Do you know what the #1 concern is you’ll hear about when working with potential sellers?
“I don’t know where I’ll go.”
Inventory is tight and potential sellers are worried they won’t be able to find a new home. The goal is to help them move forward to not only get their home on the market, but to find them a new one as well.
Working With Potential Sellers: Make an Appointment to View Their Home
Ask potential sellers to take you on a walkthrough of their home. Then, let them know you would like to sit down to discuss what they want to achieve.
Here’s a sample script to help you make the appointment:
“Let’s sit down and talk about what you’re looking to achieve. I’m going to bring some data and information for us to review. You do need to understand the market is very unpredictable. My goal will be to try to figure out with you the highest possible price we may be able to achieve for your home.”
“Once I view your home, and once we discuss where we feel we would begin or where you would like to begin, then I’m going to do a net sheet. I’m going to show you what the costs of sale would be after paying off anything you owe on the home, and the net amount you would walk away with. Then we’ll take that information, and discuss the mortgage payment you would be willing to make if you truly could find your perfect next property. I can then help you determine the budget for the purchase price of the new home, and we’ll also discuss what you might have to do to get your home ready and how much that will cost. We’ll also discuss how quickly I feel the home may sell and answer any questions you may have.”
Working with Potential Sellers: The Listing Appointment
Take the listing agreement with you, or whatever form your board requires, if you need to hold this off market for a bit. Sit down with the potential sellers. Have the conversation about the goals they are looking to achieve, and determine their level of motivation and what they can handle financially. Also, help them determine if they are capable of purchasing the home that would inspire them to move.
Working With Potential Sellers: Recommend They Speak With a Lender
Here’s a sample script to help you convince a potential seller to speak with a lender:
“Let’s have you talk to a lender in case you decide to move forward. I want to get you pre-approved. It’s a good idea to know your FICO score, and to make sure there are no mistakes or errors on your credit report that need to be cleaned up or corrected. The lender will provide you with your mortgage options and what the payments will likely be.”Send them to a lender you recommend. If they choose someone one else, make sure they choose wisely. Encourage them to work with the lender in order to figure out their maximum budget, and then determine the amount they are willing to spend on their new home so you have a shopping budget. Working with potential sellers typically involves ushering them from one step to the next. In order to provide the best experience possible, make sure you take each step right alongside them.
Working With Potential Sellers: 3 Creative Ways to Help Your Sellers Move Forward
1.) Reverse Contingency to Give the Seller More Time: When you get an offer from a buyer that’s acceptable, you’re going to counter and tell them that the seller needs to find a home of their choice. Put a timeline on it, potentially making it clear that if the seller backs out on the buyer, the buyer’s deposit goes back to the buyer.
The buyer may have to spend money for an inspection and for an appraisal, and maybe that’s just the risk the buyer takes. Suggest to the seller that they reimburse them if you don’t move forward. Every state and every board has different rules and a different protocol. Before you do utilize reverse contingency, make certain you’re doing it properly. This gives your seller a way to get a buyer and to still have assurance that if they don’t find a property, they don’t have to move.
2.) Off-Market Property: Complete the proper paperwork and follow the protocol set by your local board of realtors to have an off-market property. Reach out to real estate professionals in your community, your office, and even in your database. Start to gather some interest. If you find a buyer who’s willing to wait, that’s great.
3.) Site Recent Data and Trends: Reference that a recent RealTrends article (published on March 19th) surveyed homeowners across the nation. Explain that the results showed one out of five homeowners surveyed said they do want to move in the next year.
Working With Potential Sellers: What If Your Seller Wants to Wait?
Here’s a sample script you can use if a potential seller wants to wait:
“If I were you, I would be feeling the same way. And yet here is something that you may want to consider. A recent real estate publication said that of homeowners they surveyed, one in five said they would move in the next year. Those surveyed listed some of the following reasons:
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Once vaccinated, sellers would feel safe enough to have people coming into their home;
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Many people are not going back to a brick-and-mortar office, which allows them to move where they choose;
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Many see prices going up and would like to take the opportunity to cash out and go to a market where they can buy more for less.”
“If you consider these factors, it makes sense that over summer and fall we may see a wave of inventory. What it might mean for you though is more competition. When you have fewer multiple bids and more competition, you’re not going to sell your house for as much as you might sell it for when it’s a rare commodity. Right now, it is a rare commodity. If you thought you could financially gain even more profit potentially if you sold it now, is that something you would be willing to consider?”
Working With Potential Sellers: Helping Your Seller Find a New Home
You know a lot of people in your sphere, farm, and database, as well as past clients, friends, and family. They trust you. In fact, many of them have likely worked with you before. However, just staying in touch is not good enough. Step up as their wise real estate advisor. Put the ideas in front of them.
If you called one of your past clients and said, “I know you didn’t tell me you want to sell your house, but I met this buyer — and I think they are perfect for you. Would you consider an offer? And if so, what would be your price? What would be your terms in both cases?”
If they say they’re not interested, at least you put the idea in their head, and they know you’re thinking of them.
Be creative, be innovative, know your market, connect with other great real estate professionals in your market, and share ideas and off-market opportunities (and put deals together). Know the rules, know the regulations, know the proper forms, and handle it all ethically and responsibly. Don’t sit idly by and wait for them to call you, especially not in these next few months that could potentially be the best and the busiest of your entire career.
If you want more guidance on how to grow your luxury real estate practice, you can learn more about the Institute’s training options here.