Real estate agents are used to getting objections. No matter what’s happening in the housing market, homeowners will have questions, concerns and doubts about listing their home for sale.
Knowing how to handle objections is essential to help more buyers and sellers. And we all know that over the coming months, agents are likely to start getting a lot more objections than they were in 2021-2022.
Last week at BAM Camp, the Knowledge Brokers Podcast hosts treated the audience to an objection-handling role-play exercise.
Drawing from their experience and from the insights of others, Tom shared how to handle every objection with calm assurance.
Aside from providing a ton of value, it’s also a lot of fun to watch.
Keep reading for scripts for five of today’s most common objections.
#1—Tell me about your experience…
This is usually the first question you’ll get asked, whether over the phone or in person: “Tell me about your experience (as a real estate agent).”
Tom shared his response:
“Here’s what I know, Lisa. I’ve been doing this for 20-plus years. We’ve helped thousands of people buy and sell their homes. But more importantly, we know what to do, here. We have a process that’s going to be a lot different from what the average agent does because most agents are going to come in here [and] tell you, ‘We’re going to put it on the internet, we’re going to put a sign up,’ and they’re going to cross their fingers and hope somebody shows up and brings a buyer. Does that sound really proactive to you?”
#2—How many homes have you sold in my neighborhood?
Next up came the question about what experience Tom had serving Byron’s specific community. Because experience in general is certainly valuable.
But how well did Tom know Byron’s local market?
“That’s a great question, Byron, and there are going to be some people who focus on certain neighborhoods, and that’s all they sell. And here’s the challenge with hiring those people. They’ve probably got a couple of other listings or a couple of other consumers right in your neighborhood. And when they’re showing the home—and maybe they’re showing one of their other listings—they don’t care which one of those sells. They just want to sell one of them.
“When you hire someone like me, our job is one thing: to get the home sold and get you the best price and the best terms. This is a black-and-white business, so I’m going to show you how we can level that exposure up and capture not just the people who are online looking at Zillow and other websites. We’re going to go out and find buyers and bring them to your property. And I imagine that’s the kind of agent that you want selling one of your biggest assets.”
That’s about 70% of the market, right, that you’re going to capture just by one feed. And you can actually put agents in a box by letting them know, ‘Hey, if that’s the only feed you’re concerned with that most agents rely on…you might as well go for-sale-by-owner on your own. It takes the guard down…Nobody’s going to go to a listing and say that. But you’ve taken all of the agents in the market and put them in the same category as for-sale-by-owners. And then you articulate your own plan to expose to the 30% of eyeballs that are outside of Zillow. Because there still are 30% of eyeballs on listings that don’t live in that world. We need to have a plan to present to that….
#3—What are you going to charge me?
The next question is one most real estate agents have heard—or will hear–-if their commission rate is somewhere north of bargain basement:
- “How much will it cost me to work with you?”
- “Another agent is willing to work for a lower commission rate. Are you?”
Here’s how Tom responded:
“Our fee is normally 6%, and what I’ve found is most important is you feel I’m the right person to get the home sold. So, I’m going to show you exactly what we’re going to do differently. I’m going to walk you through how we bring buyers to the table, how we have a pre-launch program instead of just hopping up on the MLS and seeing what comes in. And I’m going to show you the results you can expect and give you a ton of [reviews?] from our clients. We can talk about the price, but if you don’t think I can sell the home, it doesn’t matter what I would charge you because you wouldn’t hire me, anyway, right?”
#4—Should I sell or rent?
Another common question in today’s market is whether or not it’s a good time to move—especially when it means giving up a much lower mortgage rate.
First, ask about their backup plan if they decide not to move. If the response is, “I think we might rent it out,” ask questions to determine their experience with rental properties.
“…Who do you have that’s going to help you manage the property? …Do you expect the tenant to take care of landscaping and snow removal and all those other things, and do you think they’re going to keep it the same way you do because, if you do decide to sell, you’re probably going to have to put more money into it anyway.”
Another question to ask is, “How long would you rent it out for?” because a lot of people haven’t thought about the timeframe.
“The reason I ask is this has been your principal residence, right? Once you rent this for more than a couple years, you might be paying capital gains tax, which 20-30%, depending on how much money you guys make. So, you might actually be taking a loss on it if you’re planning on renting it out long-term. And this is a great question for your accountant. Most agents, they don’t even think about capital gains, by the way, so I’m really glad you asked this question. And that’s where we can help you make a great decision here.”
#5—If we did decide to sell with you, how would you price the property?
The next question is one you’ll hear from a lot of sellers (if you haven’t already). Buyer demand has cooled, thanks to high mortgage rates, so homeowners who are thinking about selling will naturally put feelers out to see whether they’re likely to get the price they want for their home in the current market.
Plus, before they sign with you, it’s understandable they’d want to know, first, whether your estimation of their home is a close match to their own.
So, how do you answer a potential client who asks how you would price their property?
This is a longer conversation, so I’m going to give some guidance on how to do a market analysis…show them the public record information—square footage, beds, baths, all that stuff—any active, competing listings. Look at the time on the market on those. If it’s on the market more than a month, that’s a market-rejected property. Used to be 90 days, now it’s like 30.
So, here’s what you’re competing with, here are the pending sales, here is what the market is moving to, then here’s the last six months of sales that are like yours. And I use words like bigger, newer, larger, or smaller, and compare them very clearly. And instead of telling them the price, I like to go over the data and say, ‘What do you think about the value of your home after seeing all this information?
Byron also suggested referencing other homes that have sold in their community:
What do you think of the $900,000 that your neighbor got?’ Get their reaction off some of those numbers. Especially in this market, I want their number before I give them a number, every single time. And there’s a lot of different ways you can do that naturally throughout the conversation when you’re moving through the home.
One such opportunity is during the pre-qualification call, when you can ask, “What do you think the home is worth, generally speaking? Obviously, we’re going to give you a full analysis…” Byron added that this is a great time to ask because, when you’re at their home for the listing appointment, the seller is often more hesitant to suggest a price. Over the phone, during the pre-qualification call, they’re more likely to throw out a number.
Lisa then asked how Tom would handle it if the seller’s number was dramatically out of line with his.
That’s a great question, and in this market, it all comes down to one thing: how motivated are they to move? If people are motivated, they’re typically going to move…
Probably the toughest conversation in real estate is the price adjustment. A lot of agents haven’t had to do one of these ever because of the market. This is a skill, and…you mentioned the 2008 market. I would sit in my office for two hours on a Thursday, call every single seller I had, and ask for price adjustments for homes that weren’t selling…It’s a weekly phone call, and if it’s not moving, maybe you’re having the same conversation every Thursday, but it’s time-blocked, it’s painful, you’re getting it out of the way, and it’s put to bed before the weekend so you don’t have these people blowing up your phone Friday night, Saturday morning. And if they do, we talked about what to do. Let me know what you decide.
Obviously, these conversations aren’t just for the 2008 market. Byron brought up the nationwide increase in home price reductions in the past week, and Lisa expanded on this with a recent statistic:
“There are 519,000 listings sitting on the market nationally; 36% of them have had a price adjustment.
For context, Byron compared that to active inventory numbers for 2015
In 2015, during the same week, we had 1.2 million active listings. So, the unaffordability of this market is highlighted when you read out that number. We only have half a million active listings—not the 1.2 million. And yet, a third of them are reducing price? Typical supply and demand, when you have this little inventory, you’re just going to keep seeing prices rise. We’ve hit the top. We’re in the most unaffordable market ever, according to NAR since they’ve been tracking affordability. This is the least affordable market. There’s still huge opportunity. For people that can still afford the $2,600 monthly payment, this fourth quarter IS their opportunity to be hunting for homes, while those price reductions are increasing… But knowing who they are in your market and putting yourself in that position to have those conversations is going to be really important to protect your business over the next 12 months.
The next 24 months
Byron, Tom, and Lisa wrapped up the segment with some reminders and recommendations for agents wondering what to prepare for in the coming months and for the next couple of years.
Among those reminders—
- Objections are a gift
- The person asking the most questions controls the conversation (Phil Jones)
- Being a real estate agent is not for those who want to take weekends off
It is an at-bat business for the next 24 months…And the at-bats on Friday, Saturday and Sunday, if you’re running a team or if you’re fully in production, those are the three most important days. It’s a weekend business. Zillow’s data is very clear. Realtor.com’s data is very clear. The increase in activity from consumers happens on Friday, Saturday and Sunday—not on Monday, Tuesday, Wednesday, when all of our friends who have nine-to-five jobs are working, because they’re all working. Our business happens on Friday, Saturday and Sunday. That’s when the highest calls from consumers are being placed. And that is going to be the reality for the next 24 months.
If you’re a committed knowledge broker, working the days and hours that put you in front of more people, you’re far more likely to have conversations with people who are motivated to buy or sell. And because of that, you’re also more likely to develop (or adapt) effective scripts for every objection—and satisfying answers to the questions that come up.