Everyone has their own version of a ‘sales’ school of hard knocks. For me it was my introduction into the manufactured home space. It’s still some of the most difficult and rewarding sales experience I have ever gained.
First, let me provide some background information on manufactured homes and type of clients that come with them. Manufactured homes, more commonly referred to as mobile homes, are very basic housing structures that are usually constructed in a factory and then moved out to a designated location by a semi-trailer truck. They come in various dimensions and styles, such as single-wide, double-wide and triple-wide trailers. Manufactured homes are not to be confused with RVs or 5th wheel camper trailers. Manufactured homes are constructed with the intention to be placed onto a foundation and remain there for many years, similar to single family homes. However, manufactured homes can have axles and wheels installed in order to move it to a new location. Think of manufactured homes as lower quality, smaller single family homes. They have many of the same amenities like furnaces, air conditioners, washers, dryer, stoves, refrigerators, dish washers, showers, sinks and bathtubs. Yet, often manufactured homes are not affixed to the land that they reside on. As a result manufactured homes are considered ‘personal property’ not ‘real estate’. This affects the value greatly. Depending on the year of the manufactured home, it’s location and current condition the value can range from $0.00 to over $100,000. That is not a typo. I have purchased many manufactured homes for zero US dollars. Let me also add that no Multiple Listing Service (MLS) exists for manufactured homes. Unless you have some experience in this field you might as well wet your finger and hold it up in the air to determine values.
Now, on to the cast and crew. If you have never set foot inside a mobile home park I highly suggest that you pencil a time slot into your calendar. Nothing happens within a park community that doesn’t become everyone’s business shortly after it takes place. For some reason this doesn’t deter the level of tomfoolery at all. I once sold a manufactured home to a young couple with kids who later decided to steal other resident’s dogs and sell them online in order to make a quick dollar. This brings me to the first rule in manufactured homes: never allow yourself to become surprised by anything, EVER. I feel the same rule applies to sales as well. Now, let me clarify that there are many outstanding people who live in manufactured homes and within mobile home parks. With that being said, my experience has told me that a decent percentage of people who live within mobile home parks are uncomfortably honest to the point where the social emotion of ‘shame’ is nonexistent.
Why spend all this time and effort to tell you about manufactured homes and the people who live in them? Simple, because it is one of the best environments to sharpen one’s sales skills. You have a product that is actually a place where individuals and families live and raise their children. Lot’s of emotions involved. This product is relatively inexpensive compared to actual real estate. It is considered personal property and therefore the title (deed) can be transferred in the same manner as a motor vehicle. Lastly, you are typically dealing with buyers and sellers who have obliterated credit, deal in cash, wide open to bartering and creative terms, and go from hot to cold and back to hot in a matter of minutes.
Below are the major sales skills, or lessons that I’ve learned the hard way through manufactured homes. I use everyone of these tactics on a daily basis.
- Mirror whoever is sitting across from you at the negotiating table. If they talk fast, you talk fast. If they have a million questions, you give them a million and one answers.
- Ask qualifying questions. If you can, try to never ask questions that someone can answer with a simple ‘yes’ or ‘no’. The more someone talks the more information you have to assess and analyze.
- NEVER, EVER provide the first number when negotiating. Always force the other person to give you the goods first. This tactic sounds simple, but I struggled with this one for a while.
- Never come across desperate. Be prepared to walk away at anytime for any reason.
- Always close. You never get what you do not ask for. I don’t care how ridiculous or one sided an offer may seem in your own head. Don’t tell yourself ‘no’ before you let the other person tell you ‘no’ first.
For the conclusion I want to provide a personal example that turned out to be a complete home run. This example will really hammer home tactic #3 above. One day my buddy calls me up and tells me that he has a friend who knows a lady that is open to selling their manufactured home. Through several conversations with my buddy, my buddy’s friend and the lady that my buddy’s friend knows I determined that this was a very real opportunity. Two days later I have the lady who owns the manufactured home in my office singing paperwork. I discovered that the lady not only owned the manufactured home, but she also owned the parcel of land underneath it. I also discovered she was hurting financially, had not paid her property taxes in over 3 years and the property was going to auction in less than 2 months. Everything was set up for me to acquire this home and land at a very steep discount. So, what’s the right price? How do you determine something like this?
Well, I had an idea in my head that I would be willing to pay up to ten thousand dollars for both the home and the land. However, I didn’t tell the lady this. Instead I asked her the following ‘qualifying’ question instead:
What amount do you NEED in order to sell me this home and land?
Her response was exactly what I was hoping it would be. She replied:
Well, i’m not sure…. How about one thousand dollars?
Jackpot! Because I let her tell me the number first I instantly saved myself nine thousand dollars. Now, I actually countered the lady back and told her I would give her three thousand dollars if she agreed to finance me. She agreed and I ended up paying her 10 installments of $300 for the next 10 months. She was absolutely ecstatic. She was going to get two thousand more dollars than she initially thought, which was three thousand times better than what she would have received if the property actually ended up going to auction. I payed seven thousand dollars less than I wanted to and it would be broken up into payments. I fixed up the manufactured home, had it affixed to the land so it was considered real estate and sold it for $86,000 four months later. That’s and Return on Investment (ROI) of 2,767%.
DON’T EVERY THROW OUT THE FIRST NUMBER!!!