A Compilation of Common Objections for Expireds, FSBOs, and Pre-Foreclosures

I got an e-mail back from a gal requesting that I send her the common objections again. So today, I am sending you a compilation of common objections and what you have to overcome to list Expired Listings, Pre-Foreclosures, and FSBOs. Each of these listing leads has different hot buttons. They also have different objections as to why they won’t list with you. Or, list with you versus another agent.

Expireds want to know for sure that you can actually get the home sold.

FSBOs want to put the most money in their pocket possible. Why are they going FSBO? To Save the commission, or so they think.

Pre-foreclosures finally decide to sell when they realize they can’t keep the home and they are going to lose it either way. They want to put as much of their equity in their pocket as possible.

How to Handle the Top Expired Objections.

1. We are going to re-list with the same agent we had the home listed with.

Some people ask mean, in your face questions like “why would you do that? They didn’t sell your house did they?”

A better way to handle this objection is to ask them sincerely, “What is causing you to consider re-listing with them?” Then you can get an objection that you can handle without insulting the seller. They may respond “We feel like we owe them the listing because of all the work they did and the advertising they paid for.”

You can reply and point out that the agent probably got calls from other buyers and sellers from their home. They got calls from the sign, the listing on Realtor.com, and also on the ads they ran. “They probably already got paid back for the work they did for you, don’t you think?” When they say yes, then say “You need to do what’s best for you, right? From what I’ve shown you, do you think I can get the home sold?” Great, then let’s get started.

2. Why are you telling me such a low price?

The problem is that you haven’t proved to them that your asking price is reasonable. Go over the comps and actives again. First, show them 3 other completely unrelated listings for sale from your MLS. Show them the best price home, then one 5-10% overpriced, and finally a listing 20-25% overpriced. Ask them which of those homes they would buy based on what you get for your money.

Then, show them their home up against the competition and ask them which they would buy. Another method is to have them go out and drive past the other comparable homes on the market. This works well to show them that theirs is not the only nice home on the market.

3. You haven’t shown my house to any buyers.

I respond by saying, “Yes that’s right. There is a reason why. When I work with a seller, I make a commitment to help them sell their home. That means that I put all of my energy working to sell the listings of the sellers I am working with. And, your home wasn’t one of those, was it?”

This usually does the trick. Think about it. If a buyer calls on a sign and is interested in that property, are you going to show that buyer other listings? No, because you want them to buy your listing. Not only do you make more money, but you do the job you committed to doing for that seller. You have to show the seller this. Your job is to sell your own listings and only other listings when you buyer doesn’t like your own.

How to Handle the Pre-Foreclosure Objections.

The biggest reason a Pre-Foreclosure won’t list with you is because they want to stay in the home. You will get the listing if you happen to be the person in front of them when they do decide to sell. There are so many Pre-Foreclosures out there, and enough of them are deciding to sell at different times that it makes sense to contact them. I have found that anywhere from 10-20% are open to listing at any given time.

Here in Florida the foreclosure process takes 4-6 months, and sometimes as much as a year. I haven’t seen a foreclosure case go faster than 4 months. When I first stared, I got a list of homeowners in foreclosure and started mailing and calling them. I was surprised at how easy it was to list these properties.

Alex Brown called me from a letter I sent him in the mail. I spent over two days writing and re-writing that letter. He called me, I listed the house, and it sold a few months later. The interesting thing is that he was calling me to reduce the price. This was before I knew the importance of price reductions. Another Pre-Foreclosure I listed and sold was Frank McCombs.

Whenever I drive to or from work I will stop by and knock on the door of a foreclosure, expired, or other lead. I knocked on his door because his house was in foreclosure. He didn’t want to sell his house, but he put his mother’s 10 acres on the market. His parents lived with him, and they were going to give him the money to catch up on the payments of his house. We priced the 10 acres very competitively and it sold two weeks later to a buyer off of Realtor.com.

Here is what I have found works best to list the foreclosures. I mail them one week, call them a few days later, and then mail and call again. I got started listing these properties in 2006, when the market first started to slow down. Sellers were reluctant to reduce their price. I had listing of two side by side vacant 5 acre lots that the seller wouldn’t even answer my calls about reducing the price. I knew that I had to find sellers more reasonable and willing to price their home to sell.

How to Handle the Top FSBO Objections

A FSBO has different reasons they don't want to list, versus an expired. The reason an Expireds may not list with you is that they are afraid of being locked into a contract for 6 months. They fear they'll lose 6 months. Contrast this with the FSBO. They don't want to list because they want to put the most money in their pocket possible. Why are they going FSBO? To Save the commission, or so they think.

When you contact or present to a FSBO, everything you do needs to hit their hot button. And that is they want the most money possible. The most effective method I have learned on listing FSBOs is what I call the Smart Seller Program. It's basically an Exclusive Representation Listing with a clause that says if the FSBO sells the house themselves, they don't have to pay a commission.

I have used this to list FSBOs successfully. Here's the logic behind it. A FSBO thinks that a buyer may stumble upon their house and buy it. And, the FSBO will put an extra $10,000 in their pocket. They don't want to list, because they don't want to lose that chance of saving money. Once you list the house, the stop trying to market or sell it within a week or less. Then, it becomes a normal listing just like any other. That's why I use this strategy to list FSBOs. Rather than fighting human nature, I work with it, and profit. Let me give you a few examples of FSBOs I listed using this method.

Brandon Sach was a young guy in college and had his townhouse FSBO. I called him up and he was asking $110,000. He had had a few buyers, but they all thought it was overpriced. That's because they weren't real buyers. I told him I could get $120,000 which would net him the same amount of money, and leave him the option to sell it himself. I listed it for $120,000 (at a 7% commission by the way) and it sold a few weeks later. He pocketed more money, because he got the real, motivated buyers to look at his place. here's another FSBO I listed using this strategy.

Bob Luman had a vacant 5 acre lot for sale. I called him the day after the ad had started running. He was totally fine to list it with an agent. In fact, his brother was an agent in another state. He was also a salesperson himself, so he wasn't against an agent earning a commission. So, he didn't have anything against agents. But, he wanted to at least give FSBO a shot for a few weeks. He told me to call him a few weeks later after he had tried FSBO. I however wasn't open to letting him get called by every other agent in town over the next few weeks. I wanted the listing that day, not a 25% chance at getting it in a few weeks. Here's what happened.

I offered to list it, and give him the option to sell it himself and pay no commission. I reasoned that since his lot was at the end of a road where it would never get any drive by traffic, he wouldn't get much activity from a sign. And, he might as well get more exposure to the buyers working with agents in the meantime. I met him and his wife the next day and listed the lot. It sold 4-5 months later and I got a nice check. And, I didn't let another agent find their way in and get the listing from me.

FSBOs are not a huge market today, but they are still out there. Some are motivated and will have list with an agent. They will be motivated sellers because of a job transfer or other reason. I've included the letters I send to FSBOs and the agreement I used to list the property using this method in my Motivated Seller Gold Mine System.

How to Answer These Objections Before They Come Up In Your Presentation

When you contact or present everything you do needs to hit the hot button of your prospect. Here are a few of the items I do to demonstrate to the expired that I can get their home sold. I have included samples off all of this with my Motivated Seller Gold Mine System.

1. Set them up to listen to me. First, I demonstrate how homes are depreciating here in our local market. The goal is to get them to reality, and also convince them that they don’t need just any agent to sell their home. Some of the things I go over is: how much harder it is for buyers to get financing, the negativity of the media, the drag that the rest of the economy and the drag it has on the housing market, and all the foreclosures their home will have to compete with.

In the meantime I give them the disadvantages of renting out the home, and “waiting” until the market comes back. I want them to sell now. This bout of bad news turns their brain on, and they start thinking about how they can work with the bad circumstances. Guess who’s there to help them out? Me. At that point I go into what I can do to get their home sold.

2. Track Record. Show them a list of homes I have sold. I put this all in a Word Document that I print out and go over with them on the presentation.

3. Show them my marketing plan that I will follow to market and sell their home.

4. How I get buyers. I show them that I do have a list of buyers, and that I will be marketing their home to those buyers.

5. Testimonials. If a picture is worth a thousand words, then a testimonial is worth a thousand of my words. I can say all I want about how great I am, but what a satisfied customer says carries a lot more weight.

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Ben & Chris Curry The Short Sale Agent's Advocate