Objection Handlers

Your phone ringing off the hook is usually a very good problem to have. Unless you lack the experience to move through your calls quickly. Quite a few of my clients have been experiencing this problem lately with the Spring Fever that precedes the Summer Sell Off Madness.

Having answered this very same question several times this week, I thought I’d write a post on it to refer people to. There are many objections a potential seller may raise, but these are far and away the most common.

But before reading further, take a moment to absorb and become comfortable with these facts:

• Not every call is a lead
• not every lead is a deal
• the phone WILL ring again

Once you internalize that then dealing with these objections becomes pretty straight forward:

How did you get my name :

• (glad you asked) Public records. When I see a house or neighborhood that interests me I do a little research at the county appraisers office. If I like what I see, I send a letter. (then back to the script) So tell me, do you have a house for sale?
• (nonchalantly…no biggie) I haven’t done a good job this year of keeping track because a friend of mine helps manage all of my mail. Would you like me to have him call you? No? (then back to the script) So tell me, do you have a house for sale?
• (humor) I’m sorry Bob, I could tell you but then my secret would be out…..(then back to the script) But please tell me, would it keep you from selling me your house?

Not interested

• Ahh, I see. Well I do thank you for your ti….oh, wait a minute….did you mean not interested in selling or not interested in making some money by telling me who might be? (ALWAYS ask for the referral. If you don’t ask, you won’t get it. Marketing is cumulative; turn these folks into your bird dogs)

Take me off your list

• Yessir, I’d be glad to. Have you had a lot of interest in the house? A lot of mail? Uh huh, I see….so I guess you wouldn’t be interested in making $500 for putting me in touch with folks who may be needing to sell in your neighborhood?

Listed for sale in MLS

• How long has it been listed? And for what price? Did you start there or was it higher originally? Really? Well Bob your house sounds like something we’d be interested in buying and if we did, we could close quickly, in a matter of days.Unfortunately, we don’t buy listed properties. When is your listing set to expire? Well, I’ll be glad to put you into our system and give you a call back after that date if you’d like. Or if something changes and you decide to withdraw the listing, give us a call ok?

Make me an offer.

• How about a dollar? No? What’s your counter?
• I simply have too many prospects to work with to waste time on those I can’t buy. If you’ll tell me what you’re asking, I’ll know quickly if we can do business. Is that fair?
• Well, I’d love to, you just haven’t given me anything to work with. A blind offer would be pretty meaningless don’t you think? You have a number in mind. You know I’m an investor. I can’t make an offer until I see the houses. I’d love to meet with you. But I need to know what’s the best you can do if I paid you all cash, took the houses “as is” and closed on any date you choose. What ‘s your bottom line? Give me a reason to get involved. What would be the least you could consider?”

That’s all there is to it…

Of course, this isn’t exhaustive, but it gives you an idea of the different directions you can go in. Did you notice a commonality? Asking a question puts you back in control of the conversation. If no other question presents itself, “does that sound fair?” will usually work. Ultimately, you will want to ask a question that leads directly back into the script.

When does Subject to make sense?

The problem is real, I see it all the time. You want to sell your house, but don’t have the cash for simple repair let alone improvements. Or you think: “I need to sell my house fast, but how can I afford closing costs?” I’ve talked to many sellers who were told point blank by Realtors that because they have no equity, they’ll need to bring money to closing. But there is another way….

Imagine if you could only sell your house as is, with no fix up at all; sell your house as is with no closing costs. Best yet, selling your house as is fast, Without spending a dime. It can be done. I’m going to show you how it worked for one of my clients In Arlington, TX just this last month.

Sometimes, you can’t truly appreciate the gravity of a situation with out a real world example. That’s why I’d like to tell you about Johnathan. Johnathan had a house that was burning a hole in his pocketbook. He wanted to know: “can I sell my house as is?” “Of course”, I told him, “we can buy any house in any condition”. You know the drill.

After examining the house and neighborhood, I determined that Johnathan only had one option that would keep his money in his own wallet. He had some equity. Many folks with some equity believe they should be able to realize that equity at closing. But it just doesn’t work that way. There are closing costs to pay, Realtor commissions and so on. That eats up your equity fast. Here’s how I presented problem and solution to Johnathan:

My “Dear John” letter

Dear Jonathan,

When I started totaling up the repair work that needs done at 123 Main St, I was a little surprised; it came out to a bit more than I was thinking at first. I’m including that estimate with this package. Also, after driving the area, I came home and ran my comps again making sure to stay in the neighborhood.

My appraisal puts the After Repaired (market) Value, or ARV, at $108,000. My repair estimate came to about $9,000 to put the property in top shape. That included basic cosmetics like carpet and paint, as well as a bit of foundation work, and tracking down the source of water leaks.

I don’t think you’re in a position to accept a cash offer. In order for me to make a profit, I have to take a discount for cash as well as the speed and ease of transaction. Foreclosures usually sell from 30 to 50 cents on the dollar; most wholesalers offer about 65. I usually go about 70. So, 108k ARV X 70%= $75,600 – 9000 (repairs)= $66,600. That’s the best I could do, and I think that would leave you bringing money to the table.

And as I look over your other options, I’m seeing the same thing. You could put a minimum of 5k into fix up, then list on the market trying to get full price. But after the fix up costs, there’s Realtor commissions (6.5k), Mortgage and holding costs for a minimum of 6 months (5K or more), then closing costs (2K). So full price of 108K minus close to 17k (minimum!) in costs, and you’re still bringing money to the table.

You could put it on the market “as is” and get probably 100k. Minus Realtor, holding and closing costs (around 13k minimum I figure), and again you’re bringing money to the table. There is simply not enough equity in the property for you to win at closing. Unless…

The way I see it, the best way for you to get the most out of this property is to either rent it, and take on the responsibility, risk and headache of landlording, or simply to sell for what you owe and allow a competent individual to take over your payments. That means you sell in the 90k range with no costs. You wont have to do another thing or spend another dime. It could be done in as little as 10 days.

Sincerely,

Jerry Puckett
Managing Partner
New Refined Images LLC 

972-790-6848 fax

The happy ending…

When he was able to clearly see what his options were, he was able to grasp the sense of the solution. The confused mind always says no. My job as a professional in the Real Estate business is to communicate your options clearly, and Identify the best ones.

In this case, and perhaps in yours also, owner financing (also known as “subject to”, or simply “sub to”) turned out not just to be the best bet, but the only one that made sense. Johnathan was able to sell quickly (within 4 weeks), to sell as is, paid no closing costs, and got instant debt relief. I can tell you there is A LOT of paperwork involved, but that is my problem and not yours. There is also quite a lot of legal mumbo jumbo, but thank goodness you will have me to decipher and interpret.

Is this really a Marketing Tip or Trick?

I got to have a brand new experience earlier this week….my very first podcast. I got a surprise invitation from Brandon Turner over at BiggerPockets.com last week, and you could have knocked me over with a feather. What an honor….Social Media is an excellent vehicle for marketing.

I have learned so much from BiggerPockets over the years and try to give back as much as I can. I spend some time there every day engaging the community and answering questions. This podcast was a great opportunity to share some knowledge and experience with anyone who cares to listen.

That was actually my inspiration for this blog. I get a lot of private messages from BP, and many many emails from clients with questions. Most of those are recuring themes that I can go in depth with. That’s what I intend to bring here over the course of time. I could think of no better start than to link to this podcast, and let you hear what I have to say.

Listen to the Podcast Here >>>>>> Biggerpockets.com/show 021