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Buying a home is one of the most important
decisions that a buyer will make in his or her life; that decision will have
ramifications that may affect him or her forever. While the idea of owning
real estate is appealing, the process of negotiating is often complex
and intimidating. Fear and anxiety are common; people worry not only
about possible cash losses but also about the unknown, the unstated and
the undisclosed. The key to successful home sales is
to overcome the buyer’s objections. The art of successful home sales is
to sell a dream. The difficulty of the home seller, therefore, is to be
able to appeal to the emotional desires of your potential buyer and
channel the needs of both the buyer and seller onto a standardized
contract. However, this is not as difficult as it may appear.
As a seller, it is important to remember that you are no longer a home
owner but a professional sales person that is selling a quality piece of
merchandise. In addition, it is important to approach the home selling
process through the eyes and perspective of the buyer. Whether you are
preparing your home for your first open house or are sitting across the
negotiating table with your buyer, always ask yourself, “If I were
buying this home, what would make me want to buy this particular home?”
The successful negotiating falls upon your shoulders, the home seller.
To be successful, you must:
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Be determined, confident and resolved to sell your
home.
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Know exactly what your end goals are.
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Overcome the buyer’s objections.
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Help the buyer decide to buy the home.
By doing so, you not only ensure that you will
successfully sell your home but will do so in a manner that all parties
involved will be happy and agreeable after all is said and done.
Be determined, confident and resolved to sell your home.
The first decision you have made so far is to sell your home. However,
in order to do so, you must first make the commitment with yourself to
sell your home. This is not merely saying to yourself, “I want to sell
my home,” buy making the resolution, “I will sell my house.” In
addition, you must realize that very few people are successful overnight
but understand that it may take weeks, or in some cases, months to sell
your home. It is vital that you maintain your determination and
confidence throughout the entire process—from day one to day 183.
Allowing yourself to waiver in your determination and confidence not
only adversely affects you mentally but also on every other aspect of
selling your home. By allowing doubt to creep into your mind, sellers
lose their will to sell. More times than not, you will lose profits
and/or be more susceptible to making unnecessary concessions to a
buyer—just to get the home sold. Also, a lack of resolve can often times
be detected in the upkeep of the home. After a while, many sellers
become tired of cleaning the bathrooms and getting the home “show ready”
which leads to deterring potential buyers from purchasing the home or
conceding to an outrageously low sales price because of the poor
condition of the home. Stay committed throughout the
entire process. Your outlook on the process will have a significant
impact on selling your home. It takes one person to buy your home. If
they decide to buy, their offer is often times a reflection upon your
determination, your confidence and your resolve in your house and the
home selling process. Know exactly what your end
goals are. One of the most important steps to
selling your home is to decide in advance what is the least amount of
money you are willing to accept for your house. Knowing the bottom line
is extremely important during the negotiations of your home. If you know
what is the least amount of money you will accept for your home,
deciding whether or not to respond to an offer becomes much easier. If
the initial offer is just at or above your lowest acceptable figure,
then you should feel fairly comfortable that you can reach a middle
ground with this buyer. In addition, decide on other
acceptable and non-acceptable terms and conditions. Ask yourself:
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When do I have to move?
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How much do I want to ask for an earnest deposit?
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What furniture and fixtures are staying and/or
going?
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Will I carry a note for the buyer if necessary?
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What buyer conditions and clauses will I accept or
not allow?
Remember that price is not the only negotiating
tool that you have available; how you piece together the terms and
conditions of a contract in conjunction with the sales price can often
turn an unacceptable offer from a buyer into an acceptable sales
contract. How do you determine the minimum that you
are willing to accept? Only you can decide that—hopefully after you have
given thoughtful consideration to not only market conditions and prices
of homes sold in your area but also to your present situation.
Overcome the buyer’s objections. You will
probably find that most objections are not really objections. In some
instances, buyers will actually verbalize as it is happening. If you
just listen to what buyers are saying, you may find out that they are
going through the process of talking themselves into purchasing your
home. Sometimes the mind will play devil’s advocate. Be patient enough
to listen to the entire objection before you pipe in and try to overcome
it. The following advice will help you overcome a potential buyer’s
objections. If the buyer states a bona fide
objection, and you have given them ample time to overcome it themselves,
then you should restate the entire objection as the buyer stated it.
Once they hear the objection coming at them from a different angle, they
will have another chance to think about it and possibly overcome it
themselves. The conversation usually goes like this:
Buyer: “We don’t think that the yard is big enough
for our present needs.”
Seller: “You don’t think that the yard is big enough for your present
needs?”
Many times buyers will hear how silly their
objections sound, they will soothe their own fears and move onto
something else. They might be heard saying, “Well, maybe we can make do
with this lot for awhile.” Acknowledge, understand,
and question the objection. Probably the worst thing you can do is to
ignore the buyer’s objection. If the buyer is truly concerned about a
particular item and you act as if there is no concern, you can actually
increase their anxiety about it. The buyer will believe you are
consciously avoiding and/or hiding something. Their trust will diminish,
and the sale will never be made. Most buyer’s objections are really only
an expression of their insecurities and once you can understand where
the buyer is coming from, you can move on. The next
step is to question and explore the objection. This step will also help
you confirm that you really understand the buyer’s position. Continuing
from the dialogue from before, you might say, “Can you tell me exactly
how much more yard you feel that you need?” By saying this, you will
help the buyer clarify the answers in their own minds. In many
instances, you will find that when you question the objection that has
been stated, the true objection arises. Isolate the
true objection. Try to prevent yourself from just answering objections
one after the other. The true objection may never be verbalized. Often
times a buyer will not know why they are reluctant to act until someone
has helped them isolate what is really bothering them. For example, you
might say, “Is there anything other than the size of the yard that is
keeping you from making a decision today?” By asking this kind of
question you not only isolate the objection buy you limit the chance
that you may have to deal with some other latent concern.
If the buyer’s objection is real and you can
effectively negate their concern, you may not have to deal with a list
of objections later. The only way to keep this from happening is to ask
a pointed questions like the aforementioned one. Otherwise, you allow
the buyer the opportunity to walk away without purchasing your home on
additional objections that may not be well founded.
Deferring or overcoming the objections. You will find that when a buyer
states an objection, they are really only stating their insecurities and
their need to move along at a slower pace. For example, what if a buyer
were to come into your home and proceed to walk around the first floor,
but before going upstairs or downstairs they look out the back window
and say, “I’m concerned about the size of the backyard.” You might defer
the handling of their objection by saying, “I understand what you are
saying. We have never experienced any concerns in that area. If you
would like, we could talk more about that after you see the rest of the
home.”
This may seem a little pushy and possibly even
uncomfortable to say, but when the buyer sees the rest of the home, you
may not need to say anything else. A buyer always weigh things out.
Maybe the backyard is not as big as they would like, but where else will
they get a finished basement with a fireplace at this price? Most of the
time you will not even have to say anything. If after seeing the rest of
the home they still have their original objection, then you can handle
it. You certainly wouldn’t get too far if you were to follow the buyer
around and try to overcome every minor objection that comes out.
Other techniques for handling objections. There are
a thousand and one other techniques that you may have heard about but be
careful not to become a “used car salesman.” You should help people make
a decision, not trick them into one. If a buyer is lured into making a
decision that they are not comfortable with, their discontent is bound
to surface later in the transaction. If there is anything that you do
not need, it is a buyer having second thoughts on closing day.
However, one technique that will help you assist the buyers in making up
their minds is to reduce the objection down to its smallest terms. For
example, what would you say when a buyer states that they believe the
purchase price is about $1,000 too high for them to afford at this time?
You could inform them that $1,000 at 10% interest over 30 years is
really only $8.78 each month and that approximately 90% of that is
tax-deductible interest. In fact, $8.78 per month is really only 28
cents a day. By helping a buyer visualize that they can get a home with
all of the amenities of your home for only 28 cents more a day than a
home without all of these amenities, you allow them to put things in
their proper perspective. Another successful
technique that assists buyers with their decision is the construction of
a balance sheet. By listing out in longhand all the positive and
negative features of purchasing your home, you allow the buyers the
opportunity to make an informed decision. There is no reason why you
cannot help them fill out this list. You have lived in your home, and
who is better qualified to assist the buyer than you? The benefits of
purchasing a home outweigh most detriments. This list will also help you
determine whether there are any additional objections that need
attention.
Other examples:
Buyer: We want to think it over.
Seller: The decision to buy a home is certainly an important one.
Could you tell us what exactly is causing your concern?
Buyer: This house is not big enough.
Seller: We have found this home to be very comfortable for our
family of ___. Please remember that if you go to a larger home the price
is likely to increase also.
Buyer: I would like to think it over and get back to you.
Seller: Is there something that I have not made clear or have not
explained thoroughly? (You must isolate the objection and/or the reason
that stands between the buyer purchasing or not purchasing your home).
Is there a problem with the neighborhood? (You must then strategically
pinpoint the objection). Is there a specific problem with our home? Is
this too expensive for you at this time? (The next step is to suggest an
alternative). What if we agreed to make your purchase contingent until
tomorrow at 5:00 p.m. to allow you time to think it over? (Chances are
that once they have committed their decision to paper, their minds will
confirm their actions and they will become more comfortable with their
decision to buy).
Selling the benefits. When you sell a home you are
not just selling bricks, wood, and mortar, you are selling dreams and a
standard of living. Advertising companies are renowned for selling ideas
and dreams. This technique works. Essentially, you are selling the
“sizzle, not the steak.” The point is that a buyer buys the benefits
they feel will come with owning your home. Be aware of this fact not
only in your advertising, but in the way that you talk to a buyer when
you describe your home and the amenities it possesses.
Practice using descriptive words and adjectives when you describe your
home. Instead of talking about the kitchen area, talk about the
work-saving, efficient kitchen. Instead of saying that your home is in a
nice location, describe it as being in a convenient location with easy
access to all amenities. You do not have a garage door opener, you own a
time-saving, convenient, and practical garage door opener. The list can
go on and on. Finally, avoid using words like “very” when you are
selling benefits. There are so many words in the English language that
are better suited to describe the way you feel about a particular item.
If you need any further help, consider picking up a thesaurus at a local
bookstore. Help your buyer decide to buy the home.
In this day and age of consumer spending, buyers are having an
increasingly difficult time saving money, especially consider credit
card rates can exceed 22% per year. The problem is further compounded
when they want to buy a home. Even though the required down payments for
a mortgage can be as low as 3 percent on some mortgages, that still ads
up to several thousand dollars on the average size home. Add to that the
closing costs and the buyer prepaids and the buyer has just now taken
themselves out of the home buying process because they do not have the
necessary funds to close on the home of their dreams. However, there are
several strategies that you can employ to help a buyer decide to buy
your home. Down Payment Assistance Programs. You may
offer to pick up the buyer's down payment for the home by using special
down payment assistance programs. Instead of dropping your price
by a two or three percent in order to strike a deal, a seller can
increase the number of eligible buyers by standing firm on the asking
price and offering money saving incentives. For the seller, the
net profit should be approximately the same. For the buyer, the
amount of savings is usually in the thousands of dollars.
Tax Saving Benefits. Often times, buyers overlook the additional tax
advantages of home ownership. Buying a home affords the buyer the
opportunity to deduct any interest payments made on a mortgage as well
as the property taxes paid on the home. On a $129,900 home with a
mortgage of $123,405 at 7.875% in Maricopa county, the home owner is
looking to accrue $10,667 in the first 12 months in tax deductible
savings. Estimated tax deductible savings for your home is located at
the bottom of the financial matrix. Be sure to emphasize this additional
tax saving feature to every potential buyer that walks through your
home.
Comparing the investing of the down payment in an
investment to purchasing your home. Many people consider buying
residential real estate an investment decision and since buyers are
programmed to view a home as an investment, why not sell it that way?
If a buyer had $20,000 to invest, they could deposit that money in a
bank, invest it in a CD, buy a mutual fund, buy an individual stock, or
buy a bond. In fact, with $20,000 to invest, one could invest in just
about anything. The important point to remember is that reward (also
called return on investment) is directly proportionate to the amount of
risk taken. Each of us has our own comfort level of risk and reward.
Buying a home is often seen as one of the least risky investments. If
you compare investing in a home with an investment in a CD, the figures
would look something like this:
$20,000 cash to invest x 6% interest from the bank
for 1 year = $1,200 of TAXABLE interest income.
$150,000 value of home x 5% appreciation for 1 year = $7,500 of
TAX-DEFERRED appreciation.
The same $20,000 invested can earn a person $1,200
or $7,500. The reason this is true is because of the leverage a mortgage
gives a home buyer versus an investor. When a home appreciates in value,
the appreciation rate is calculated on the total value of the home, not
the amount of cash that you have invested. The
choice is clear. Buying a home is not only the best investment
alternative, it’s the most logical decision a person can make. Remember,
this comparison does not even consider the physical, emotional, and
psychological advantages of homeownership.
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