Article of the Month for May 2003

Seller’s Objections Answered

Question:

Hi Ward,
Below is a list of seller objections that I have gotten from sellers and was wondering if you could answer all these objections exactly as you would in a real case. This would help a whole lot of us out.

Thanks,
Jon

Answers:

How can I ever get another loan if this one is still in my name?
Answer: Do the same as I do, take subject to your seller’s loan when you buy.
I don’t want the loan to stay in my name for longer than X months/days/years.
Answer: That’s fine, I’ll have it refinanced or resold by that time.
I don’t want to keep the loan in my name, PERIOD!
Answer: But I can’t qualify for another loan in my name since I own more than 5 houses. It’ll only be in your name for 5 more months. Then it’ll be paid off via a resale.
If I keep the loan in my name how do I know you will make the payments?
Answer: I’ll give you a performance trust deed to secure my promise.
We need more money than that!
Answer: I can appreciate that, but there’s not enough equity to pay you any more.
Another investor said he’d give us more money than what you’re offering.
Answer: Mr. Jones, many people will make you an offer that’s too good to be true. So if that happens to you just give me a call, because I perform on all offers I make.
We don’t want to sell our house, we want to keep it.
Answer: Nobody wants to sell their house if they can help it, but you don’t have any other viable option at this point. If you sell now you’ll be able to buy again in just a few years because you saved your credit from being scarred by a foreclosure.
I don’t care about my credit; it's already ruined.
Answer: But that’s recoverable in just two years. However, a foreclosure won’t go away for 5 to 7 years.
I’m not going to tell you what I owe on the house, that’s personal.
Answer: But I need to know your equity position to see if you qualify for a bridge loan.
Just make me an offer (over the phone).
Answer: But that’s not possible without looking at the lot, the house and floor plan. And California law insists that any offer I make you be in writing with a special cancellation notice attached.
We are going to counter offer.
Answer: That’s OK, but we don’t have a lot of time left before the sale.
I need to talk to my husband/wife before I make a decision.
Answer: By all means! Are they close by?
We want to think about it.
Answer: And California wants you to think about it too. They want you to have 5 days to think everything over after we sign the Equity Purchase Agreement.
We are going to talk to other investors to see who will give us the best deal.
Answer: That’s perfect because I know our 50/50 split is the best deal possible.
We want to rent it back from you.
Answer: That’s not possible since I need the freedom to rehab it quickly.
I'm just going to file bankruptcy.
Answer: Why ruin your credit for 7 years when you don’t have to?
What makes you so different from every other investor who knocked on my door.
Answer: I split the net equity 50/50 between us, I always perform as promised, and have 20 years of solid experience.
My foreclosure is already taken care of.
Answer: I realize that, but if it unravels let me know. I can stop a foreclosure in 2 hours.
My friend/relative is going to loan me the money to bring the payments current.
Answer: Time's running out, so consider our plan a backup that’ll only become operative if your friend hasn't performed within the next 5 days.
What if your tenant/buyer wrecks my house?
Answer: I won’t let it happen because I would lose all my investment.
When your tenant/buyer exercises their option who will pay closing costs?
Answer: The tenant/buyer of course.
What are you going to do with the house after you buy it.
Answer: Reinstate all delinquent loans, rehab the house thoroughly and sell it.
What if you don’t exercise your purchase option, what happens then?
Answer: You will keep the option money plus the house if I fail to exercise the option.
I’d rather let my house go to foreclosure than give it to you.
Answer: But why ruin your credit for 7 years just because you have no equity?
I’d rather let my house go to foreclosure than let my ex-wife get any money.
Answer: Show her up rather than lose. Use your half of the equity and your good credit to buy another house and get on with life.
I don’t care if I have a foreclosure on my record. My bad credit record will go away in 7 years anyway.
Answer: You’re right, but why bang your head against that wall if you don’t have to?
OK, I understand you’re going to reinstate the back payments and pay me $5,000 cash upfront plus an owner carry-back trust deed. But what happens if you can’t sell the house thereafter?
Answer: Then I’d put in more glitter and lower the price until I did sell it or you'd foreclosure against me using your carry-back trust deed.

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