The real estate industry is deceivingly easy to get into, so much so that many don’t understand the full scope of the job until they are knee deep in it. With the majority of new agents having no sales experience under their belt, it is no wonder the industry has an 87% failure rate. However, it doesn’t have to be this way. One of the best ways to ensure success in your real estate business is to familiarize yourself with the most common real estate objections and how to take the reins in handling them effectively.
What We’ll Cover
- Objections vs Concerns
- Six Steps To Overcoming Objections
- Five Of The Most Common Real Estate Objections
Objections vs Concerns
There is a distinct difference between real estate objections and other concerns that come up throughout the process.
Concerns often come in the form of questions, comments, or complaints that can be answered or acknowledged without fear of losing the client’s business.
When your client presents you with a valid concern, let them know you hear and understand the problem, and assure them you’ll do your best to address the issue. Some concerns, like “the kitchen is a little smaller than we’d like”, may not be actionable but should be acknowledged, possibly with a gentle reminder that it is nearly impossible to find the absolute perfect resale home and there will generally be some give and take.
Objections, on the other hand, are more serious in nature and can be detrimental in any stage of the transaction process if not handled properly. In other words, objections are situations that you will have to solve and overcome in order to see the deal through.
An objection might be a doubt that your client has or an unwavering idea or opinion they bring to the table. In this case, be sure to ask the client questions to get more context and direction on what to do next.
Six Steps To Overcoming Objections
1. Get into the right mindset
First things first, when handling an objection you have to get into the right mindset. Remind yourself that the client has some interest in working with you, given their engagement with you to this point in the process. Stay strong in the face of objection and be confident in the skills and value you bring to the table.
2. Be in Agreement
Always make sure you and your client are on the same page. This is especially important when faced with an objection. Allow them to ask clarifying questions, and make sure that you ask questions to better understand the situation as well. If there’s a difference of opinions, seek to find common ground and build from that.
3. Use the Right Language
Using the right language is important in sales, especially if issues arise. When addressing an objection, avoid following your statements with the word “but”, which can essentially negate everything you’ve just said and create distrust in your overall message. Instead, build off of each statement using the word “and”, which will keep the conversation flowing without any unnecessary hiccups.
4. Allude to Previous Experiences
It can be helpful to call on your client’s previous experience, depending on the particular objection they have. For example, if the client says they know an agent who will list their home for a smaller commission, respond with something like “I totally understand how that might seem like an attractive offer, but cheaper isn’t always better. Have you ever experienced something like that?”
Perhaps allude to your own experience, which doesn’t necessarily have to be real estate related. Tell them about the discount maid service you tried once to save a buck, or the knock off toilet paper we’ve all tried that still does the job but not nearly as well.
Most times, unless the client is adversarial they will appreciate some humor here and agree with you. Take advantage of this moment to explain how their objection is just like the discount maid service or knock off toilet paper. The short of it is, there’s a higher risk that they will be unsatisfied with the cheaper service, which could cost them more time and money in the long run.
5. Check In
At this point, you’ll want to make sure you have done a good job of thoroughly addressing the client’s objections and ask if there are any further questions they have. Then you can ask if they’re ready to move forward.
If they don’t have any other objections, you are in the home stretch and can assume you are on your way to earning their business. Proceed with your presentation, and end by going over the next steps and gently guiding them to sign the listing or buyer’s representation agreement.
Five of The Most Common Real Estate Objections
By knowing what you are up against and formulating scripts for different real estate objections and scenarios, you can be confident in your delivery no matter the situation you are faced with.
Here are five of the most common real estate objections you might face during a listing or buyer presentation.
1. “I know an agent who can do the same thing for a lower commission.”
First, ask for the agent’s name, so you can compare their experience and performance level to yours. Remind the client that there are plenty of newer agents out there who will reduce their fees just to earn more business.
Then, use the situation to your advantage by letting the client know that in giving up a portion of their commission, that agent will have less negotiating power when it comes time to make or accept an offer on a home.
When dealing with sellers, assure the client that they are actually getting a good deal based on the high value you bring to the table, with professional photos and a more extensive marketing planthat will pay off tenfold.
If you are working with a buyer, reiterate your dedication to helping them find a home they love. Agents who offer services for a lower commission may be spread more thin or become unmotivated to help the client the longer the journey takes.
Above all else, stay firm in your commission rate and confident in the value you offer.
2. “We have a specific number we wanted to sell the home for.”
If you haven’t already, this is a good time to go through all the sold comps with the client. If you’ve already done this and they still bring up this objection, remind them that you’d like to get them that much for their home, but unfortunately it is not entirely up to you.
Your role as their listing agent is to know the area and market the home to the highest number of qualified buyers and agents, at a price point that will get people in the door to see it. Since the buyer is also looking to get the best price, you have to be competitive with other homes on the market to have the greatest chance of success.
If they are insistent on their pricing, ask them why. You might find an easy answer; maybe they think their home is worth the additional $20k because it has a covered patio, at which point you can show them other homes in the area with similar or better features that didn’t sell for that much.
Often a more difficult, but not impossible, issue to overcome is when sellers inflate their pricing based on their emotional attachment to the home. To overcome this, explain that a more inflated price will result in less interest, meaning the home will likely take longer to sell. The longer the home sits on the market, the more negotiating power the buyer feels they have, which will in turn hurt the seller’s bottom line.
It can also be helpful to explain that in a seller’s market, it is best to list just below market value as this will create a frenzy of interest and potentially lead to a bidding war.
It is important to take the time and fully address their concerns so you can come to a price that everyone can agree on.
3. “We are just not ready to pull the trigger yet.”
First, assure them that whatever they decide to do is fine with you, and your number one goal is to serve them and make the whole process easier.
Then, get the client to talk and share their hesitations with you.
Always have some motivating factor as to why now is the time to buy or sell. You might incentivize the client by honing in on the current interest rates, market conditions, or seasonality in your area.
4. “You’re a great agent, but I’ve promised to interview another agent.”
Even if the client has another interview set up, there is no obligation until an agreement is signed.
Ask the client if there is something more they are looking for in interviewing this other agent. If they just want to interview more agents, ask why they would waste the time if you’re ready to go, with a plan for success.
If there is something specific they feel you are lacking, reassure them of your abilities and the unique skills you bring to the table, as proven by your record of success.
You can even offer to call the agent on the client’s behalf, and let them know as a professional courtesy that you’ll be working with the client. This gives the client a way out so they can start working with you and avoid having to break the news on their own.
Calling the other agent can actually benefit you. Tell the agent you would be happy to work with them as well, if they find a buyer for the home or have a listing your buyer would be interested in.
5. “Maybe I’ll go back to the agent that I used previously and lower the price.”
This is a common objection when dealing with expired listings, which often expire because they were overpriced from the start. So if you hear this objection, tell them why trusting the other agent’s guidance doesn’t set them up for success.
It might be helpful to use an analogy to help the client understand. If a doctor misdiagnosed you, and you then sought a second opinion, would you really go back to the first doctor when it was all said and done?
Final Thoughts on How to Handle Common Objections
Handling objections can be stressful. The best thing you can do to handle common real estate objections is to prepare yourself for possible scenarios, practice your response, and think of related situations that you can use in your explanations.
By doing this, you will be more confident in your presentation, knowing that you are a step ahead of the game and can handle any objection thrown your way.