So people always ask me, “Kiwi, “what are the seller objections “that you mostly run into that “you feel inhibit the seller’s ability to sell their home “and ultimately cause the seller’s home to sell for less?” Well, stick around and we’ll discuss five objections that sellers have that are currently inhibiting their selling options.
This is Kiwi of the Coast, your luxury real estate specialist, helping you maximize and sell the value of your coastal home.
So your objections as a seller, how are they inhibiting and limiting your options as a seller?
Number one is commissions. Now, as everybody knows, commissions are negotiable. But what a lot of sellers don’t realize is that we use commissions strategically to attract agents with qualified buyers. Remember too that we’re also attracting buyers, but the second component that people don’t remember is agents with buyers. Now, we all know that payday for real estate agents is not on Fridays, so that agent, when he’s out showing a property, is attracted to higher commissions. Here’s how it works. We know that commissions are negotiable, and typically commissions can be 4%, 5%, 6%, sometimes 7%, and usually the way it works is that the listing side and the buyer side agents split those commissions, two, two and a half, three, and three and a half, if my math is correct. Now pretend you’re an agent for a minute. You’re out showing real estate, you’re out showing homes, and you see a listing that is three or three and a half percent. You’re gonna, as we say in the business, drag your grandmother to see that particular property. As our other agents, that home is not gonna be unshown. It’s gonna have a lot of attention. And let’s face it, that agent, when he’s showing that home, is gonna be a way, a lot more enthusiastic about showing that home to his buyer because the payday is much greater. Now, let’s look at the other extreme. This is the situation where, like many sellers, they wanna save on the commissions so they can maximize the net. It’s all about the net. So other side of the coin is they list with Auntie Mae, who’s just got a license, she lives two cities away, and she’s gonna help the kid sell the home. List the home for four, 2% offered to the buyer’s agent, and guess what happens in the real world. Does that home get shown? The answer is no. Agents are not very likely to show that home, especially if there’s a whole bunch of other alternatives. Guess what happens after six months. The home has been sitting, and the agent says to its clients, who it’s related to, she says, “Hey, the only thing “you can do is reduce the price.” Now, in our marketplace, where the homes are two million plus, a typical price reduction might be 50 to 100,000. 1% of commission is 20,000, still a lotta money. But you see what I’m saying. After another six months or three months of being on the market, this is like a wallflower. That’s one of those girls at the dance that’s not getting invited to the dance floor. The home is stale. It’s not getting shown. The price reduces even more. And look, that’s the home that’s gonna get picked off at a low price. That’s what happens. The other alternative, the home that’s on the market with multiple interests gets multiple offers typically. Multiple offers means higher price for the seller and higher price is higher net.
Objection number two is, hey, we need to talk to another agent. Well, wait a minute. Delays are not beneficial in this marketplace, and if you’re working with a professional like Team Kiwi, the key is to find out what other questions that client has and provide the answers and the solutions so they feel comfortable moving forward. Interviewing another agent just means not all my questions were answered. So yes, four eyes sometimes better than two eyes, but if you’re working with a professional who’s got those answers and can solve those solutions for the seller, make them feel comfortable, and move forward without delay, that’s gonna be key to getting that home on the market early, selling it for more.
Objection number three is, hey, I wanna try selling that home myself. Let’s look at the merits of that. And look, I get why they may wanna save some money, not hire an agent, but let’s look at what they’re putting themselves into. Now, 95% of the buyers out there are represented by real estate agents, so when you’re selling it yourself, you’re unrepresented, and let’s look at the typical profile of a buyer that’s had to bypass that sea of qualified real estate agents to locate and come and see your home. First of all, marketing the home yourself, you’re not gonna have a full exposure to the marketplace ’cause you just don’t have all the tools. This is a one-off for you and the type of buyer that you’re going to attract is more of the investor type. Now, I don’t wanna say shark, but I’m gonna say it. They have had to navigate past all those other agents and go directly to you, and what are they gonna offer for your home? Well, they’re not gonna offer full price, are they? They are looking to save the commission too, and they’re probably gonna offer 6% less than your asking price or even more. So why risk one of the biggest financial transactions you’re ever gonna do in your life, unrepresented, when you’ve got a sophisticated buyer on the other side? Why risk having no one to negotiate for you, no one to handle all the paperwork, no one to handle all the marketing, if you’re selling, and no one who has the E&O, and also lawyers and legal standing by if you need it, if things were ever to get sticky? Doesn’t happen often, but can occur. So hiring an agent is key. Doing it yourself is fraught with danger, and simply put, don’t do it.
Number four, and I get this all the time, is hey, we’ve got a friend or relative in the business. Well, hello. There are thousands of real estate agents. Well, we’ve all got friends in the business, relatives in the business. But seriously, this is not a Tupperware party. Invite your friends over for the weekend. Don’t invite them to list your home, especially because it’s the number one most expensive financial transaction that you’re gonna do. So why have the potential for someone, especially friends or family, that is emotionally involved, has some ax to grind potentially, in that transaction, and is not third-party? Look, you cannot fire your friend. But if we don’t do our job properly, you can fire us. So look after your friends. Have them over for the weekend. Don’t hire them to be your real estate agent.
Pricing, and look, we can start high and we can always come down later. Now, there are two things that have to occur for a buyer to make an offer on your home. First of all they gotta be attracted to your home. We could talk more about that in other videos. And secondly they’ve gotta see value that the price you’re offering. A high price signals to buyers, especially now they’re all on their iPhones and laptops, signals to buyer that there’s no motivation and you really are just testing the waters and kicking tires. You’re not really interested in selling. Word gets out. So if a market is going up, you might get lucky because the market might come to you. But in this day and age, with buyers’ confidence lower because all of the information out there, from Wall Street and the news and so on, is saying to people, look, maybe waiting is a better strategy. So pricing your home right is going to be key. If you don’t do it now, you’re going to end up being on the market for longer and typically selling for less. Or as we say in our business, that first offer is usually the best one. So don’t be foolish and try and chase that market down. It’s not the market to do it in. It’s funny because, even as agents are sensitive to price reductions, and we’ve even changed the terminology, it used to be price reduction, and now it’s price improvement. Funny, isn’t it? So time is money. Price it well. Price it to sell. You won’t be disappointed. You’re gonna sell it in a shorter period of time for more money. And remember, if you delay, that buyer that you have today is probably already in another home, so you’re gonna miss out. So don’t delay that process. Hey, listen, I hope you found all that information valuable.