3 Main Objections:
2.Desire for More Money
3.Delay Tactics (Need to speak with “Spouse, Family, etc” before decision
How to Overcome the Objections:
1.Build a detailed Avatar – In business, and avatar is “Who is your ideal customer”
–Understand their wants vs needs.
–List every possible objection they might bring up
–Have a “SOLUTION” for every objection
–Ask open-ended questions.
OBJECTION 1: SELLER INDECISION: Concerned where they are going to move.
–Seller with large equity at close:
Offer them a Seller’s Temporary Leaseback
, which is where you “lease” the
property back to the seller on a temporary basis (Ex. 14 days) to allow more time for
moveout (Temporary is KEY). Retain a large portion of the seller’s equity if you do a
-For example, if they are getting $35K in equity at close, give them only $4K at close, only
give them the remaining $31K once they have completely moved out.
–Put a clause in the special provisions
– In the event that you the seller fails to move
out on time, they must pay a per diem rent, the buyer has the right to use the retained
capital in escrow to pay for eviction costs, damage, legal suites incurred, removal of items
left behind. Every day they are in the house beyond the move out date, you charge them
per diem rent.
Price the per diem slightly higher than a hotel in the area,
so the motivation is to get them out of the property. When equity is withheld, and the seller
states they need money to move, offer to pay for the move, but only out of their equity. Do
not give them the money directly.
–Seller with no equity at close:
Ask if they have anyone they can stay with until you bounce back.
Wording is important. Stating “until you bounce back” instill confidence in the seller, that
they will be able to recover. Do you have any income at all right now? They could rent a
decent RV and rent and RV Lot. If there are no solutions regarding money. Are they
employed? If not, you may need to have If no money coming in, such as no employment,
you may need to have the conversation about the importance of the seller getting a job –
OBJECTION 2: DESIRE FOR MORE MONEY
– The Left Brain Seller: Data Driven
-Use data to support your price, if the seller is data driven, ask them to provide you data to
support their price. Go over the repair costs with the seller, have the seller write down the
repair costs, they feel in control and the actual repair costs become a reality.
Seller Net sheet:
All the fees the seller has and all the fees the buyer has. On the net sheet,
use the seller’s numbers on repair costs, etc. Or, if you know you can get it at a lower price,
tell the seller you can get it for less, so that if they understate a price for a repair, you can
negotiate the price down.
-The “What If” Close:
-Ask the seller, “If I could give you, say $20K more than you are asking for and close in one
week, would you sign right now?” Typically, they will say yes. The investor’s response
illustrates why both parties must come to an agreement. “As they buyer, I could not give
you that much for your house because that does not make good business since. I would go
out of business, my spouse would divorce me, etc. I would love to pay only $1 for your
house, but you, the seller, would not do that. So, what is the number that makes since for
– The Right Brain Seller: Emotional, Sentiment
-Connect to their emotional appeal. For example, seller had memories around the magnolia
tree in the front yard, Daniel cut a clipping from it and planted it, which showed that he
cared about the seller’s concerns
-The Intractable Seller: Determined to List with an Agent
Have the seller list with a realtor, preferably on your team, when the house does not sell in
90 days approach the seller again.
OBJECTION # 3: DELAY TACTICS “I NEED TO TALK TO MY SPOUSE, FAMILY, ETC”
-Before the appointment, ask the seller, is everyone who needs to be there to sign off on the
transaction going to be at the appointment. If not, ask if you can do a live call with the all
the parties necessary. If you are at the appointment and they state that they need to speak
with their spouse, family tell them to call that person, while you step out and speak to your
partners to confirm that you did not offer too much for the property. Create a loss aversion
scenario, where the seller is afraid that the offer
-Final Thought – LEARN TO NEGOTIATE
-We negotiate every decision, every day. Learn as much as you can about negotiation