Posted by michaela-ATL on January 04, 2003 at 09:13:18:
Jim,
I like those answers you’ve given. I also don’t have a script. I just go in, ask questions, find out what the deal is, what they want etc and custom tayloer the solution to their need. I’m glad to see someone else doig that. I know a number of gurus give out scripts, but that’s just not me.
Sincerety always works out in the long run.
michaela
Handling seller objections - Posted by Jman
Posted by Jman on January 02, 2003 at 23:01:04:
Wouldnt it be great if everyone would post all the objections they ever got from sellers and ways to handle each objecton?
I have some objections that I have gotten and would like to see how others would handle them.here they are:
2.Im just going to file for bankruptcy
3.If i keep the loan in my name how do I know you will make the payments?
4.How could I ever get another home loan if this one is in my name still?
6.I do not want to keep the loan in my name period.
7.We are going to counter offer
8.Why dont you just make me an offer(over the phone)
9.We want to rent it back from you.
10.We need more money than that
We dont want to sell our house we want to save it.
What makes you different from every other investor that has knocked on my door?
13 I dont care about my credit.
Feel free to add your own and keep the list going for all to learn from.
Re: Handling seller objections - Posted by Jim FL
Posted by Jim FL on January 04, 2003 at 01:22:35:
Jman,
I like the way Ray handled this post.
He is right, if you bring up possible objections as part of your presentation, making your offer a solution to their problem that handles the issues, as well as a service to the seller, you’ll have less objections.
When I present an offer of buying a property subject to the existing financing, I even talk in detail about the due on sale clause and the risks involved.
This gets the issue up front and dealt with, also answering questions that could come up later, either on their own, or from a “Friend” or “lawyer”, or “RE agent relative”.
Anyway, I’ll try to see what I come up with for your list here.
I don’t really have a pat way I present things to sellers, or a script for saying things to them.
I just conversate with them and answer things as they arrise mostly.
So, here goes:
Your list:
“1. I want to think about it.”
REPLY:
That is fine. However, before I go, are there any questions, concerns or comments you have now? Was there something that did not make sense to you?
(If they are motivated, they should have more and you will then get a chance to talk to them and explain things.)
Should they say, “No”, chances are they are not motivated, and really do want some time to seek out other options.
Perhaps even shopping your offer.
So, before I leave them, telling them it is okay to “think it over”, I remind them that I am merely a phone call away for questions and hand them a business card. I will also remind them that I am busy, VERY busy, and that with the economy in a slight slump, I am limiting the number of houses I buy per month. There are others we are looking at, and we are almost to our quota for the month. Should they want to discuss our offer again, please don’t hesitate to call soon, because we’d hate to tell them in a week or so that we bought another house instead.
This works sometimes, and sometimes not, but it is true.
I don’t NEED to buy ANY house, the sellers NEED me to buy. Go in unattached to the outcome, with no emotion and convey that attitude. Sellers will respond better.
Next:
“2.Im just going to file for bankruptcy”
REPLY:
Why? Just out of curiosity, why on earth would you do that? You do realize that there are some heavy ramifications that go with that?
Don’t you ever want to own another house?
Depending on the deal, there might be some cash in it for them, even if down the road, so this might be reason enough to sell to you, instead of BK.
Frankly, when someone is set to file a BK, and has been advised to do so by an attorney, it is rare for me to get them to change their minds. They are resolved mostly at this point, and the BK was the solution the had in mind before calling me.
Next:
“3.If i keep the loan in my name how do I know you will make the payments?”
REPLY:
First, we have a legally binding agreement which outlines specifically what my obligations and yours are. You can also call the lender and verify that the payments are made.
Lastly, no offense, but this is just one house. My entore livelyhood, my business would certainly suffer if I allowed one house to go bad. I am not willing to jeopardize my entire business, my families bread and butter for one deal.
Next:
“4.How could I ever get another home loan if this one is in my name still?”
REPLY:
This depends on several factors.
Things like your credit? The new lender will look at that first.
Also, what your debt to income ratio is?
(This entire part really depends on what type of deal they sign with you)
Some lenders will credit the seller 75% of the payments being made on the deal to offset their debt to income ratio, while others will do 100%, depending on the type of deal.
If it is a L/O, they can show the contract to the new lender.
If it is a subject to deal, they have the agreement, and a HUD-1 closing statement if you use them.
Sometimes I’ve even written letters to lenders on behalf of sellers, telling the lender we were taking care of the loan now. This was usually with car loans and such.
Next:
“5. I dont want the loan to stay in my name for longer than X months/days”
REPLY:
Assuming here that the “X number days” is shorter than will work for your deal offer
I’d tell the seller that this is not something that makes good business sense for me. Should they want to sell the house and get the loan out of their name sooner than I can promise or commit to, I wish them luck. You may ask them at this point…“If I don’t buy your house, what are you going to do with it?”
Then sit there silent and let them think it over. This works well with TRULY motivated sellers, because they get that BLINDING GLIMPSE OF REALITY!
The deer in the headlights look if you will.
This usually leads to more talk, or a solid rejection of your offer altogether.
Next:
“6.I do not want to keep the loan in my name period.”
REPLY:
Well mr/mrs seller, the only way we can do that is to offer you $xx,xxx cash. I know this is WELL less than the value of the home and what you are asking, but it is what makes the best business sense for my company.
I may be able to refer you to a good local RE agent to assist with the sale if you don’t mind continuing to make payments, keep the house up, pay a hefty commission, closing costs, and MAYBE sell the house in a few months time.
Next:
“7.We are going to counter offer”
REPLY:
Okay, what is your offer?
Here is my fax, send me over what ever you come up with and I’ll look it over.
(What else can you do, this is negotiation.)
or
Ask them what else they have in mind. It could be something small, and a concession to get a good deal is just part of the game.
Next:
“8.Why dont you just make me an offer(over the phone”
REPLY:
NOTE, I’m a smart mouth sometimes.
Okay, $10 cash.
No, seriously, I’d love to be able to do that, but there is some information I need to gather, and I’ll need to inspect the house and see if it is something that qualifies for our programs.
When would be a good time to come and meet with you and the mrs/mr?
Next:
“9.We want to rent it back from you.”
REPLY:
We do not do that. We are not in the business of loaning money, or buying properties and renting back to our sellers. We make our profit by purchasing houses and reselling them. It is just not company policy to do this. Do you have any idea where you will move to when the bank takes the house back?
Any plans in motion regarding that yet?
(or the old, If I don’t buy your house, what are you going to do?)
Next:
“10.We need more money than that”
REPLY:
You said you need more money than that? What are you looking to buy? Is there something you need money for?
This will help you see why they want more, and perhaps give you some other way to get the deal done.
or
if this is just a cash offer and the seller wants more than makes sense for you to pay, tell them that.
“I’m sorry mr/mrs. seller, this is the best offer I can make you at the moment, it simply makes the most sense for us.”
Next:
“11. We dont want to sell our house we want to save it.”
REPLY:
I might be able to refer you to a good local mortgage broker. How is the rest of your credit? Is the house the only thing behind? If the payments were current, are you SURE you can keep up payments?
I’m in the business of buying houses, and this is what I can do for you. If what I offer makes sense to you great, and if you decide not to sell to me, that is fine too. There are plenty of other houses I can buy right now.
By the way, what if I don’t buy your house? What are your plans to save it?
Let them convince themselves that the offer of a solution you made is the best one.
Next:
“12. What makes you different from every other investor that has knocked on my door?”
REPLY:
I don’t know, I’ve not met them all. I understand there are plenty of people out there in the same business as me. I am making you an offer that will solve your problem, and if it works for you great.
If not, I don’t want to waste my time our yours.
I can tell you that this is my only business, this is ALL I do, so your house will get my utmost attention.
I’m in this for the long haul, as it supports my family.
What would make you agree to sell to me versus someone else? What are you looking for?
Next:
“13 I dont care about my credit.”
REPLY:
Well, you might not care about your cerdit now, but later on down the road that might change. If we can assist you in avoiding foreclosure, and make the payments on the loan, this will actually help your credit rating.
Anyway, these are off the cuff if you will.
I’m usually much more eloquent in person with sellers.
Just be sure when meeting with sellers to have a conversation. Don’t make it a long drawn out sales pitch. They will lose interest. Talk to the sellers, get to know them a little.
Let them see that you are sincere, and can provide a solution.
All while remaining emotionally unattached to the outcome.
Confidence, and sincerity win out more times than some fancy answers to objections.
Good luck,
Jim FL
Re: Handling seller objections - Posted by ray
Posted by ray on January 03, 2003 at 08:29:09:
I’ll leave the answers to the specific objections to those with more experience than I. But I learned from many years of outside sales experience that the best objection is the one the prospect never brings up. So here’s what I did:
I took the top 5-6 objections that I got almost everytime I did a presentation. Then I modified my presentation to actually “bring up the objection” without the prospect actually saying a word.
For example (using your #2)during the presentation I would say: “You know a lot of people think that filing bankruptcy will solve their problem”. But in reality they may actually be creating a bigger long term problem for themselves. With the bankruptcy staying on their record for seven years and the fact that the bankruptcy does not stop the foreclosure process it only delays it.
By you bringing up the objection you are not having to “overcome” their spoken objection.
Note that at this point the prospect has not said a word about bankruptcy… I brought it up.
Some people will still bring up an objection already “handled” and its very easy to say “I understand your question and that’s why I mentioned earlier that XXXXXX”.
For those objections not “pre-handled” I use the “feel, felt, found” method. I know this is a very effective tool because I have used it for years.
Here’s how it works: After your customer brings up an objection you unfortunately failed to “pre-handle” in your presentation (again using #2):
Prospect says “I think I’ll just declare bankrupcy”.
You say: I know exactly how you feel. (This puts you on their side in their mind and they mentally begin to let their guard down). I know a lot of others that felt the same way (now the prospect feels better because you gave credibility to their objection and admitted “others” have felt the same way). Then you close the objection with "But this is what they found, bankruptcy was not in their best interest in the long term when they found out that the bankruptcy stayed on their record for seven years and it didn’t even stop the foreclosure process, it only delayed it.
This “feel, felt, found” works great for me.
As a side note for those people in relationships just try the “feel, felt, found” method the next time your spouse or significant other brings up “an issue” for discussion.
Hope this helps.
Re: Handling seller objections - Posted by chan
Posted by chan on January 02, 2003 at 23:34:45:
“Mr.Seller [pause] obviously I have failed somewhere
what is it that we both can do so that you can have
a sale & I can have a purchase, maybe you can help
me craft this offer better.” – acting disappointed,
I learnt this one from Russ Whitney. This usually will
get you the bottom line.
Or you can just say it flat…“OK think about it you
got 24 hr” or “When you are ready give me a call”
Usually when you get this kind of respond the Seller
isn’t motivated enough…so move on!
2.Im just going to file for bankruptcy
Do you know that it will stay in your record for
at least 7 years?
Have you thought of a better way to solve your problem?
If I tell you that there is a way out of your
mess without filing for bankruptcy? What will you
do with the house?
3.If i keep the loan in my name how do I know you will make the payments?
If the seller is not motivated anything you say may
just waste your time.
If seller is motivated: “Let me ask you this, if we
don’t do business today and I walk out of that door…
what will you do with the house?” – most Seller will
say I DUNNO?!? – You say “Why don’t you try that and
when you are ready you give me a call”.
I got this one from RON LEGRAND…buy his course on
quick turning he covers most of this objection in
detail and they work.
4.How could I ever get another home loan if this one is in my name still?
6.I do not want to keep the loan in my name period.
7.We are going to counter offer
8.Why dont you just make me an offer(over the phone)
9.We want to rent it back from you.
10.We need more money than that
We dont want to sell our house we want to save it.
What makes you different from every other investor that has knocked on my door?
13 I dont care about my credit.
Tips: MSIS [Motivated Seller Is Simpler]
Re: Handling seller objections - Posted by Levi (CT)
Posted by Levi (CT) on January 02, 2003 at 23:20:19:
Jman,
Seller’s rejections really used to bother me. But recently I realized that a seller’s “NO” today can very likely be a “YES” 15-30 days from today. So if you think of it that way, and continue to make offers in the meantime you WILL find yourself with an abudance of deals waiting to be plucked!
Remember… Determination kills Rejection.
Good Investing
Levi (CT)