The Science of Flipping - Episode 140: Overcoming Seller Objections – Real Estate Tips

Episode Date: March 8, 2019

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Welcome to the Science of Flipping podcast. I'm your host, Justin Colby. Yo, yo, what is up, everybody? What is up? Welcome back to another episode of the Science of Flipping. I've been doing this now for many, many years, and this is our 140th something episode. It might even be our 140th episode on the dot, but I want to say thank you for all my loyal listeners. I appreciate you guys. This episode is going to be off the hook, so stay tuned. I'll keep it as short as I can, but it's all about seller objections and how to overcome them, how to rebut those objections

when you're talking to a seller. But also if you guys have been listening to me for a while, I'm going to give away some really special stuff. So I want you to make sure you are following me on Instagram, the Justin Colby, as well as Facebook, the Justin Colby. I'm giving away incredible content incredible giveaways make sure you are following me on those two platforms and YouTube Justin Colby VP

make sure you're watching those videos all of this is free by the way so just like this podcast Instagram the Justin Colby Facebook the Justin Colby in YouTube Justin Colby. Facebook, the Justin Colby. And YouTube, Justin Colby VP. Make sure you're following. Make sure you're subscribing. Make sure you're liking and engaging as I will be giving away some awesome stuff on there. Now, let's jump right in. Let's talk about seller objections. And I'm going to go over some of the biggest objections, the few that you hear all the time. And I'm going to give you some tips and tricks to overcome these objections. First and foremost, the common thread is let me think about it. That is the most common objection. So the seller says, well, let's take a step back here. Let me put it in reverse and just simply say, okay, the scenario is this. You've gotten to the kitchen table with the seller

and you've given the offer and they seem to like the number. So let's start there. You're at the kitchen table. The seller likes the offer. They like the number. And the next words out of their mouth is, well, Justin, let me think about it.

So you say, Mr. Seller, what do you have to think about it? Seller will say, well, you know, I just got to think about whether I really want to sell this. And then you'll say, well, Mr. Seller, listen, sounds like we've agreed on the number, correct? Yeah, we've agreed on the number. Okay. Well, let me ask you, do you fully understand the process of selling your home? Have I done a good enough job explaining to you how after we sign this agreement, you will then, or I will then go open up escrow at the escrow office that the escrow officer will call your bank. You do not have to call your bank and they will call your bank and get the payoff and any other liens that may or may not even be

on their home. Do you understand the whole process of what takes place? You actually will not have to do anything from this moment forward all the way up until we sign and close the deal. Do you understand that? Right? Well, yeah. Okay, Mr. Seller. Now, we seem to agree on price. You're telling me you understand the whole process. You understand that I'll be closing in 30 days,

that I have a two-week inspection, that the escrow office handles all of the paperwork and my earnest money deposit and your payoff with the bank. You don't have to do anything. That you also understand. Do you understand what the paperwork and my earnest money deposit and your payoff with the bank. You don't have to do anything. That you also understand. Do you understand what the paperwork says? Well, this may be a little bit of the tricky part. My point here is you need to do a very thorough job reviewing the paperwork with the seller. So then you go in and you review line by line the paperwork with the seller. And the seller will still say, well, I still need to think

about it, Justin. And you will say, well, let me ask you one more question. Do you like me or do you trust me? Have I said or done anything to make you not like me or said or done anything wrong or said or did anything you dislike or simply that you no longer trust me? Have I said anything at all that you can dislike me, not trust me? and then be quiet. Here's what is ultimately happening. What you are doing is you are peeling back the layers of the onion. You are asking these questions because that's really all there is. Once you guys agreed upon price, once you guys then understood the flow of the escrow and closing and inspection and how that, and you go over that. Once you go over the paperwork again, and then you make sure he says, no, I like you and I trust you. There is nothing else. So then you just be quiet. Do you like or trust me? Yes.

And then the real objection will come up, whatever is because then you say well if all this fits why don't we go ahead and get this done today and there is where the real objection will come up that's when you'll hear something like well I really still need to think about it because I got to give it to my sister because her and I both inherited this home. Well, that would have been nice to know at the beginning of this that you and your sister both own this home, right? Or whatever it may be, right? Well, I've still really got to think about it because my taxes, whatever, or whatever reason that you're trying to find their true pain. So that is the first one when they say, you know, I need to think about it. That's how I overcome that objection.

You know, overcome the objection is, I need to present it to my lawyer or CPA. Hey, Mr. Seller, that's not a problem. Let me just make sure we're, you know, on the same page. You agree to the price? Yes, I agree to the price. You to the price? Yes, I agree to the price. You understand the process? Yes, I understand the process. You understand the paperwork? Yes, I understand the paperwork. You seem to like and trust me. I like and trust you.

Yes, yes, yes. Okay, so why don't we do this? I'm going to write up the offer contingent upon your lawyer or CPA reviewing it. And Mr. Seller, how long do you think that'll take? A day, two max? Well, maybe it might take them a couple of days longer. Okay. I'll write a contingent upon your lawyer and or CPA, whoever it may be, approving this. So right here, I'll add an addendum that this is contingent upon CPA reviewing the contract. And go ahead and sign here, I'll add an addendum that this is contingent upon CPA reviewing the contract and go ahead and sign here, which means nothing is official until that is done and we are a green light. Go ahead and sign here, Mr. Seller. So I'll just simply write in that addendum, right? The next, you know, highest objection will be, I need to discuss it with my husband or wife or spouse,

or even they are upfront with you about their brother and sister and in-laws or whatever maybe someone else is involved in the decision making. So first of all, you should not ever get this at the end because you actually should be talking about this on the front end. When you're initially talking to the seller, you need to be talking to them. Hey, is this a decision your wife needs to be involved in? Does your husband need to be involved in? Is there any other family members that needs to be involved in this decision?

Because we're getting down this path now that it looks like I'm going to be presenting you an offer. So I just want to make sure all of the decision-making parties are here. You should have already said this on the front end, which is part of the script. So if you are getting this on the back end, you got to rethink about how you're handling the front end because that needs to be handled, right? So you say, okay, Mr. Seller,

I can understand you need to discuss your wife. Can we get her on the phone right now? There's no reason to wait, right? Yes, if they're married and even more importantly, if they both need to sign, they both have to have this discussion. So Mr. Seller, is there a way we can get on the phone right now? Because there's no point in her asking you questions that you might not have the answer to if I'm here right now. So let's get her on the phone. That's one way to handle that. Another way to handle it is, well, what specifically do you guys need to discuss? Because we should all be discussing it because I am very experienced at this. And more often than not, that spouse has questions that the other spouse can't answer.

It's better for me to be on the line and or in front of you guys so I can answer those questions. Oh, well, yeah. You know, set a time. Again, the point being is you need to overcome it by simply saying, right now, let's get them on the phone. Right now, I'll wait here until they get home from lunch. I'll wait here until they get home from work. Wherever that has to be. I want to get this decision done today, right? So if that is the case, then again, force the issue to get it done today. Get them on the phone, sit there and wait until they get home from work or lunch or whatever. And or you write an agreement again, simply staying contingent upon spousal approval. Now, at least it's in paperwork. The idea here is if you can't get them pen to paper because literally the spouse has to approve it

and sign it anyways, you still get the husband to sign. And you say, this is contingent upon spousal approval. And then you can at least have that obligatory now, their, you know, obligatory next meeting, right? Because now it's all based around that. And so again, the last I'll mention here is in my market, and I'm only mentioning a few here because these are predominantly the largest ones, right? I need to think about it. I need to talk to my husband, wife, or spouse. Or I have another investor coming by, or even in my market, Zillow, Opendoor, Offerpad, and all the other hedge funds that are here. Well, they gave me a higher offer, but I just don't know because there's fees involved in all of that stuff. So here's two things I want to mention, two different objections. One, when you present

the offer, you need to be making sure that the seller is actually understanding what the numbers look like. If they are going to list it, here's what you can get listing it. You can get $200,000 minus 6% from realtor commissions minus 1% to 2% closing costs minus 1% to 2% of kind of repairs that you're probably going to have to do based around your buyers. And really, if you list it at $200,000, you're going to get roughly 94% or 92% of list price right now in this current market. So here's your end number. Well, that's the same number I'm giving you, Mr. Seller, and I can close in seven days, right? That has to be done on the presentation side of this. Now, if you've already done that and they say, well, I want to talk with another investor. Here's the secret ninja move, right? Mr. Investor,

or I'm sorry, Mr. Seller, I understand you want to do your best to get everyone's offer in and pick the best one for you. I get that. But A, I only have so much money allotted and I'm going to go see three or four other homes between now and the end of the day tomorrow. And if I like one, I'm going to buy one. And this is a real offer. This is in front of you. I like your home. I want to buy your home. So why won't you take this? Well, I want to make sure I get the best offer. Well, again, I can appreciate that. But what if you missed the best offer because you wanted to see the other ones? We basically agreed that this is right where you wanted to be. Do you think any other investor is going to

somehow give you an extra 30, 40, 50 grand? No. So what's really stopping you here? Because you might miss the best offer if you want to play this game. So I'm playing fear of loss in there. I'm playing, you know, fear of loss. It's a little bit uh, what am I? I'm blanking on the word. Um, oh man. Anyways, fear loss. Uh, I don't know why I'm blanking on the word. So you're playing that with them. Now, the next part is, um, if you do have some of these other offers, I was just talking to a seller that came through on PPC and he literally had three offers from Zillow, OfferPad and OpenDoor. And he said, all three of them are above your offer. And then I, again, redid the numbers. Hey, usually they do 10% to close. They're going to make you

pay for the closing costs. And he said, they broke those numbers down for me and they're still above your offer. And I said, okay, now what I want to do is I want to play the all shock, small, local investor. And I want to be service oriented. That's the only way you can beat those guys, right? Is they like me better than they like the 800 pound gorilla that they don't know that's a big company. That's who they are, right? They don't care. I care, Mr. Seller. So let me help you. I can help you move. I can take care of helping you find another place to move. I can deal with your furniture. You can leave everything there. There are no closing costs. I pay for everything. Let's

keep this simple, Mr. Seller. Let me be your buyer, right? And so that's how I overcome those big boys. Yes, they offer more, but I become service oriented. I all shucks them. I become very, very likable, which I'm doing the whole time. But I'm making sure that they understand if you're dealing with me, you're dealing with the person. If you're dealing with them, you're dealing with the monster, a machine, a factory, a business that is bigger than they don't care. They're heartless. They're cold. Right. So, um, and lastly, I kind of mentioned this, you know, one of the last ones is, um, you know, I think I'm going to get more money if I list it. And the reason why I don't bring this up is, is just a straight objection is because yes, you might hear it. Um, you know, they might say, oh, my friend who's a realtor says I could sell it for 300,000 or, you know, I think I can get more money if I list it than what you're offering me. And that already should have been broken down on your presentation. The reason why I don't necessarily consider that an objection because very rarely do we get it is

because that's already part of the presentation. When we give them the offer, we break it down. We say, Hey, we've done our due diligence. We've gone out here and we've seen, if you put this on the market, you likely would list it at this 300,000. Well, what happens when you sell it at 300,000 immediately 6% goes to the realtors. Uh, one to 2% goes to repairs. Um, roughly you'll get 92 to 94% of that number as your actual buyer. And then you will have a closing cost, right? So it's roughly 10% to sell his home or more depending upon where the actual offer comes in. And so Mr. Seller, that puts this much money in your pocket. Well, I'm at that number. We're right there. Why wouldn't you just do this with me? Do it now, make it fast, make it much more service oriented because here's how you

overcome the financial aspect. If you do that and it doesn't sell at that price, now you got to reduce the price. You now pay three, four or five more months of mortgages. You now have two, three, four or five more months, six months of mortgages, another half a year of taxes that have accrued. You've now wasted your time. You're now reducing it. There could be more wear and tear on that property over that time. You just, speed is everything, right? Now I'm going back to the speed. I'm going back to convenience. I'm going back to the service. So we do a lot of that on the front end. But if you are hearing that on the back end, well, Joe Smoe said I can sell it for 300,000. Then you have to overcome it the way I just told you. So that really is the key rebuttals, right? I need to think about it. I need to, you know, talk to my husband and wife, which is

another version of I need to think about it. I need my CPA or lawyer to review it. I'm waiting for another investor or to talk to, I have two more appointments with investors and I want to take the highest and best offer. You have some of the big boys in house. I've already received a higher offer from OfferPad or OpenDoor. If someone's already received an offer, your first question, by the way, is, well, why haven't you taken it? That's your first question. Because if they haven't taken it, that means there's other things out there that are more important than that highest number. And you need to find that. And then lastly would be, you know, Joe Schmo says

I can list it for a million dollars. And you say, well, why haven't you done that yet? And here's what happens when you do, right? And you just educate them, educate, educate, educate. So those are the rebuttals. Those are the objections. I'm actually gonna be giving every one of you who is listening to this, who wants those, I'm gonna give you that document,

our seller objection document. I think we have a cool name for it, but right now I can't think of it. I will give it to you for free so you have something in front of you. Just make sure, A, you need to be following me on Instagram, the Justin Colby, and Facebook, the Justin Colby, and YouTube, Justin Colby VP. I thank you guys for being great listeners, very loyal. We're doing some cool stuff this year I'm doing a lot of marketing intensives here two days with small groups we have big scale and scape event coming in the middle of the year if you're interested in being our mastermind I'm happy to talk to you about that there's just so much cool stuff going on I'm excited

I hope this finds you guys well but I am signing off for this episode of the science of flipping podcast I'm out of here. Peace.