How to Get Greater Clarity Around an Investor’s Goal

Real estate investors often have more property considerations to make than the typical home buyer. Help them focus.

How do you handle the investor who is sapping all your energy? Step one is to clarify what the client truly wants—and the rest will fall into place. That’s the advice Rychen Jones, a broker with Presidio Real Estate in the Salt Lake City area, imparted at a Thursday session during NAR NXT, The REALTOR® Experience, in Anaheim, Calif.

Jones recalled counseling a colleague once whose client was driving her to tears. The difficult client wanted to buy a vacation property—without a sense of direction. Trying to be accommodating, Jones’s colleague was driving her client hundreds of miles around the entire state to look for homes.

“She was ready to give up,” Jones explained. He asked his colleague several questions:

  • Do you know what your client is looking for?
  • Do you know what he’s willing to spend?
  • Do you know what’s most important to him?
  • Does he know what he’s looking for?
  • Does he know what he’s willing to spend?
  • Does he know what’s important to him?

His colleague answered no to all these questions. Ultimately, she was lacking clarity.

It’s essential to dive deeper into the psychology and motivation behind your client’s decisions. “Remember, real estate isn’t an impulse buy,” Jones said. “Lunch is.”

He referenced the book Never Split the Difference by Chris Voss, a former FBI negotiator whose credo is that “no” is better than “yes,” and “that’s right” is better than both. The purpose is to give the client a sense of agency and safety before they fully commit, and that means getting a person to articulate and explain their rationale for decision-making.

Using Voss’ method, an agent would ask multiple clarifying questions before showing the client various listings. For example, if the client says no to looking at properties in a certain location, rather than asking a simple “why” question, the agent should ask: “Are you saying ‘X’? Tell me more about that,” Jones says. Then, reword what you hear from the client: “If I understood you correctly, you believe ‘Y.’” By going deeper in conversation, you get to the “that’s right” agreement where everyone is on the same page.

Jones said the three most essential clarifying questions for deciding on a long-term investment are:

  1. What’s the best-case scenario?
  2. What’s the worst-case scenario? (And is this really the worst it can get?)
  3. Can I live with the worst-case scenario?

These theoretical scenarios build mutual trust between agent and client while exposing whether the client is more of a “thinker” versus a “feeler” when it comes to how their belief system guides them toward certain choices, Jones said.

Agents must avoid what Jones called the “confused investor spiral”:

  • Wasting time with the wrong properties
  • Frustration/confusion
  • FOMO
  • Impulse buying
  • Unable to execute better opportunities
  • Regret over purchase
  • Poor exit strategy
  • Bad experience/loss of faith in the process or real estate
  • Paralysis/overthinking next opportunity

To avoid the above scenarios, he asks clients to narrow among the following investment goals. Multiple goals could be true:

  • Cash flow (current or future)
  • Tax savings
  • Safety of principal/principal reduction
  • Appreciation
  • Short-term rental
  • Buy, rehab, rent, refinance (BRRR)
  • Fix and flip
  • 1031 tax-deferred exchanges

Once Jones gets clarity, it’s time to talk money. First-time investors might underestimate how much they have to spend, Jones said, adding that the typical financial buckets include personal assets, business assets and other assets. “If you don’t have enough money to invest in a property yourself, find a partner,” he often recommends. “I show this visually to my clients, and people start to see they have more assets than they thought they did.”

What everyone wants to avoid is indecision. The power lies in keeping the client engaged and avoiding distraction. “Give your clients short, actionable, meaningful steps,” Jones said.

“I tell clients: Set up a phone call with your lender, or file your taxes. Give them something they can do in the next 24 hours to prepare. Then, I commit to making a few calls myself,” he says. He summarizes their next steps for the week ahead and lets them know he will be following up in a few days to hold everyone accountable.  

“We would all love to have clients that are decisive. But that’s not the reality,” Jones said. “When they can see the other side of the bridge and don’t know how to get there, we help them get there by being professionals.”