How to Overcome Objections from Sellers
By: Jim Zaspel
You’re nervous and your palms are a little clammy, but more than anything, you’re just EXCITED to get the contract to buy your next (or first!) real estate deal! It’s an amazing feeling, isn’t it? Then BAM! The seller asks a question or raises an objection and suddenly your heart starts thumping so hard that they can measure it on the Richter scale! “Oh no!” you exclaim, “I might lose this deal…how can I save it?!?” The following 10-60 seconds can mean the difference between getting the deal or losing the deal, so it’s very important that you arrive at that meeting already equipped to overcome the seller’s objections.
Each kind of deal has its own set of questions/objections to overcome. On this blog I’m going to cover those objections that are most common with Lease Option (rent to own/lease purchase) deals in the context of a lease option assignment.
The Top 3 Objections from Sellers:
1) “What if the tenant/buyer stops making the payments?” This is obviously going to be very important to the seller, isn’t it? You have a few answers to this question, any of which should suffice:
- a. Well it’s our goal to prevent that from happening, that’s why the background searches we do (www.TenantAuthority.com) are so important. They give you the opportunity to know exactly what kind of person you’re dealing with. And really, in my experience, only about 5% of lease option buyers default, so it’s not very likely to be an issue.
- b. Well, Mr. Seller, in the event that your buyer stops making payments, we’ll work out an agreement with them so they move out quickly, and of course I’d be glad to find another quality tenant/buyer for you at no cost. And as you’ll see, it doesn’t take us long at all to find someone, so there probably won’t be much of a delay at all.
2) “What if they tenant/buyer that you find moves in and trashes my house?” Again, a very legitimate concern, but as you’ll see, there are some very easy and simple answers to it.
- a. Mr. Seller, that’s a great question, and there are exactly two options in the event that happens. But again, because lease option buyers are definitely a cut above “normal” tenants, this is almost never a problem. Here are the two choices:
- b. If the repairs are really bad, you can just make an insurance claim, in which case your insurance company will cover the costs for repairs.
- c. This is the beautiful part about selling a house on a lease option. You see, about 75% of my lease option buyers actually improve (i.e. fix up) my houses when they move in! So, provided it’s pretty much just cosmetic work that needs to be done, I could easily find a tenant/buyer for you that would love to move in and fix up the house, in which case obviously it wouldn’t cost you a dime. We’d just reduce the price by the cost of the repairs.
3) “How will I get a loan to buy my new house if this loan is still in my name?” Overcoming this objection is very important! The concern is regarding the seller’s debt-to-income ratio. Here’s you simple answer:
- a. Mr. Seller, if you can hold off buying a new home for 12 months, my mortgage broker can count the “income” from the rental agreement against the underlying mortgage so that it’s pretty much a wash. In other words, once there’s a record of about 12 months of payments, you’ll be able to prove that you’ve got additional income to cover the mortgage payments.
Friend, the important thing to remember is that almost all of your sellers will continue to ask you questions until and while they are signing the agreement! Never take this as a sign of dis-interest on their part in regards to the deal. It’s how the seller satisfies their need to make sure they’ve gotten all their questions answered.
As Brian Tracey says, “When it comes to sales, there is no such thing as an objection, only questions.” Remember this sound advice and always assume the sale (i.e. assume that your prospect will and wants to do business with you), and you’ll have come a long way towards being a successful investor!
To YOUR Success,