Handling Sales Objections(in real estate)

Vol 1 of 3

“Listing Objections”Tony Morrison

Handling Real estate objections

• The idea behind this power point is to give real estate agents ideas on how to tackle the many objections they have to face on a day to day basis when trying to convince people to list their house with them or buy a house through them.

• Each slide has an objection or an issue as a heading and comments below on how to respond to put the clients concerns to rest. There are often several different responses for similar situations.

• The examples which are often abbreviated due to space restrictions should not be memorised but should be put into your own words. The main idea is to understand the meaning behind each script.

“Why should I list with you?”

• “Because my goal is to get you the absolute best price• In the shortest possible period of time• With the very best terms and conditions• And with the least hassles possible.• That is why you should list with me.”

“Why should I list with you?” V2

• “Why did you call me in, in the first place?”

“Why should I list with you?”

• “Why did you call me in, in the first place?”• Hopefully the client will to some extent answer their own question

with their response to your question.• Showing knowledge of the market that can be backed up with

statistical evidence will help you here.• Make sure you know • Average days on market (yours vs industry)• Percentage of listings sold (yours vs industry)• List price to sales price ratio (yours vs industry)

“I haven’t made the decision on whom I shall list with yet”• “Are you going to make the decision on who you choose as an agent

on things that the agent can’t control like the price, or things that they can control like marketing and negotiating?”

Controllables

Marketing

Presentation

Negotiating

Fear of Loss

Time Frame

(You might think that agents can’t control time frame but if the price is right you are to a certain extent in control of the time frame.)

“What are your fees?”

• “Why is that your first question?”• “Are you really interested in the cheapest agent, or are you just

wanting the best value for money?• We are not the cheapest agent but would you be happy for me to tell

you why we are the best value for money?”

“I want the best price for my house and the lowest commission.”• “You want the best price for your property but you seem to be

preoccupied with getting the cheapest agent.• Do you really want the cheapest agent or the best negotiator who

gets you the most money in your back pocket?• As they don’t come in the same person.”

“The other agent said he would reduce his commission.”• “I won’t be reducing my fees to get your listing today, just like I won’t

be reducing your price to get a sale tomorrow. I fight for my commission just like I will fight for your price.”

“The other agent said he would reduce his commission.”• “If an agent is discounting today to get your listing there’s a strong

chance they will discount your price tomorrow for buyers to get the sale!

• I think you would be far better off hiring an Agent for their negotiation skills not their discounting mentality.”

You need to get owners to see how you can add value to the transaction

“If you reduce your fees we will go with you”• Agent - “If our fees were different who would you pick?” or • “If all things were equal who would you pick?• Seller – “We’d pick you.”• Agent – “Why?”• (The seller will then have no option but to tell you why you deserve more.)

• Agent – “So wouldn’t you expect there to be a small difference in fees based on that?”

“Ok, if you reduce your fee we’ll go with you”• “ What I’m hearing is that you have chosen me at the same fee as the

agents you don’t want to use. • Some agents choose to discount fees, we prefer to add value by

getting you a better price.”

(Most sellers know the price of everything and the value of nothing. You need to be able to demonstrate your value.)

“Ok, if you reduce your fee we’ll go with you”(When dealing with a seller who is in retail)• Agent – “ Can I ask you a question?”• Seller – “ Yes”• Agent – “What does a shop owner do if they have outdated, unpopular

stock that is un-saleable at retail price?”• Seller – “Have a sale and reduce the price”• Agent – “ Absolutely, and the same applies to an agent if they have

outdated, unpopular service that is un-saleable at full commission.”• “So it probably depends as to whether you want sale price service or the

more popular full price service?”• “What would you prefer?”

“ I like you but you are too expensive.”• “ You know Mr/Mrs Vendor, when we started our business we

decided it would be easier to explain our fees one time only than it would be to explain the quality of service forever.

• I think you will be very glad we made that decision.”

You can get quality work fast, but it won’t be cheapYou can get the work cheap and fast but it won’t be the best qualityYou can get good work cheap, but it will take a while

Good

Fast Cheap

Quality v PricePyramid

You can only Choose 2 out of 3

“I can’t justify your fees being so much higher than everyone else”• “I have had that said to me before, but never once someone has tried

our service. • Can I suggest you sign up today and if we don’t deliver the highest

level of service that we promise you can sit down on settlement and renegotiate the commission with us then.”

• (Once you have developed the relationship and as long as you have delivered the service you promised the conversation on commission rarely surfaces again. This keeps you as the agent very accountable and if you don’t deliver the service you then don’t deserve the full fee.)

“I’m not prepared to pay the fee you want.”• “I am sorry but I am so busy at the moment that I don’t have time to

take on anyone unless they are prepared to pay full commission.”

“Why are you so much more expensive than everyone else?” (lady)

• “If you are going out and you need to have your hair done will you go to the cheapest hairdresser or the best who makes your hair look amazing?”

“The decision on who to list with is going to be based purely on fees.”• Agent – “Do you have children?• Agent - “Without putting the health of your child into the same

category as selling your house if you have a sick child do you scan the yellow pages to find the cheapest doctor or is it more important for you to find a doctor that can make your child well again?

• Seller – “Obviously the latter of the two”• Agent – “So when selling a house is it more important to enlist a

cheap agent or an agent who solves your problem, i.e. great sale price, short time frame, no hassles?”

(Price is a one time thing, cost is something that has long standing consequences)

“I don’t want to hear a sales pitch, just tell me what you charge.”• “I’m glad you’ve asked about commission, I am getting to it but I’d

presume you wouldn’t commit to buying anything of any significance, whether it be a TV, a car, or whatever until you saw what it had to offer.

• As you’re basically buying my services, knowledge, systems, and marketing & negotiating skills I need to be able to show you these so you know what you’re getting for your money.

• Does that make sense?”

(You must always establish value & explain benefit before you talk commission.)

“I can’t tell you agent’s apart. You all seem the same to me.”• Agent-“Do you think that all doctors, dentists, lawyers, accountants etc.; have the

same ability? • Seller – No• Agent – Are you prepared to pay more for a good dentist who can stop your

tooth aching or a top accountant who can cut down your tax bill?• Seller – Yes• Agent - Would it be reasonable to assume that the same variation could also

apply to real estate agents then?• Seller – Possibly• Agent- Would it also be fair to assume that you’d expect to pay a bit more for a

good negotiator with greater ability to earn you more money?”

“I’ll list with you as long as you will do it for the same fees as the previous agent.”• “So am I right to understand that you are happy to pay me the same

fee as the agent who failed to sell your house?• I would suggest that the fee for success is probably worth more than

the fee for failure. • Does that seem reasonable?”

“Will you discount if it’s a quick sale?”• “Sorry we don’t discount for a quick sale, but likewise we don’t charge

more if we are useless and take forever. For us it’s about the quality of the result, not the length of time it took to get the result.”

Strategies which may help you to avoid dropping your fees • Superb listing presentation• Business based on referrals and repeat customers• Great testimonials• More enthusiasm than opposition• Having something they want – proof of buyers• Statistical evidence• Case Studies• Standing out / being different (Being memorable is more important than being the best)

(Remember you only have to sell the gap between your fee and the opposition’s fee and how you can bring value to that gap.)

Unless you can justify why

You are worth more commission, the choice of agent will come down to commission.You need to establish value and benefit before talking commissionNew business that is not referral based is often won in one of only two ways, Price or value adding.You need to work out what kind of agent you want to be. If commission is an issue your sellers just don’t see enough value in YOU at your price vs YOUR COMPETITOR at the price they charge.

“I have no idea what my house is worth, that is your job”• (BE CAREFUL as almost everyone has an idea of what their house is

worth.)• Always try to get the seller’s opinion before inspecting their home.• “I am going to give you an opinion on price when I inspect your house

tomorrow but so I do the correct research can you tell me should I be comparing houses in the $350 to $400,000 or $400 to $450,000 price range?”

• This is not to say that you are going to agree with their opinion on price but at least you are prepared and can develop a strategy to handle the situation if the price is unrealistic.

“I’ve had so many different opinions on price I’m not sure what price to set?”• “I know it is confusing to know what price to set for your home but

you really only have two options.• You can either price your house at a price that helps you sell• Or you can price your house at a price that helps your competitor sell• The choice is yours.”

“I have decided to go with the other agent as they feel they can get me $50,000 more than you offered.”

• Agent – “If it wasn’t for the fact that the other agent said they could get you $50,000 more than what I said would you be happy to list with me?”

• Seller – “Yes” (hopefully)

• Agent – “Why?”• Seller – (Reasons why they would prefer you – e.g. market share, knowledge, presentation,

reputation, negotiation skills etc.;)

• Agent – “So you are giving the weaker agent the harder task. Would not the stronger agent have the better chance of getting the higher price?”

(If answer was “No” above the next question is still “Why?”)

“Another agent said it was worth $700,000”• “May I look at the research he provided for you to establish that price

expectation?• As I much as I applaud his enthusiasm I find it advisable to base decisions on

factual research rather than someone’s opinion.• The properties we have been discussing will provide us with the most accurate

indication of what price we can expect to achieve.• The worst thing we could ever do with pricing is to under-price and sell too

cheaply. Likewise the next worst thing we could do is over price and scare lots of potential buyers away.

• We could see if someone is prepared to pay $700,000 by taking the price out of the equation and market the property without a price. If it is there we will get it, if it isn’t we haven’t scared any potential buyers away. How does that sound?”

“The other company felt very confident that they could achieve more than you.” • “That is great but the promise of a high price means nothing unless

there is a strategy and process to achieve that price. Did they explain how they would go about achieving this amazing price?

• Here is my strategy to maximise your price.”

Market to maximiseexposure, connect emotionally

Price to create Competition, sense of urgency, fear of loss

Great negotiationSkills to capitalise on set up process

“ I don’t care what you or the valuer say my house is worth I want my price.”• “I hear what you are saying but if you were offered two possible

treatments for a medical issue. One had a 95% chance of success and one only 5% and with possible side effects, what would you choose?”

“We need to leave room to negotiate”• “Yes we do. A realistic amount is around 5% on top of a property’s

indicated market value.• What you are suggesting is almost 20%• What we know is that the gap between a property’s market value and

asking price is absolutely vital to selling. If the asking price is too far above market value, then it will remain unsold.

• Buyers know value. They are out their researching and comparing what similar properties to yours are selling for. Over pricing acts as a deterrent to potential purchasers. We will run the risk of having no buyers to negotiate with.”

“We need to leave room to negotiate”• “If we leave too much room we won’t attract any buyers to negotiate

with.”

“We think we need to list with a bigger company”• “For us it is not about selling more homes than our competitors• It’s about selling homes for more than our competitors”

“We have decided to list with another agent as they seem to be more active in the area”• 1- “Activity can be misleading sometimes. Whereas we only have a

10% share of the listings in this area we have 20% of the sales. We have always been more about successful results, than activity.”*

• 2- “As we are a boutique agency we can never compete on size. We have half as many sales consultants as the biggest firm in our area but our sales results are about the same.”*

• 3- “Due to our size we will never be the most visibly successful office as we can’t compete on numbers. Where we can compete is on quality of service and successful results. Would you like to see some testimonials from some very happy clients?”

* This is just an example which would need to be backed up with statistical evidence.

“We have decided to list with another agent as they seem to be more active in the area”V2

• “I understand that another company has more listings than us in the area and that may seem appealing. What can happen though in that instance is that you become one of a number of properties that they can sell to a buyer where as with us your property is our total focus.

• All our buyers are pushed onto your house and are not shopped around a series of houses that the agent has listed until they find one they like.”

“We think we might list with a boutique agency as we might get lost amongst all your listings.”

• “I understand how you might feel that way but nothing is actually further than the truth.

• As we have so many more listings we also have so many more buyers and this means you naturally get more enquiries and therefore more attention.

• This usually leads to more competitive offers and multi offer situations which can only lead to you getting a better price.”

“I want to list openly with 3 or 4 other agents to maximise my chance of selling”• “By listing with 3 or 4 companies no one is guaranteed of getting paid

for their time and effort.• Would you work if there was no guarantee of getting paid?• Also, what sort of signal do you think this will send to the public with

your house being with so many different companies?• If you were a purchaser and wanted to buy an Open listed house

would you choose to negotiate with the weakest negotiator or the strongest?

• “What happens if your buyer realises which agent is the weakest negotiator?”

“I want to list openly with 3 or 4 other agents to maximise my chance of selling”(Continued)• “As buyers follow homes, not agents how do you feel this will get you

more buyers?• Do you think there would be some benefit in having one agent

knowing all the buyers, their capacity and being able to work them against one another?

• Are you interested in creating a competition between agents to get a quick sale or do you want someone working for you to get the best price?”

“We don’t want to miss out on any buyers and the more people we have working on our behalf the better.”

• “When selling a property employing many agencies is not advisable as you become everyone’s listing and nobody’s responsibility.

• All buyers will have the opportunity to view and purchase your home because of the promotional campaign we put in place for you. You won’t miss out on anyone.

• You need one person whom you can trust to keep you informed, negotiate on your behalf and consult with you regularly, implement your campaign and most importantly co-ordinate all interested buyers.”

“Why should I have to pay for advertising on top of commission?”• “You only pay the commission which is our fee upon the successful

completion of the sale of your property. This is our reward for a job well done. There is no charge at all if we can’t achieve a price you are happy to accept.

• Advertising is a separate thing though and you need to see it not as a cost, but as an investment in the tax free profits of your home.”

“Why should I have to pay for advertising on top of commission?”• “I’d be happy to pay for your advertising if you’d be happy for me to

set your price.”

“I just want one all inclusive bill, I don’t want a separate bill for advertising.”• “ I understand that it may be easier to know where you stand to have

one all inclusive fee but if you compare the situation to when you have work done on your car, the mechanic charges for parts and labour separately.

• Our marketing expenses are our parts, and our commission is our labour on settlement.

“Do I actually need marketing?”

• “No, not if you want to sell in an isolated environment with no competition.

• If you want the maximum price though, you need to sell in a competitive environment. Marketing will create that for you”

“Do I actually need to advertise in print?”• “No, but if you want to maximise your price then you do.• The internet sources the educated, knowledgeable buyer who knows

and understands market value• Print is more likely to source the passive, aspirational buyer who buys

with the heart.”

“Do I actually need to advertise in print?” • Do you want the first buyer (internet) or the best buyer?

“Does anyone really read newspapers anymore?”• “When buying a home the internet is your biggest friend as it is a

great research tool.• When selling though you don’t want the internet buyer as they are

too knowledgeable which can only harm your price.• We get less enquiries from the newspaper but they are usually better

quality.”

“Can we delay the marketing for a few weeks?”• “Yes, but do you think Apple or Coke would launch a new product

without telling anyone? • Your house is a new product to the market and we want to tell

everyone as soon as we can to maximise it’s impact.”

“I believe our house is very saleable so it probably doesn’t need any marketing.”• “You are right, your house is very saleable and I could probably sell it

to someone on my data base and get you a reasonable price if you are happy with that.

• We don’t want to sell in isolation though. We want to sell in a competitive environment to get the absolute best price and that is why we need to tell as many people as we can through a broad marketing campaign.”

“I believe our house is very saleable so it probably doesn’t need any marketing.” V2• “Its not always the best product that sells the most, it is usually the

product that is marketed the best.• There are far better take away food outlets than McDonalds but no

one sells more than them.• The same applies to houses, it is the best marketed homes, not

necessarily the best houses that sell for the most.”

“Why is it so important to be on the top of the search engines?”• Owner - “Surely as long as you are on the internet that is all that

matters?”• Agent – “Do you ever look past the first page or two when searching

on Google?• If you are not on the first page it is like putting a FOR SALE billboard

up in the forest and hoping for enquiry.”

“Can we pay for the advertising at the end? Other companies are happy for us to do that.”• “There are several reasons we like to have advertising paid in advance. • Firstly we like to keep the advertising component separate to the

commission, as the advertising payments are made to third party providers at the time they provide the service (the photographer, the website, the newspaper, the floor plan specialist etc.).

• Those businesses expect payment when their services are provided, which may only be a few days are your property is listed.

• Our commission is completely separate and you pay it to us when we have finished providing our service, that is, on the settlement of the sale of your property.

“Can we pay for the advertising at the end?”(Continued)• “If the property takes 6 to 8 weeks to sell and then another 6 to 8

weeks to settle it could be 3 to 4 months before we are paid our commission.

• Third party providers are not willing to wait 3 to 4 months for their payment.”

“Can’t you pay for the third party providers and we pay you back on settlement?”• “We have seen what can happen to clients when they have agreed to such

an arrangement with other agencies. • If the sales campaign is unsuccessful, and the property owner wishes to

change to our company, their first agency demands payment of the advertising bill that has been steadily growing over the course of a three month unsuccessful campaign.

• They are told that they must pay that advertising bill (which could be several thousand dollars by then) before they can be released from the listing authority that they signed.

• So they are basically tied to an agency which hasn’t been successful in selling their home because they can’t afford to pay the advertising bill to leave.”

“Can we pay for the advertising at the end? Other companies are happy for us to do that.”• “We’ve always found that agents who invest financially in the

marketing of the house they are selling tend to want to get their investment back, not necessarily get the best price.

• I think you would be best served to avoid that potential conflict of interest.”

“We just don’t have the money to pay for advertising in advance”• “What we could do to help you out would be …• If you pay for the advertising by credit card now we can take out the

payments in 3 or 4 equal instalments which means you don’t have to actually pay anything for at least 30 days and the final payment probably won’t come out for 120 days, by which time we should have your house sold.”

“The other company said they would pay for my advertising”• “My first question would be what are you actually getting in terms of

advertising? • My second point would be with anything free there is usually a catch.”

(The catch - Higher commission, small data base, poor negotiating skills, no market presence, inexperience etc.)

“Why should we pay for the advertising until we see if it actually works?”• “Would you delay paying your doctors bill until you saw if their

treatment/medicine worked?

“I don’t believe in advertising but I will just try one ad as you seem so insistent on it.”• “Doing just one ad may not be enough to find the best buyer who is

prepared to pay the best price with the best terms.• Sometimes when you go to a doctor you need a repeat script to solve

the problem. The same happens when trying to sell a house. Sometimes we need a follow up ad to solve the problem of a great result.”

“This huge advertising package you’ve recommended, is this for our benefit or yours?”

• “The marketing is purely for your benefit, any promotional benefits to myself are a by product of the fact that we need to make it very clear who the potential buyer needs to contact if they are interested.

• Marketing isn’t selective, people will be looking at your house, I just happen to be there but it’s not me that they are looking at.”

• “But you can’t sell a secret.”

“Do we have to put a sign up and splash it all over the internet and newspapers?”

• “We need to spread the net as wide as possible to secure the best buyer. That is what you want isn’t it?”

“Do we have to put a sign up and splash it all over the internet and newspapers?” v2

“Can you guarantee advertising will get us a result?”• “No I can’t but why would you invest $400 to insure your car worth

$10,000 and not spend $1500 to insure that we source every possible buyer and not undersell your family home which is your biggest asset?.”

“You can bring buyers through but I am not prepared to sign an authority.”• “If you don’t sign an authority I can’t get insurance to cover me if

someone takes a fall on your property. • If I can’t get insurance I simply can’t bring the buyers onto your

property.”

“Don’t talk to me about Auctions, they don’t work”• “I understand that seeing auctions being passed in gives the

impression that the process hasn’t worked. What you don’t ever see is that more often that not these auction properties are sold within a week or two of the auction date. This is still a success as that is still way less than the average days on market in this area.

• There are so many reasons that you should at least consider auction.• Firstly it is the only method of marketing which guarantees an

unconditional contract on your terms.• It stops buyers procrastinating and can get them emotionally involved

on the day which can lead to a higher price.

“Don’t talk to me about Auctions, they don’t work” (continued)

• Buyers with self imposed limits who may have discarded your home due to its price may inspect and if they fall in love with it get involved emotionally and pay more under auction conditions.

• There is no ceiling on the upper price and it gets potential buyers to negotiate with one another to win the right to buy your home instead of negotiating against you as with private treaty.

• It is also the main method of sales which brings in all segments of the market.

• The absolute worst thing that could happen would be that you find out what the market is prepared to pay a hell of a lot quicker.”

“We don’t want to put our home on the market until we’ve have found something we want to buy.”

• “I understand how you would be nervous to put your house on the market until you have found something you want to buy but when you eventually find something you want to buy you will end up paying more for the house as you are not in a strong position to negotiate if you have to sell first.

• Then you will also probably end up accepting less on your house as the time frame you have to sell will put pressure on you to accept less than what you want.

• If you pay $10,000/$20,000 too much because you are not in a position to negotiate and then you sell for $10,000/$20,000 less as you have run out of time on your contract it can make a big difference to you financially.

• That substantial saving could pay for a lot of rent if you have to sell before you have found somewhere to go.”

“We don’t want to put our home on the market until we’ve have found something we want to buy.”

• “You can achieve a much better deal buying with cash than you can with credit.”

“I’d save a lot of money by selling privately.”• “I know that is what you think but it is rarely the case.• It is also almost impossible to get honest feedback when selling privately as

no buyer will tell you the truth as they don’t want to hurt your feelings. • It is also hard to follow up buyers without looking desperate.• Many times an owners emotional attachment to their home can see them

rejecting offers which they live to regret.• Agents have access to more marketing avenues and can get better

advertising rates which can lead to greater competition.• Many buyers also simply feel more comfortable with a middle man.• And lastly private buyers are still going to discount your price anyway.”

Next time you get frustrated with unrealistic buyers and sellers• Remember if owners were to ask a reasonable price• And purchasers were prepared to make reasonable offers we would

all be out of a job.

Check out other power points on www.slideshare.net by Tony Morrison