New Note

Create a note for yourself from this lesson. Notes allow you to quickly jot down any valuable information you'd like to review later. You can find your notes by clicking on "My Notes" in the profile navigation menu.


Competition Killer Part 3: "There Can Be Only One"

Want our secret lead generation strategy that even the "GURUS" don't know about? Get our specific proven advice that will work in YOUR market today!

(NOTE: Want the absolute EASIEST way to find houses at 50% off their value? Learn more with our latest this special report.)

12-12 comp killer 3 header

jp mosesA Word from JP Moses, Director of Awesome...

This is third and final part of our min-series of lessons with Shaun McCloskey. We had a chance to sit down and discuss how he’s crushing his competition, and whoa boy did we get some awesome stuff!

In the last two “Competition Killer” lessons we taught you how to build instant, unparalleled rapport by mirroring and modeling four senses (read part one here) and then we showed step-by-step how you can use simple yet subtle “Jedi mind tricks” to get people to really open up, spill what they really need help with, and ultimately get the deal underway (read part two here). 

In this final “Competition Killer” lesson, Shaun is going to share with you one of the most important pieces to the “Competition Killer” puzzle: Why and how to be the only person working with the seller on any given deal.  He’s going to share a true story that illustrates this point amazingly (and I hope it never happens to you!).

As a seasoned short sale real estate investor in St. Louis, Shaun has been running a full time real estate investing business all the while teaching others how to invest in short sales.  He’s a “systems guy” and has even trained his own team on how to use his competition killer strategies he’s sharing here with you – though one of his new hires forgot this one important step and learned the very hard way. Read on as Shaun shares this important story and lesson too.

By the time you finish this lesson you’ll understand why ultimately “there can be only one” person negotiating a deal – a principal to apply whenever you’re dealing belly to belly with a private seller, regardless of your niche focus.

From Shaun McCloskey, Deal-Getting Advisor…

Once They Deal With You And YOU ONLY!

only oneWhat I’m about to say is absolutely fundamental to your deal. Do not waiver on this point.

After you've gotten your prospective homeowner to open up to you, trust you and finally decided to allow you to work on a deal for you (short sale or otherwise), next you must make sure you convey to the homeowner that once they deal with you, they deal with you only.

They must understand in no uncertain terms the importance of not working with any other real estate agents, investors, etc., without talking to you first.

Understand this is not a personal “thing” that says I’m afraid of a little competition, and this is not a strong-arm type of approach that I take with the homeowner either. The fact is, if I am truly looking out for the homeowners’ best interest (and I am), this information is an absolute MUST for them to be aware of.

 (By the way, this true story is the exact same story that I tell my customers on every single appointment that I go on. I absolutely do NOT skip this step under any conditions.)

The Indelible Mrs. Watson Incident

When I first got started doing short sales, I received a phone call from a Mrs. Watson from South City, St. Louis. She owed about $75,000 on her house. It was a cute house, and it was in a very decent area. Nothing spectacular, but it had a lot of potential. There were, however, a couple of key problems.

First, the amount she owed might have been realistic to the true value – if only the house hadn't been literally leaning to one side.

leaning houseThis house definitely had foundation problems, and since I didn't really know all that much about foundation problems, it looked pretty serious to me.

When I pulled up to the house, I could
physically see that the entire house was tilting to
the right. I didn't know anything about
foundation problems at the time, but what I did know is that I was scared of the property because of how it looked, which meant that I was pretty sure that the lender would be scared of the property too.

(Hmmmm... This could be a very good thing in a short sale situation…)

NOTE:  if you haven’t been through my lesson on how to know which short sales to go after, be sure to go through that lesson and you’ll understand why!

This Was a Textbook Short Sale Deal

I met the nice woman at her home, went through our normal routine, and she, like so many of the people we work with, just wanted to be done with the house. She was ready to move on, but she was overly concerned about her credit . . . more so than most of the people that we deal with.

Although at the time I was relatively new to using the techniques I described earlier in dealing with real estate sellers, I was able to build an incredible amount of rapport with her very quickly (using the techniques from “Competition Killer” Lessons 1 & 2).

I discussed the ramifications of the short sale with her, what all it entailed, and she was very much ready to work with me. She really felt like this was the right thing for her, and happily signed all of the necessary documents to get the ball rolling.

So far, this was a pretty typical short sale deal. We compiled our short sale offer, sent it to the lender, and it wasn't long before the BPO was ordered. It couldn't have been a better textbook short sale deal.

BPO Perfection

We attended the BPO, and it went PERFECTLY. The first thing that the BPO agent said when he got out of the car was, “Oh my God! Is this house going to fall over?”

Needless to say, he put in an extremely low opinion on his valuation of the property. As a matter of fact, his number was right in line with the offer that we had already submitted to the lender.

$60,000 short saleAbout a week later, we got a call from the lender notifying us that our short sale approval was being written up and that we should be expecting it in writing by the following morning!

The lender approved our very first offer of $14,750.00!! That’s a $60,000 discount on a 1st mortgage!

I was ecstatic about this because I already had it sold to another investor (one who was quite comfortable with foundation repairs needed). He contracted to buy it from me for $26,000.00.

Done Deal (…Right?)

So it was pretty much a done deal, and I was set to make a quick $11,000 on the deal...


I was busy counting my money (in my head), when about an hour after I’d spoken with the lender my phone rang again. It was the lender... again. The loss mitigator explained that she was a little bit confused and wanted to know if I worked with a person named “Butch Jenkins” .

I’m dumbfounded. I had no idea who she was talking about, and I began to feel a bit unnerved – and for good reason it turns out.

Come to find out, Butch Jenkins is another investor. Butch started working with my customer just a couple of days before I received the phone call and had just now decided to put in a short sale offer of $25,000.00 right out of the gate.

And whose offer do you think the lender was going to accept? Needless to say, I was no longer buying the property for $14,750.

I couldn't believe what I’d just heard! How could Mrs. Watson do this to me? We had built such great rapport . . . I didn't skip any steps . . . I didn't go too fast for her. She was really excited about her decision . . . Why would she go behind my back and work with someone else?


wait, what?I called her up immediately to find out.

When she answered, she was so happy to hear from me and just as sweet as she was the first day that I met her out at the house.

tried to keep my composure on the phone, but to be honest with you, I was pretty ticked off. Here I had just spent the past few weeks working on this deal to try to save her credit and help out her bad situation, and I just couldn't figure out why she would start working with someone else.

So I decided to share with her all the details of what was going on, and she seemed just as confused as I was. I told her that some other investor had made contact with the lender and offered more than I did, and because of that, the lender was trying to now create a bidding war between the two of us. And because of this, Butch pretty much messed up our entire deal.

I told her how I had just gotten the approval, and now the lender was going to back out of the deal because they knew they had a higher offer on the table than mine.

I could hear the disappointment in her voice when I asked her why she decided to work with someone else. She simply replied,

“Shaun, I honestly thought that two people working on this would be better than just one person working on it. Butch thought the same thing, and that’s what he told me.”

And you know what?

I Believed Her.

I really do believe that Mrs. Watson honestly thought that two people working on the deal would be better than just one person.

Not only that, but after talking to Butch on the phone, I can see where he would try to manipulate her into letting him work on a short sale at the same time that I was.

I called Butch to see if he would withdraw his offer and explain to the lender that he didn't realize how much foundation damage that the property had.

He wouldn't cooperate. I even told him that I would split part of my profit with him, and he wouldn't back down. He approached it like a cold-hearted businessperson looking out only for himself. When I asked him why he would try to work on a short sale that he blatantly knew was already being worked on, he simply said that the highest offer wins, and that I was out of luck.

Butch Won, but Mrs. Watson Lost

12-12 highlander butchNow . . . IF I was a total jerk (which to be honest with you, I really felt like being at this point), I could have just gone ahead and recorded the deed that I already had signed from Mrs. Watson at our initial meeting.

I checked with the county and Butch hadn't recorded anything against the property. I checked with the homeowner, and she said that she never signed a deed with him . . . only with me.

So, if I wanted to play hardball, I certainly could have... but I didn't. I didn't only because it would have only ended up hurting Mrs. Watson.

So I let it go. I let Butch win. As much as it killed my ego to just let him win, I knew letting him close the transaction was in the best interests of Mrs. Watson, and I decided to just let it go.

Now get this . . .

I got the phone call from Mrs. Watson a couple of weeks later. Come to find out, Butch could never get the money together to close the transaction, and the house ended up going to foreclosure.

Not only was I furious to hear this news, but as I’m sure you could imagine Mrs. Watson wasn't all too happy either.

The Moral of this Sad Story

The moral of the story is this: If more than one person works a short sale on the same property at the same time, the only person who really ends up winning is the lender.

The lender tried to create a bidding war against Butch and I, and I’m not about to play that game – especially since Butch’s first offer was almost the same amount I was selling the property for!

And in the end, Butch either didn't have the resources or didn't have the integrity to follow through. And no one wins there!

Do This

you are my only oneNowadays I make sure I always tell each homeowner a condensed version of this same story at each appointment so that they know, without question that our deal is exclusive once we agree, and to deal with anyone else simultaneously is not appropriate.

If they do, chances are they’re going to be in the same boat that Mrs. Watson found herself in anyway .

I challenge you to do the same. If you have a similar story, then share it with every single homeowner you’re negotiating with to make the point. Or borrow my story as “someone you work closely with” and use it to impress upon them how important it is that once they start working with you, they need to commit to work only with you, or risk inadvertently sabotaging the deal, the same way Mrs. Watson accidentally let Butch.

BACK OFF! Don’t be a Butch!

Also, if you come across a deal and realize another investor is already working a short sale with the lender, BACK OFF! Don’t be a Butch! There are way too many fish in the sea to be a Butch! And your integrity is the most valuable asset you have – don’t lose it!

It’s not going to do you any good to create a bidding war against you and the other guy. If you’re seriously interested in the property, call the other investor working on it and let him know that you’re interested in working the deal together.

In most cases the other investor will probably love to have a buyer like you lined up for when the deal gets approved. If he/she is not interested in working with you, move on. There are plenty of other deals out there, believe me.

Let the Homeowner Know You Will Walk Away

Another important note I should make at this point is that I also use my initial appointment with the seller to explain very candidly that I will gladly walk away from the transaction at any time if they feel like they would rather work with someone else.

I go on to explain the only thing that I ask if this ever happens, is that they make sure they call me right away to let me know so that it doesn't end up hurting them in the long run. By reiterating how it will affect them, they won’t ever try to work with someone else (or even attempt another solution) without talking to me first. In fact, I've never had a problem since I started relaying this story.

Don’t Forget to Train Your Staff and Partners on this

only one investorAt the same time, I recently hired a new employee, and I forgot to let him know how important this information is to relay to a homeowner . . . and guess what? He lost his first deal because of a very similar situation. Do you see why this is so important?

Either way, if you’re not relaying this information to the homeowner on the front end, you’re not only dramatically increasing the possibility of doing a whole lot of work for nothing, you’re also not doing someone like Mrs. Watson any favors either.

This two-minute story could be crucial to your deal. As I said, feel free to use my story as your own. And you can be honest with the homeowner as you tell the story too. You don’t have to say that this exact same thing “happened to you.” You can just tell the homeowner that this happened to a friend of yours and you don’t want to see it happen again.

Decapitate Your Competition?

As you may have noticed, I'm a big fan of the movie Highlander from the 80's. (Most really smart and awesome people are ;-)

As made epicly famous in Highlander, when it comes to working any given deal, once they shake hands with you, “there can be only be one”

I'm not promising immortality or requiring that you must decapitate all your competitors (please don’t), you do need to make it absolutely clear that once they deal with you, they deal with you only! 

Do It To It! Immediate Action Steps
  • Plan. Think through how you'll share this story (or your own version of it) at your first appointment with every single private seller from now on. 
  • Practice. Find a friend to guinea tpig for you and practice using this story to make it absolutely clear that once they deal with you, they deal with you only... Otherwise it will only end up hurting them in the long run.
  • Train. If you have staff or partners who handle seller appointments on your behalf, make them read this lesson and start applying this also.

Is there a topic you'd like to learn more about? Request a Lesson


+ Mark as Learned

Valuable Lesson? Share it:


Request a Lesson

At RealEstateMogul.com, mogul_guarantee.pngwe’re committed to delivering the awesomest, most practical, actionable content to our members … and that a big part of that is getting YOU to tell us what you'd like to learn from us. Since our REI resources are basically endless, we’d love to tailor our upcoming training as much as possible to precisely match what you, our members, really need and want out of us.

jpsig.png Request form