purchase of it because there are no further steps required to continue, except do a title search as I just discussed. Once that agreement is signed by that seller you control that asset and your five steps to buy are complete.
You also want to be prepared in case the type of deal changes after you arrive at the house during your conversation. For example, you assume that when you get to the house it’ll be a lease option deal, but after you arrive and start having a conversation with the seller, you discover the seller would rather just deed the house away and sell it instead of lease optioning it to you. That means you will switch from the lease option agreement to take possession of the house, to a purchase and sale agreement that says you’re going to buy it and take over the debt subject-to. Ask yourself, “What kind of an agreement would I need regardless of what situation I get in to?” Again, think that through before you get there and be prepared for the possibilities. After a while, it’ll be second nature to you.
OK, that’s enough for this lesson. Next month, we’ll pick up where I left off and continue discussing the follow up.