How to respond to 5 common consumer misconceptions

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A small model of a house is cupped by pair of hands.

02/08/2016 | Author: Editorial Staff

You’ve heard these all before, but have you come up with the right reply? Here’s some help with what to say the next time a consumer or client says … 

“I could save money selling the house myself.”
Tell them FSBOs can linger on the market since they are often priced incorrectly, or the sellers lack information about improvements they could undertake to make the home more appealing. You have access to data to accurately price a home for the current market. And you know what buyers in your area are looking for in a home, so you can help sellers play up the features that make it attractive.

In addition, you can cast a wider marketing net than they can. And when there’s a lot of interest in a home, you may be able to sell at a higher price. There’s also the time it takes to market and show the property. Perhaps one of the most compelling reasons to use a Texas REALTOR® is to avoid legal issues. Don’t forget to mention your exclusive access to more than 100 forms for a variety of real estate transactions that help reduce their risk.

“Why should I sign a buyer’s representation agreement before I know how you’ll perform?”
Explain that a buyer’s representation agreement means the consumer is hiring you to work for him or her. Like other professionals they may hire, such as attorneys, a representation agreement outlines how you will work in the client's best interests and how the broker will be paid. Point out that the agreement can be in effect for any amount of time, even as short as a few hours. Be willing to let the prospect sign the agreement for a short period to see how it goes, and let him or her know you’re willing to amend the end date.

“Your commission is too high.”
Many consumers don’t realize all the services you provide. Detail the work that you do throughout the transaction, from marketing to negotiation to the follow-up work required to complete the deal. Show any successes you’ve had related to selling, whether it’s how fast you sell a property, how often your listings sell for asking price or higher, or that your listings sell for a higher percentage of asking price than the market average. Testimonials from past sellers can also help show you’re worth it.  

“My house is worth more than your suggested sale price.”
Ask more questions to find out why they feel that way. They may believe their renovation investments should have a dollar-for-dollar return, or they may feel financial pressure to pay off debts. If it’s the former, you can show them the annual Cost vs. Value Report from NAR and Remodeling magazine for regional-specific information on the return on investment of certain renovations. If it’s the latter, tell them to put themselves in the buyers’ shoes. If they were a buyer, would they be willing to pay extra money for something worth a lower price because of the sellers’ personal situation? You could also agree to list the home at a higher price for a set period of time, then if there is no interest, lower it to your suggested price.

Always show sellers the data you used to come up with your suggested sale price, and remind them that personal feelings aren’t a factor in determining a price that the current market will accept.

“That’s such a lowball offer that I won’t even counter it.”
Let them know you can use the Seller’s Invitation to Buyer to Submit New Offer (TAR 1926) form, which allows them to outline what kind of offer they would like to see. Explain that sometimes details other than price can be appealing terms for a sale, like a fast closing. It’s better for the seller to spend a little time trying for terms he’d prefer than entertaining no offers at all. 

Check out the May 2015 issue of Texas REALTOR® magazine to read more than 50 other tips for your business. 

Categories: Business tips, Forms, Buyers, Sellers
Tags: business tips, forms, magazine, texas realtor® magazine, fsbo, buyer's representation agreement, commission, renovation


Comments

THERESA AKIN on 02/14/2016

I show comparisons of properties sold in the area by FSBOS and their DOM versus using a Realtor.  Amount of exposure by FSBO versus Realtor.  Security screening of serious buyers versus looky lous.  Regular comps as market changes on daily basis. I can give them information they can’t always have access.

Stephen Williams on 02/12/2016

“I can save the commission with a FSBO”

I tell prospective sellers, “You can also set your own broken arm.  It may or may not work, but the odds of success are usually pretty low.  And sometimes you don’t find out until it’s too late that you didn’t know what you were doing.”

I also point out that just because “X” sale price times “Y” commission is easy math, doesn’t mean that’s the only thing they should consider.  Pricing, legal liability, value of their time…. all a little harder to calculate, but just as important as commission.

Lane Mabray on 02/08/2016

Wow, Doris Snipp, that’s pretty powerful….I have also seen an extensive list of things that an agent does before and during getting to a closed sale.

Doris Snipp on 02/08/2016

Commission question: Explaining your services is of course listed in the services you provide. However I find following up with a break down sheet of your commission just as you do on your closing costs sheet is more powerful. List what your broker receives, transaction fees, E&0, etc. Taxes, Socical Security x 2, your retirement contribution, health care and vacation funding, advertising etc. car expense, MLS membership, supra fees, showing service fees,  etc., Do this as it relates to that one commission.  Referral fees can be listed also,  or if not allowed, you can list under Other fees right under the Broker Fee.  I present this with a Buyer Representation Agreement, filled out and signed by me. I have a Buyer Book that I give each buyer at our first meeting. It gives information on the buying process steps, explains the option period, inspections and what is inspected, Homestead, my credentials, financing, etc.  My commission breakdown and representation agreement is included. Generally you are netting about $12-$15 an hour.  Buyers Agents may net less with the number of showing hours and searching for homes to show as well as making showing appointments.  This puts to rest where my commission goes and to whom.

Lane Mabray on 02/08/2016

These are excellent reminders….When a seller doesn’t want to respond to a “lowball” offer, I do tell him about and use that “sellers invitation to submit a new offer”, but I also give him a picture telling him “If you are playing a tennis game and you don’t like a serve of the ball by your opponent, so you don’t try to return it, you know you will never win a game” or words to that effect…. That usually works…


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The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on texasrealestate.com. Any legal or other information found here, on texasrealestate.com, or at other sites to which we link, should be verified before it is relied upon.

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