The Who-What-When-Where-Why & How of Lease Purchasing
By Claude Diamond
It’s a good idea to periodically review the basics of Lease Purchasing.
Who should do a Lease Purchase? Anyone who wants to do smart, profitable and non-adversarial real estate. There are many ways to do a deal, but few allow you to profit up front, limit liability, credit is not always an issue, small if any cash investment and no competition.
What is a Lease Purchase? Simply said, it’s a lease and a right to purchase (rather than an obligation). You have the same control as ownership without the liability. There is no violation of due on sale and there are great profits.
When do you do a Lease Purchase? There are many situations when optioning a property with a lease is so much easier and safer than buying a home or negotiating with alternative strategies. It’s great for the starting or seasoned investor. No more chasing tenants for timely rent payments, no more weekend maintenance. A Lease Purchase allows you to do what you do best as an investor. Your objective is to do deals and not get bogged down with time consuming and unprofitable activities.
Where do you do a Lease Purchase? Anywhere people live. Lease Purchasing works on all types of properties like single family homes, condos, town homes, mobile homes and land. You start out locally and then can develop a county, state, national or international business with very low overhead.
Why should you use Lease Purchasing? It’s smart real estate! You profit up front, without buying the home. You learn to control real estate instead of the other way around and you don’t need a real estate license. Let your competition do the old fashioned hard, complicated, costly and high liability stuff.
How do you do a Lease Purchase? You learn the concepts by studying my written, audio and visual information. CheckIn the case of someone who wishes to excel or make a career change, I recommend One-on- One Mentoring. There is no substitute for having your own success teacher.
Monday, May 05, 2008
Tuesday, April 29, 2008
Tuesday, April 08, 2008
The Good Guys Win for once
One of my Mentee's contacted me about a real estate course she took about learning how to invest in real estate. The interesting thing was that the instructors also used their influence to encourage the student to buy home from them. The old bus ride scam. It was in a bad location, unmarketable, needed expensive repairs and was overpriced. In my book this is a complete conflict of interest and probably in violation of a realtors code of ethics.
You either teach or sell real estate but both raises red flags to me. I can't tell you how many people I have heard this same story from. Thankfully my student retained an attorney and was able to recover some of her money. Live and learn.
Be Well-Claude
Hi Claude,
I thought you would enjoy hearing this news -- I received a settlement from the realtors who sold me the condo in Westminster. I asked a real-estate lawyer to write a letter, asking for every cent the realtors made off me, including their commission for selling the property to me and the tuition they charged me for their classes.
They were covered by an insurance policy for this kind of thing, so their insurance paid most of it (nearly $5,000) -- and they had to come up with another $2,000 of their own money. Nobody contested the amount.
So, thank you for urging me to do this.
(Name withheld because we are smart cookies)
You either teach or sell real estate but both raises red flags to me. I can't tell you how many people I have heard this same story from. Thankfully my student retained an attorney and was able to recover some of her money. Live and learn.
Be Well-Claude
Hi Claude,
I thought you would enjoy hearing this news -- I received a settlement from the realtors who sold me the condo in Westminster. I asked a real-estate lawyer to write a letter, asking for every cent the realtors made off me, including their commission for selling the property to me and the tuition they charged me for their classes.
They were covered by an insurance policy for this kind of thing, so their insurance paid most of it (nearly $5,000) -- and they had to come up with another $2,000 of their own money. Nobody contested the amount.
So, thank you for urging me to do this.
(Name withheld because we are smart cookies)
Wednesday, March 26, 2008
What is a Lease Purchase ?
What is a Lease Purchase ? By Claude Diamond J.D.
A Lease Purchase goes by many names such as ‘rent to own’ and ‘lease with an option to
purchase’. Definition: A Lease Purchase is a Rental or Lease and a Purchase Agreement
combined (and sometimes split) with the ability or right to purchase or control specific terms
of an agreement while the property is being rented. Lease Purchases are also known as ‘rent
to owns’ or ‘lease option agreements’, and to you they can mean opportunity. One can
actually negotiate all of the terms of a potential sales price, length of rental, rent credit, escrow
instructions, maintenance and just about anything that you can conceive of. In this way, it is
the same as a conventional Real Estate purchase. A Lease Purchase is an investor’s or first
time potential homeowner’s dream come true! It can enable an investor to actually control a
property without owning it.
Let’s look at just a few ways we can utilize Lease Purchasing.
A. Rent the property: The property can be rented to another.
B. Sell the Property: The property can be sold in almost the same way as if you own it.
C. Sandwich Lease: Sublet it to another giving rent credit and an option to purchase.
D. Assign the contract: Take the deal you negotiated and sell or assign the contract to another.
E. Live in it ourselves: Live in the property, enjoy it and defer the closing until another day when it
is a more opportune time to close on the transaction.
The investor who is knowledgeable in Lease Purchasing can have the seller delegate their property
right via an assignment clause. This can enable the investor the ability to purchase the home at some
future date.
A Lease Purchase is absolutely the best way to control real estate.
If utilized properly, Lease Purchasing can eliminate many of the negatives normally attributed to
real estate purchasing and investing.
Lease Purchasing for the 21st Century©
Chapter I-2
Lease Purchase contracts are essentially rental agreements with the choice or right of purchasing the
same property for some pre-negotiated terms. With a Lease Purchase, you can have all the benefits
of home ownership and control without many of the costs, hassles and liability. A Lease Purchase
can make your rent money work for you instead of making your landlord rich.
On the next page we have a chart which will illustrate what it will actually cost you to continue
renting year after year and getting nothing in return except temporary use of a dwelling.
Lease Purchasing for the 21st Century©
Chapter I-3
RENT EXPENDITURE ANALYSIS
Monthly Rent 1st Year 2nd Year 3rd Year 4th Year 5th Year
$ 500. $ 6,000. $12,000. $18,000. $24,000. $ 30,000.
$ 600. $ 7,200. $14,400. $21,600. $28,800. $ 36,000.
$ 700. $ 8,400. $16,800. $25,200. $33,600. $ 42,000.
$ 800. $ 9,600. $19,200. $28,800. $38,400. $ 48,000.
$ 900. $10,800. $21,600. $32,400. $43,200. $ 54,000.
$1,000. $12,000. $24,000. $36,000. $48,000. $ 60,000.
$1,100. $13,200. $26,400. $39,600. $52,800. $ 66,000.
$1,200. $14,400. $28,800. $43,200. $57,600. $ 72,000.
$1,300. $15,600. $31,200. $46,800. $62,400. $ 78,000.
$1,400. $16,800. $33,600. $50,400. $67,200. $ 84,000.
$1,500. $18,000. $36,000. $54,000. $72,000. $ 90,000.
$1,600. $19,200. $38,400. $57,600. $76,800. $ 96,000.
$1,700. $20,400. $40,800. $61,200. $81,600. $102,000.
$1,800. $21,600. $43,200. $64,800. $86,400. $108,000.
$1,900. $22,800. $45,600. $68,400. $91,200. $114,000.
$2,000. $24,000. $48,000. $72,000. $96,000. $120,000.
Lease Purchasing for the 21st Century©
Chapter I-4
Look for the figure that is closest to your own rent and get out the crying towels. Now don’t
get me wrong, I love renting, but make sure that you are profiting by it. Never rent without a
purchase option and if you currently are renting it is time to make some changes. Be creative,
make your Landlord a Lease Purchase Offer and you’ll both win.
Why do Lease Purchases Work?
Controlling real estate through Lease Purchasing is probably the best keep secret in real estate.
All of the “0” down gurus and their seminars are dying to separate you from your money
with worn out tapes and books! They just have not gotten it ! The typical boring and archaic
way people were (and still are) taught to control properties was to find a property that is in
distress, purchase it with some crazy type of creative finance and put in sweat equity or have
the owner carryback a mortgage. In essence, you were supposed to put 10 or 20% down for
a loan, then spend more money for repairs, then advertise and by some miracle you would get
a tenant, have PCF (positive cash flow) and appreciation would take care of the rest. This is a
fallacy because sooner or later you will run out of money, patience or the economy will take a
downturn. Believe me I know, I was doing just that for years.
What if I showed you the most powerful method ever devised for obtaining profits and control
in real estate? You would not have the responsibility of a mortgage, taxes, insurance,
homeowner fees and best of all no maintenance. WOW !!!!!! Controlling real estate through
Lease Purchasing, whether it’s for your own home or as an investment property, is by far the
superior method of finance. Lease Purchasing helps to remove the traditional adversarial
relationships that exist between buyer and seller and produces greater profits.
Let us examine. In the traditional purchase of a property, a seller must get as much as they can and a buyer tries to pay as little as possible. Then come all the problems of banks, escrows, etc. With a Lease Purchase we can easily avoid these usual headaches. A Lease Purchase buyer, in many cases, can offer to pay full price on the home of their choice if the seller is willing to be flexible with the terms. The seller is happy because they have essentially sold their home, at a future time, and will receive payments to cover their expenses in the meantime. Everyone gets what they want. Best
of all, there is no need at this point to go to a bank and hassle with qualification. In many cases, if the buyer maintains his credibility by scrupulously paying his rent on time the seller will carry back the mortgage or extend the lease option. Now, isn’t this much easier than the typical way people are taught to purchase real estate? (See the Chart below).
RENT OWN LEASEPURCHASE
MONTHLY COST $ 900. 00 PITI*
DOWNPAYMENT $ 900. 00
1St YR. CASH PAID $10,800.
1St YEAR EQUITY $ 0
*principle, interest, taxes, insurance
On a home with a sale price of $125,000.00, a 10% deposit and with a payment of $1000.00 per month (including principle, interest, taxes and insurance) who is getting the most bang for their buck? Obviously, it’s the Lease Purchaser who found a motivated seller and who negotiated a market rent with only two months option consideration and 50% rent credit per month. The traditional renter in a competitive market might only be paying $900.00 per month, but has nothing to show after paying $10,800.00 in rent for the year !!!
The Seller/Landlord with the Lease Purchase has a small positive cash flow if you factor in the
$1800.00 option consideration and the tax benefits. If no realtor is involved that will save another 3-6% in sales commission. The Lease Purchase Buyer, however, has truly reaped the benefit of the bargain. For only $2700.00 (1st month rent + 2 months option consideration) compared with the original buyers $12,500.00 down payment, our Lease Purchase buyer is controlling the home with a greater percentage of equity accumulated in one year, less downpayment and lower monthly payments. The understanding and application of the principles of leverage are utilized to their
greatest potential in Lease Purchasing. Let’s now examine the various viewpoints of the seller,
buyer and investor.
From the Sellers’ Viewpoint:
If you are a seller and the market demand is very low for your property, the best way to get your full asking price would be to Lease Purchase your home. Since you are being flexible on your terms you are entitled to get your full asking price and a higher than average or premium rent for
your property.
CASH FLOW:
1. Money up front
2. Money during
3. Money after the sale
1. When you find a prospective buyer/tenant you normally receive option consideration. This is a non-refundable amount, that in many cases, can be several months rent. We have had properties that yielded thousands of dollars up front. This money goes right into your pocket and this bears repeating Option Consideration is non-refundable (See Contract Chapter) if you state it correctly in your agreement.
2. The seller normally credits a portion of the monthly rent and therefore she is entitled to receive a higher rent for the privilege of granting the Lease Purchase. In most traditional contemporary real estate transactions, unless a great deal of money is used as a downpayment to reduce the mortgage, the payments are usually too high for the property to have PCF (positive cash flow) from its rental.
In a Lease Purchase, since you are allowing the buyer the opportunity to purchase the property at some pre-arranged terms, you are entitled to charge above market rent. Use your own common sense, but if the phone isn’t ringing then you’re probably asking too much.
3. If and when the buyer wishes to utilize her option then you will hopefully receive your capital profits when escrow closes. If the buyer, however, allows the option to expire you also win since you can begin the whole process all over again and either renegotiate the contract or find a new tenant. In either case, you receive more option consideration for the same property. If the property sells, then you use your profits and reinvest it to find another house. The potential for profit for the seller is fantastic since a well negotiated deal will always reap profits at every stage of the Lease Purchase.
Sellers’ Advantages
1. Top sales price (usually no haggling).
2. Large available market of buyers at all times.
3. Better quality tenant.
4. Higher rent than usual for market.
5. Non-refundable option consideration.
6. Maintenance can be delegated.
7. Seller remains on deed.
8. Seller retains tax shelter.
9. No long vacancies.
10. Great cash flow.
11. No realtor commissions to pay ( 3-6% savings).
12. No management headaches.
13. Tax advantages.
14. No closing costs.
15. Safer than conventional rentals.
Lease Purchasing for the 21st Century©
Want to learn more ?
Then go to http://www.TheLeasepurchase.com or just give Claude a call; he really answers his own phone 800 324 4652
A Lease Purchase goes by many names such as ‘rent to own’ and ‘lease with an option to
purchase’. Definition: A Lease Purchase is a Rental or Lease and a Purchase Agreement
combined (and sometimes split) with the ability or right to purchase or control specific terms
of an agreement while the property is being rented. Lease Purchases are also known as ‘rent
to owns’ or ‘lease option agreements’, and to you they can mean opportunity. One can
actually negotiate all of the terms of a potential sales price, length of rental, rent credit, escrow
instructions, maintenance and just about anything that you can conceive of. In this way, it is
the same as a conventional Real Estate purchase. A Lease Purchase is an investor’s or first
time potential homeowner’s dream come true! It can enable an investor to actually control a
property without owning it.
Let’s look at just a few ways we can utilize Lease Purchasing.
A. Rent the property: The property can be rented to another.
B. Sell the Property: The property can be sold in almost the same way as if you own it.
C. Sandwich Lease: Sublet it to another giving rent credit and an option to purchase.
D. Assign the contract: Take the deal you negotiated and sell or assign the contract to another.
E. Live in it ourselves: Live in the property, enjoy it and defer the closing until another day when it
is a more opportune time to close on the transaction.
The investor who is knowledgeable in Lease Purchasing can have the seller delegate their property
right via an assignment clause. This can enable the investor the ability to purchase the home at some
future date.
A Lease Purchase is absolutely the best way to control real estate.
If utilized properly, Lease Purchasing can eliminate many of the negatives normally attributed to
real estate purchasing and investing.
Lease Purchasing for the 21st Century©
Chapter I-2
Lease Purchase contracts are essentially rental agreements with the choice or right of purchasing the
same property for some pre-negotiated terms. With a Lease Purchase, you can have all the benefits
of home ownership and control without many of the costs, hassles and liability. A Lease Purchase
can make your rent money work for you instead of making your landlord rich.
On the next page we have a chart which will illustrate what it will actually cost you to continue
renting year after year and getting nothing in return except temporary use of a dwelling.
Lease Purchasing for the 21st Century©
Chapter I-3
RENT EXPENDITURE ANALYSIS
Monthly Rent 1st Year 2nd Year 3rd Year 4th Year 5th Year
$ 500. $ 6,000. $12,000. $18,000. $24,000. $ 30,000.
$ 600. $ 7,200. $14,400. $21,600. $28,800. $ 36,000.
$ 700. $ 8,400. $16,800. $25,200. $33,600. $ 42,000.
$ 800. $ 9,600. $19,200. $28,800. $38,400. $ 48,000.
$ 900. $10,800. $21,600. $32,400. $43,200. $ 54,000.
$1,000. $12,000. $24,000. $36,000. $48,000. $ 60,000.
$1,100. $13,200. $26,400. $39,600. $52,800. $ 66,000.
$1,200. $14,400. $28,800. $43,200. $57,600. $ 72,000.
$1,300. $15,600. $31,200. $46,800. $62,400. $ 78,000.
$1,400. $16,800. $33,600. $50,400. $67,200. $ 84,000.
$1,500. $18,000. $36,000. $54,000. $72,000. $ 90,000.
$1,600. $19,200. $38,400. $57,600. $76,800. $ 96,000.
$1,700. $20,400. $40,800. $61,200. $81,600. $102,000.
$1,800. $21,600. $43,200. $64,800. $86,400. $108,000.
$1,900. $22,800. $45,600. $68,400. $91,200. $114,000.
$2,000. $24,000. $48,000. $72,000. $96,000. $120,000.
Lease Purchasing for the 21st Century©
Chapter I-4
Look for the figure that is closest to your own rent and get out the crying towels. Now don’t
get me wrong, I love renting, but make sure that you are profiting by it. Never rent without a
purchase option and if you currently are renting it is time to make some changes. Be creative,
make your Landlord a Lease Purchase Offer and you’ll both win.
Why do Lease Purchases Work?
Controlling real estate through Lease Purchasing is probably the best keep secret in real estate.
All of the “0” down gurus and their seminars are dying to separate you from your money
with worn out tapes and books! They just have not gotten it ! The typical boring and archaic
way people were (and still are) taught to control properties was to find a property that is in
distress, purchase it with some crazy type of creative finance and put in sweat equity or have
the owner carryback a mortgage. In essence, you were supposed to put 10 or 20% down for
a loan, then spend more money for repairs, then advertise and by some miracle you would get
a tenant, have PCF (positive cash flow) and appreciation would take care of the rest. This is a
fallacy because sooner or later you will run out of money, patience or the economy will take a
downturn. Believe me I know, I was doing just that for years.
What if I showed you the most powerful method ever devised for obtaining profits and control
in real estate? You would not have the responsibility of a mortgage, taxes, insurance,
homeowner fees and best of all no maintenance. WOW !!!!!! Controlling real estate through
Lease Purchasing, whether it’s for your own home or as an investment property, is by far the
superior method of finance. Lease Purchasing helps to remove the traditional adversarial
relationships that exist between buyer and seller and produces greater profits.
Let us examine. In the traditional purchase of a property, a seller must get as much as they can and a buyer tries to pay as little as possible. Then come all the problems of banks, escrows, etc. With a Lease Purchase we can easily avoid these usual headaches. A Lease Purchase buyer, in many cases, can offer to pay full price on the home of their choice if the seller is willing to be flexible with the terms. The seller is happy because they have essentially sold their home, at a future time, and will receive payments to cover their expenses in the meantime. Everyone gets what they want. Best
of all, there is no need at this point to go to a bank and hassle with qualification. In many cases, if the buyer maintains his credibility by scrupulously paying his rent on time the seller will carry back the mortgage or extend the lease option. Now, isn’t this much easier than the typical way people are taught to purchase real estate? (See the Chart below).
RENT OWN LEASEPURCHASE
MONTHLY COST $ 900. 00 PITI*
DOWNPAYMENT $ 900. 00
1St YR. CASH PAID $10,800.
1St YEAR EQUITY $ 0
*principle, interest, taxes, insurance
On a home with a sale price of $125,000.00, a 10% deposit and with a payment of $1000.00 per month (including principle, interest, taxes and insurance) who is getting the most bang for their buck? Obviously, it’s the Lease Purchaser who found a motivated seller and who negotiated a market rent with only two months option consideration and 50% rent credit per month. The traditional renter in a competitive market might only be paying $900.00 per month, but has nothing to show after paying $10,800.00 in rent for the year !!!
The Seller/Landlord with the Lease Purchase has a small positive cash flow if you factor in the
$1800.00 option consideration and the tax benefits. If no realtor is involved that will save another 3-6% in sales commission. The Lease Purchase Buyer, however, has truly reaped the benefit of the bargain. For only $2700.00 (1st month rent + 2 months option consideration) compared with the original buyers $12,500.00 down payment, our Lease Purchase buyer is controlling the home with a greater percentage of equity accumulated in one year, less downpayment and lower monthly payments. The understanding and application of the principles of leverage are utilized to their
greatest potential in Lease Purchasing. Let’s now examine the various viewpoints of the seller,
buyer and investor.
From the Sellers’ Viewpoint:
If you are a seller and the market demand is very low for your property, the best way to get your full asking price would be to Lease Purchase your home. Since you are being flexible on your terms you are entitled to get your full asking price and a higher than average or premium rent for
your property.
CASH FLOW:
1. Money up front
2. Money during
3. Money after the sale
1. When you find a prospective buyer/tenant you normally receive option consideration. This is a non-refundable amount, that in many cases, can be several months rent. We have had properties that yielded thousands of dollars up front. This money goes right into your pocket and this bears repeating Option Consideration is non-refundable (See Contract Chapter) if you state it correctly in your agreement.
2. The seller normally credits a portion of the monthly rent and therefore she is entitled to receive a higher rent for the privilege of granting the Lease Purchase. In most traditional contemporary real estate transactions, unless a great deal of money is used as a downpayment to reduce the mortgage, the payments are usually too high for the property to have PCF (positive cash flow) from its rental.
In a Lease Purchase, since you are allowing the buyer the opportunity to purchase the property at some pre-arranged terms, you are entitled to charge above market rent. Use your own common sense, but if the phone isn’t ringing then you’re probably asking too much.
3. If and when the buyer wishes to utilize her option then you will hopefully receive your capital profits when escrow closes. If the buyer, however, allows the option to expire you also win since you can begin the whole process all over again and either renegotiate the contract or find a new tenant. In either case, you receive more option consideration for the same property. If the property sells, then you use your profits and reinvest it to find another house. The potential for profit for the seller is fantastic since a well negotiated deal will always reap profits at every stage of the Lease Purchase.
Sellers’ Advantages
1. Top sales price (usually no haggling).
2. Large available market of buyers at all times.
3. Better quality tenant.
4. Higher rent than usual for market.
5. Non-refundable option consideration.
6. Maintenance can be delegated.
7. Seller remains on deed.
8. Seller retains tax shelter.
9. No long vacancies.
10. Great cash flow.
11. No realtor commissions to pay ( 3-6% savings).
12. No management headaches.
13. Tax advantages.
14. No closing costs.
15. Safer than conventional rentals.
Lease Purchasing for the 21st Century©
Want to learn more ?
Then go to http://www.TheLeasepurchase.com or just give Claude a call; he really answers his own phone 800 324 4652
Tuesday, March 18, 2008
OK, What does Nouveau Riche have to do with Lease Purchase real estate?
Nouveau Riche literally mean "New Rich" . It means you didn't inherit your wealth but created it.
This New Lease Purchase video with has to deal with creating a few Nouveau Riche mentee's.
This New Lease Purchase video with has to deal with creating a few Nouveau Riche mentee's.
Friday, January 11, 2008
How about a Hawaiian Vacation and 25K ?
I will be speaking in Hawaii on Feb 14th with a 25K giveaway
Friday, October 19, 2007
Thursday, October 18, 2007
Free Lease Purchase and GUTS Sales Downloads
Free Lease Purchase and Guts Sales training system downloads from Claude Diamond. Just click on
http://www.ClaudeDownload.com
Saturday, October 06, 2007
GUTS Sales Training Exam
Your Sales Profitability Assessment
Complete this survey to get an understanding of your sales Effectiveness and Profitability with The GUTS Sales Training System.
1. Give a presentation, brochures and powerpoint slide show to your prospect as soon as
possible?
Answer: False. It’s an Unbelievable Waste of Time. Ask some tough upfront questions
with finesse first. If they don’t have the need, money or character/authority to
give a commitment, you are just spinning your wheels.
2. It’s all right for a prospect to think it over before committing?
Answer: False. Not in the G.U.T.S.™ world of selling. Think it over means you have lost control and probably never had it in the first place. It’s the prospect’s way of really saying ‘no’ to you, but trying to be polite. I often tell a prospect upfront, that they are not allowed to worry about my feelings. I ask them to just be honest enough to say ‘no’ if my product or service is wrong for them. In alternative cases, I will tell the prospect that it’s Over. Note: See my www.youtube videos, specifically, “It’s OK to fire the prospect”.
3. Always ask for the order?
Answer: False. Never ask for the order unless you are a beggar. The professional controls the sales process and allows the Prospect to give him the order. Is it any wonder that most salespeople are annoying or that they have a large number of prospects who renege on the order the next day, aka: buyer’s remorse?
4. Cold Calls are necessary for successful selling?
Answer: False. Never make cold calls unless you are a masochist. All calls to strangers should be approached as a return call. Successful selling is a combination of being a Thespian and Therapist. Always act like you are getting back to the prospect.
Salesman: Hello Mr. Prospect, I have your number here. Why are we talking?
Prospect: I don’t know, you’re the one who called me.
Salesman: This isn’t about real estate is it?
Prospect: Well, I do have a house for sale.
Salesman: OK, now I understand. How can I help you?
5. Stalls and Objections are opportunities to get commitments.
Answer: True. When a prospect brings up a problem to the average salesman, they become defensive and go right back into their presentation schtick. The Pro, however, uses this opportunity to make a sale.
Prospect: We only buy hybrid widgets in lots of 100 and yours are 150.
Salesman: What would happen if we could make them in 100 unit lots?
Prospect: We would consider it.
Salesman: What do you mean by consider? What would I have to do to earn you business today?
Prospect: Well, I can give you an order for the next quarter if you can deliver them in the smaller amount of 100.
Salesman: Suppose you took the 150 lot, but I was able to save you 20% because of the larger quantity. What would you say?
Prospect: If you can save me 20%, then you have a deal.
Salesman: What? I couldn’t hear you.
Prospect: (Yelling) I said you can have the order now!
6. Work hard always.
Answer: False. While working hard is commendable, working smart puts money in your pocket. Working hard with unqualified time wasting prospects is foolish. I would rather spend more quality time with a prospect who has a Need with the ability to pay for it and the character and authority to give me a commitment leading to an order.
7. Sales is about being a Missionary and spreading the word about your product or service.
Answer: False. Sales is about making money by selling products and services that give unbelievable value to your prospects.
8. Sell yourself before you sell the product or service.
Answer: False. This is the old fashioned way of selling. Prospects are not buying your tired rapport and bonding fishing stories; they are really buying solutions for their needs, greeds and fears. Pretentious type, “I want to be your friend” selling, is an insult to both parties. “If you want a friend then get a dog.” Harry Truman
“If you want a life without worrying about money, then get to the bottom line fast with finesse”. Max
9. Prospects buy when they become informed.
Answer: False. Prospects buy first, because of an emotional motivation or catalyst. They only justify their purchase with academic information later on.
10. Sales is the Highest paid profession in the world?
Answer: TRUE ! The highest paid people in business may have titles like entrepreneur or CEO, but in reality they are just great salespeople. The problem with 99% of salesmen is that they are not professional and have not learned the skills of the art and science of human persuasion and behavior. Sales is about having a Method that allows you to control the process and the ability to feel great about yourself while making unlimited income.
Complete this survey to get an understanding of your sales Effectiveness and Profitability with The GUTS Sales Training System.
1. Give a presentation, brochures and powerpoint slide show to your prospect as soon as
possible?
Answer: False. It’s an Unbelievable Waste of Time. Ask some tough upfront questions
with finesse first. If they don’t have the need, money or character/authority to
give a commitment, you are just spinning your wheels.
2. It’s all right for a prospect to think it over before committing?
Answer: False. Not in the G.U.T.S.™ world of selling. Think it over means you have lost control and probably never had it in the first place. It’s the prospect’s way of really saying ‘no’ to you, but trying to be polite. I often tell a prospect upfront, that they are not allowed to worry about my feelings. I ask them to just be honest enough to say ‘no’ if my product or service is wrong for them. In alternative cases, I will tell the prospect that it’s Over. Note: See my www.youtube videos, specifically, “It’s OK to fire the prospect”.
3. Always ask for the order?
Answer: False. Never ask for the order unless you are a beggar. The professional controls the sales process and allows the Prospect to give him the order. Is it any wonder that most salespeople are annoying or that they have a large number of prospects who renege on the order the next day, aka: buyer’s remorse?
4. Cold Calls are necessary for successful selling?
Answer: False. Never make cold calls unless you are a masochist. All calls to strangers should be approached as a return call. Successful selling is a combination of being a Thespian and Therapist. Always act like you are getting back to the prospect.
Salesman: Hello Mr. Prospect, I have your number here. Why are we talking?
Prospect: I don’t know, you’re the one who called me.
Salesman: This isn’t about real estate is it?
Prospect: Well, I do have a house for sale.
Salesman: OK, now I understand. How can I help you?
5. Stalls and Objections are opportunities to get commitments.
Answer: True. When a prospect brings up a problem to the average salesman, they become defensive and go right back into their presentation schtick. The Pro, however, uses this opportunity to make a sale.
Prospect: We only buy hybrid widgets in lots of 100 and yours are 150.
Salesman: What would happen if we could make them in 100 unit lots?
Prospect: We would consider it.
Salesman: What do you mean by consider? What would I have to do to earn you business today?
Prospect: Well, I can give you an order for the next quarter if you can deliver them in the smaller amount of 100.
Salesman: Suppose you took the 150 lot, but I was able to save you 20% because of the larger quantity. What would you say?
Prospect: If you can save me 20%, then you have a deal.
Salesman: What? I couldn’t hear you.
Prospect: (Yelling) I said you can have the order now!
6. Work hard always.
Answer: False. While working hard is commendable, working smart puts money in your pocket. Working hard with unqualified time wasting prospects is foolish. I would rather spend more quality time with a prospect who has a Need with the ability to pay for it and the character and authority to give me a commitment leading to an order.
7. Sales is about being a Missionary and spreading the word about your product or service.
Answer: False. Sales is about making money by selling products and services that give unbelievable value to your prospects.
8. Sell yourself before you sell the product or service.
Answer: False. This is the old fashioned way of selling. Prospects are not buying your tired rapport and bonding fishing stories; they are really buying solutions for their needs, greeds and fears. Pretentious type, “I want to be your friend” selling, is an insult to both parties. “If you want a friend then get a dog.” Harry Truman
“If you want a life without worrying about money, then get to the bottom line fast with finesse”. Max
9. Prospects buy when they become informed.
Answer: False. Prospects buy first, because of an emotional motivation or catalyst. They only justify their purchase with academic information later on.
10. Sales is the Highest paid profession in the world?
Answer: TRUE ! The highest paid people in business may have titles like entrepreneur or CEO, but in reality they are just great salespeople. The problem with 99% of salesmen is that they are not professional and have not learned the skills of the art and science of human persuasion and behavior. Sales is about having a Method that allows you to control the process and the ability to feel great about yourself while making unlimited income.
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