One of the most necessary, yet confusing, parts to investing in real estate is learning how to close a deal. Ever since I made my first deal nearly four years ago, I have been following the same process to secure properties, connect with buyers, and close deals. And, now I want to share it with you.
The process truly is quite simple, but even simple takes work. But I know, if you are willing to do the work than you will also reap the rewards!
How to Close a Deal in 10 Simple Steps
#1 Talk (and tell everyone)
The first MOST important thing to do when you are starting out is to talk to anyone and everyone about what you want to do. I BUY HOUSES. Say it loud; say it proud. Wherever you go, you need to let people know that you are looking for properties to buy. Don’t hide it!
#2 Ask for leads
Now that you’re telling everyone about what you are doing, ask for any leads they may have. Again, be direct about what you need. While you’re talking to people say, “do you know somebody that wants to get rid of a house?” That’s it. Just let the leads start rolling. You’ve planted a seed. For more on this topic check out Three Proven Secrets to Easily Find a Property to Make You Money.
You’ve probably heard the adage “the fortune is in the follow-up.” Well, it’s true! Y’all, if people are giving you names and numbers and addresses, follow up! Go and call or talk to these sellers and talk to them about what they are looking to do. It’s easy to ask for the lead, but it’s a whole other step of business to actually go and talk to the lead. But, if you’re a serious investor, you HAVE to do it. Follow-up!
#4 Make an offer
Now that you have talked to the seller, make an offer. Get the talking table turning. Just start; even if it’s a low offer. Begin the process of negotiating with your seller and finding out what kind of options they need and can work with. For more on this check out my post The Three Most Effective Negotiating Techniques for New Investors.
#5 Sign the paperwork
Ok, this is the big one. You’ve made an offer and agree on some terms. Sign the paperwork. No, this is not the official big close, but it is the initial paperwork of commitment and intention to follow through from you, the buyer, and the terms that your seller has agree to. There are always out-clauses with contracts, so don’t freak out. But, still, sign the paperwork.
#6 Start advertising
Now that you have a property that you are buying, it is time advertise! Take a picture of the house – front, back, inside- and post the picture on Facebook, Craigslist, Zillow, and maybe around town at your local grocery store or hair salon. Be a person. “Hey, I’ve got this deal….” Get the ball rolling. Getting the property is only part of the solution, because if no one knows that it is available, then it’ll go nowhere fast.
#7 Find buyers
You’ve already begun this process with step 6, so now the people will start to respond. Begin the conversation. Sometimes responses will offer new terms, or ask for a new negotiated amount. Take in the offers and requests, consider the most reasonable and practical. And, work the deal.
After settling the agreement with your buyer, go back and re-negotiate terms with your seller (you may be able to give better terms with your seller). After you talk with your buyer, you may find that you are able to give more money up front, etc.. But, if the seller won’t re-negotiate, go back to your buyer and re-negotiate with them. Talk and talk until you get it all situated and everyone in agreement on solid terms.
#9 Show me the money, honey
Now that you have a solid agreement, it’s time to collect the money from the buyer. Think of it like this, in a typical real estate transaction there is a downpayment of an earnest deposit. This is good faith money. There is also a pre-approval letter and other forms of proof to show that, yes, this buyer is good for their offer. In lease options, my favorite type of real estate transactions, this is the earnest money equivalent. The money goes into an escrow account of your own or your lawyer’s and solidifies the deal.
#10 Close the deal
Finally, it is time to close the deal. You worked out all of the negotiation kinks. Then, you talked with both your seller and your buyer to make sure that everyone is happy with their terms. And, you even got the money from your buyer to seal the deal. Now, it’s time to hand everything over to the attorney to write up the official contract paperwork for the agreement (negotiations and re-negotiation paperwork, deposit/fee, and any other important information, which the lawyer will turn into a official set of closing documents).
You Did It!
Great job! You’ve done it. After taking these ten steps, you have officially closed a deal! But, I know you probably don’t feel like this is quite enough information to really, truly do this work. I know. Sometimes it just feels SO much better to be hand-walked through every step of the way. Well, how about we do just that?
This is why I developed my premier course, to provide you even more detailed information so that you can feel completely confident as you work to close a deal. First Deal Done Fast is absolutely chock full of a step-by-step, total breakdown of every piece of the investing puzzle. And, you even get direct connection with me
The course is entirely self-paced, so you can move as quickly or relaxed as you need to, or want to. And, bonus, you can get connected with our amazing group of fellow investors! There is nothing better than connecting with motivated people who are doing what you want to do. The momentum is so contagious. Join us and get started today!
Know the Steps. Work the Steps.
You got this. It may feel a little intimidating and daunting, but you’ve got this. Remember, these are just people talking to people about normal life issues. Be a person and work the problem to find a solution for their problem. You’re here to help. Never forget this simple truth, and you will go far in this business. Welcome! I’m so glad you’re here.
What is one step that scares the living bejeebus out of you? Share the fear that’s holding you back in the comments below.