How to approach a seller who thinks their house is worth more than it is?

Question

Hi all,

I'm meeting with a seller today that I got through my direct marketing campaign. This is my first lead. On the phone he told me what he wanted to sell it for. He must be in a delusion because the house is worth $150K less than that. Since I'm still new at this, I decided to take the appointment if only to practice my in-person skills.

What should be my approach with this seller? You could argue my time is worth more than this but I need the practice.

Thoughts?

Thanks!

Tony

Micah Copeland · Answer

@Tony Hernandez

For me the answer is simple. You don't. You are excited about it because it is your first lead and I completely get it! Its exciting when you first get going! However, if you stick with it then I guarantee in about 4 months you instantly junk this lead and move on to the next one. Feel free to play this one out and the people above gave you great strategies to play it out, but eventually you will not pursue leads like this one.

David Wurzel · Answer

@Tony Hernandez

It's good practice.  Go there with information that will show him how you come to your price.  What it's going to take to fix the place up.  What local houses have sold for within the past 6 months.  How that, even though houses have sales prices, that is not necessarily what they are going to sell for.  Keep it very black and white.  Don't tell him he's crazy.  Present it all in a very logical manner.  Remember that he is probably coming at it from an emotional standpoint.  You have to come at if from a "this is just business and these are the real numbers" standpoint.

Jim Viens · Answer

Start by going over some of the standard questions from the phone conversation "just to make sure I got the info down right." Make sure you hit on what repairs or updates they think the house might need. I'd ask them again what they think their house is worth...then ask them to explain how they came up with that number. I'd also go prepared with info on actual recently sold comps in the area then gently go over those numbers with them. Something along the lines of "Well what I've found in doing a basic market analysis of the area is this..." Then finish with something like "Does that make sense to you?"

Make it a teaching session. If the lights still don't come on and they won't budge, they're not motivated to sell. Just leave them with your contact info if they ever decide they want to work something out and make sure you ask for referrals.

Alexander Felice · Answer

Adjusting seller expectations will have you walking a fine line between reason, and emotion. People have a (proven) attachment to things they own that makes them think it's worth more just because it's theirs.

@Nat Chan gave you some really good advice. You don't want to go to this guy and tell him his house is worth less because YOU said so, you want the market to tell him that. You want HIM to show you flaws in his house, and maybe even what he thinks it'll cost to fix them. Try to keep the dialogue open, and positive, even if you aren't agreeing. Getting confrontational won't help his, or your situation.

Find out why he thinks his house is worth the number he gave you. Many times people will admit to irrational reasons (that's what I owe, that's how much money I need, that's just what I want for it, etc) but for most people, emotional decisions will beat out their rational mind. You have to win his emotions AND reason.

Either way this will be good learning experience!

Grigory Pekarsky · Answer

One way that you can try and convince them that they are overvaluing their property would be by showing them comparable properties in their area. You could also offer to have your potential buyer sign an agreement where they agree not to buy the property for less than what you think it should be worth, so if the seller won't budge on price, then the deal will fall through. Other ways include comparing other houses in similar neighborhoods or offering incentives such as paying closing costs or even asking your potential buyer if they are willing to pay above market value for the home.

Account Closed · Answer

Don't humor him. Tell him the facts, show him the comps. Then tell him your offer, leave him your business card, and leave. Then use the time you may have wasted by finding better leads.

Barry Herbst · Answer

Hi Tony,

Every seller thinks their home is worth more than it really is. I recommend having comparable sales handy to show your seller. This helps so they're aware of what's sold the past 12 months, and what's currently available on the market, which would be their competition.

Best,

Barry

Ronnie Wilson · Answer

Some sellers think their property is worth more than the market dictates. Does he have a recent appraisal? Make sure to check the comps. Anything more than 6 months doesn't give you a good indication of the FMV now. Good luck.

Bud Leiser · Answer

instead of burning a dead dinosaur to sit in this guys territory i'd hash out the unrealistic price over the phone. If he seems flexible and motivated (hint: you know their flexible when they lower their price) then I'd follow up and walk his house with him.

Did you ask him why he needs to sell? By what timeframe? Whats his backup plan if it doesn't sell in time? How much does he owe? How much is he looking to put in his pocket at end of closing? Will he owner finance in order to reach his price? Why did he choose a batshit crazy price? What is more important his motivation for selling or getting his crazy price?

All of these can be discussed on the magic apple walkie talkies we carry in our pockets. ;)

Nat C. · Answer

Where are you getting your comps from?

Try using Redfin estimate tool. It will give you an options of many comps dating 1 year back in a wide radius and it allows you to pick and choose your comps to suit yourself.

How to approach a seller who thinks their house is worth more than it is?

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