In every property transaction, a seller is going to have objections. Sales objections are not necessarily doors slamming in your face; instead, these are moments of hesitation where the seller needs more information to feel comfortable going through with the deal.
If you ever bought or sold a property, you know the hurdles and uncertainty. So you can sympathize with homeowners, knowing they only want to walk away from their distressing housing issue but get some value out of it.
Here is a list of the most common real estate investing seller objections and how to respond to them.
1. Homeowner: “I’m not interested.”
This is a common objection – do not take it personally. I am sure even you have said it to a sales pitch before, even before hearing what they had to say. There are three things you can do to combat this objection, in this order:
- First, tell them you know how they feel, and that you only want to offer them an easy solution if they are interested in selling fast for cash. Ask for 30 seconds of their time.
- Second, if they are willing to hear you out, list the benefits of selling to you versus a traditional buyer.
- Third, if they still insist they are not interested in selling, leave them your name and number. You can call them later on to see if their situation changes. Yet, don’t expect them to call you, it’s on you to do the follow-ups.
2. Motivated Seller: “My friend (or relative) is an agent.”
Chances are most people know someone in real estate, and they want to give that person their business. Your counter to this statement may be to point out that an agent takes a 3% to 6% commission from the sale. Also, reinforce how much money they will lose by listing it.
You, however, do not require commissions or traditional sale warranties and inspections. Also, you can close in a matter of days versus an agent who may not find a buyer right away.
3. Motivated Seller: “I’m going to try listing it with an agent.”
Listing is the norm when selling a property, and property owners think it’s the best way to get a good deal. Let them know that while listing can work, it will take at least 45 days to get paid, and that includes preparing the listing and the mortgage loan process. Also, a buyer (encouraged by lender requirements) will demand repairs.
Again, mention how much they lose from the asking price to pay the real estate agent, plus any closing fees and average costs in meeting buyer or lender requests.
4. The FSBO Seller: “I want to try to sell it myself.”
People try to sell a house For Sale By Owner (FSBO) to save money on commission and have more control over the situation. There are challenges though, including listing and marketing the property, finding a buyer and meeting their needs. Also, the seller still has to pay a commission to the buyer’s agent.
Anyone with a full-time job and family will find it hard work selling a property FSBO. But you can buy the property in a few days – no commissions, warranties, or inspections attached. This saves the seller time and money, and lets them focus on their next home faster.
5. Motivated Seller: “How do I know I can trust you? How do I know this is not a scam?”
In today’s market, no one can be too careful. The best way to build brand awareness and credibility is to have a website with testimonials and a strong presence on social media. This way sellers can find you and research your business.
Highlight videos and testimonials from satisfied sellers on your website to improve your reputation and gain the trust of your motivated seller lead. Articles discussing common seller pain points and answering common questions also helps build credibility and adds value to your target seller, making you an expert in solving the problems for a particular niche.
Refer the seller to your website and offer to answer any of their outstanding questions.
6. Price Sensitive Seller: “We would rather make repairs and sell for a higher price.”
A lot of homeowners believe that if they fix up their property, they’ll fetch a higher price for it. This is not always true. Some repairs and renovations do not have a good ROI and actually waste time.
Be ready to throw out some numbers on cost versus gain, and even refer sellers to where they can get accurate numbers. We recommend using Remodel Magazine as a reference.
Chances are they will not take your word for it right then, so plan on doing a follow-up where you remind them that you’ll buy their property “as-is,” be it damaged, neglected, or even cluttered. You’ll give them the market value AFTER repair value. And, if you’re willing to pay 100% of the closing costs and associated sale fees, you’ll actually save them money.
7. The Market Value Seller: “I want more money for my property.”
Who doesn’t want more money? Inform the seller that estimates on Zillow and Redfin are based on limited information. Your offer is based on the information the seller gives you, plus any comparables you pull for similar properties. You can offer a rough estimate to restore the house and perhaps persuade the seller that yours is the better offer if the house is actually worth less than they think.
Another consideration is to suggest creative financing to get as close as possible to the market value, in particular if you have buyers for it.
8. Landlord Wannabe: “I have decided to rent it.”
You can caution the seller about bad tenants and code violations, and remind them they’ll be responsible for maintenance, utilities, and taxes. Tenants who refuse to leave result in costly evictions, and if the property is not Free and Clear, they may find themselves with two mortgages to pay.
Being a landlord is not a bad idea. It can be lucrative and earn you a passive income. On the flip side, it comes with a lot of responsibility and potential problems, as you may know if you Buy and Hold.
Being a landlord can be a stressful job with a lot of extra work. And yes, they can hire a property manager but that just makes it an extra expense and too much paperwork for just one rental.
9. Financial Distressed Homeowner : “I’m going to file for bankruptcy.”
There are two types of homeowners who decide to file for bankruptcy:
- Those who are in debt and can no longer afford to keep their property, who feel discouraged and may throw in the towel;
- And those who know that filing emergency bankruptcy can delay foreclosure.
To the first, be the light at the end of the tunnel, by saving what is left of their credit score and clearing the debt associated with the property, and potentially more.
As for those trying to delay foreclosure, it’s your opportunity to educate them on the impact of bankruptcy in their daily lives. Plus, this tactic will only delay foreclosure for a short amount of time, and they still need to make payments to keep the house and make other accommodations.
Seven years of consequences or sell it to you and move on with their lives.
10. Financial Distressed Seller: “I’m going to let the bank foreclose.”
Whether the seller tried listing the property and failed, their forbearance agreement is ending soon, or they are planning to do what is known as a “strategic default,” the key here is to educate and position yourself as the best solution.
Educate them about the downsides to walking away, and how it is almost like signing up for seven years of bad luck in the form of credit.
You will pay cash to help settle what they owe or, if it is a short sale, severely minimize the impact, and take the problem property off their hands.
GoForClose Nurtures Home Sellers, Answering Their Objections
Our team of Internal Sales Associates (ISA) are trained in Real Estate Investing to answer all homeowner inquiries. We launch marketing campaigns through various channels, including text and phone calls, emails, direct mail, and PPC ads.
When leads respond, our ISAs carry on a conversation, addressing their questions and concerns, so motivated home sellers don’t have common objections by the time we provide a warm transfer to you and your sales team.
If you have questions or are curious to know more, request a free consultation below.
Wayne Hudson
Wayne Hudson has a background in sales and real estate - but with a passion for economics. He uses his knowledge of economics and real estate to help clients think strategically and make decisions to optimize their outcome.
As the company's business developer, Wayne works to help GoForClose grow.
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Wayne Hudsonhttps://www.goforclose.com/knowledge-base/author/opsgoforclose-com/
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Wayne Hudsonhttps://www.goforclose.com/knowledge-base/author/opsgoforclose-com/
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Wayne Hudsonhttps://www.goforclose.com/knowledge-base/author/opsgoforclose-com/
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Wayne Hudsonhttps://www.goforclose.com/knowledge-base/author/opsgoforclose-com/
