Monday Feb 17, 2020
Ep 093 The 6 Most Common Objections On Seller Financing And How To Handle Them
- Objection: We want 20% down- Question: what do you need it for or is it a trust issue? Be their advocate. Explain all the reasons you have to make sure this works for them.
- Objection: Interest rate too low- Question: what's the issue with the rate? Solution: show them the gross earnings and compare it to parking the money in the bank. Ask them what they would like and explain why the payment has to work for you.
- Objection: I want a shorter term- Question: is there a reason why you need a shorter term? Solution: the longer you hold this the more money you’ll make, wouldn’t that make more sense. Add an extension option to the contract for a fee to get an additional year if need be.
- Objection: I don’t want to be in second position- Question: what is your concern with second position?, isn’t your equity already in second position because of the loan you have on the property? Solution: Explain their equity position and how the banks have to be paid first if they were to sell the property for cash. Therefore their equity is in second position anyway.
- Objection: I want more money- Question: is there a reason you need that money? What is most important to you purchase price or terms? Solution: I can give you more money if you are willing to hold financing longer or we may have to adjust other terms such as interest rate, or down payment.
- Objection: I am afraid of the due on sell clause- Question: what's the worst case scenario for you? Solution: Explain that for them to exercise the due on sell clause they have to stop taking payments, the bank could no longer accept your monthly payment and then would have to start foreclosure proceedings and banks don’t want toxic assets on their books because it impacts their lending ability. Also explain that you have the most to lose in the deal because of the money you’re putting down. And maybe you can do a land contract or contract for deed and/or take certain precautions such as don’t notify the bank of the sale, don’t cancel insurance that’s already in place, pay through a third party ESCROW.
Remember to always voice their concern, validate the concern, ask a why or what question, then offer the solution or “objection handler”. Happy investing!
And to get special access to a step by step video on how to structure offers, text CFP to our hotline at 877-409-8090 or click HERE.
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I will need that training video too
Friday Feb 21, 2020
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