Breaking the stalemate

Most agents have faced the listing stalemate where a potential seller decides they want to find a property to buy before they will list their current home. Mark Dwyer’s 4 Steps to a Successful Sale method can overcome this barrier. Here, Mark shares the actual dialogue from one of his Sales Trainer support interactions.

Hi Mark,

I am dealing with a number of sellers who want to find a property to buy before they list. I have recommended that they list first in order to obtain a contract to position themselves for better terms on their purchase property, but this doesn't seem to get them to list straight away. Is there an action plan or something similar I can use to get the listing ASAP? Please advise.

Thank You

Karen

Mark’s advice to Karen

It is a common desire for many property sellers to find a home to purchase before listing their property for sale. This scenario presents a financial risk for the seller and can be frustrating for the salesperson wanting to keep their listing inventory productive.

We know it can often take longer to secure a buyer for a property than it takes an owner to find a home to buy. But as I say, don't get frustrated instead simply remain fascinated! Why on earth would someone want to buy before selling? The risks far outweigh any positive aspect of finding a place to buy first.

Here is a list of points you could make that should allow common sense to prevail.

Listing is not selling: This is the best place to start. Many owners confuse the act of signing an agency agreement as a commitment to sell. It is as though by agreeing to place the property on the market there is an obligation (to you) to follow through and then sell the property. 

I explain that there are two agreements they will sign; the first is an agency agreement. This is simply an authority for the agent to begin searching for a buyer and irrespective of whether or not a buyer is found it does not represent an obligation to sell. The second agreement they will sign is an agreement to sell. This will be signed after a suitable buyer is found and only on the premise that the seller has found a suitable property and secured an opportunity to purchase. This is best demonstrated by the 4 Steps to a Successful Sale (I changed the naming from what was called, many years ago, the Mrs Simpson Method.) A presentation copy of this is available at www.salestrainer.com.au in Sales Trainer Aids (under the life-ring icon). Basically it says this...

1. Find a Buyer

2. Find a House

3. Match the Prices

4. Buy Home/Sell House

This demonstrates that the first step is locating a buyer and the point is that this takes time. Whilst this is taking place the seller is looking for a property to buy which is the second step. We only move to step three when the first two are complete and we by no means move to the fourth (which is final commitment that they're afraid of) until the other three are completed satisfactorily. In any event this demonstrates the plan that has the least risk!

Fast forward their thinking: Another way of laying out the plan is to suggest how they would be if they did find a property they really wanted to buy. How would they feel about perhaps missing out on it given that they were not 'at the ready' to sell? Many owners think in terms of 'what happens now' instead of 'what happens next' and if they need to sell in order to buy, the all important buyer may elude them should they find something they want to buy.

What if?: The art of paradox is a brilliant technique to employ. The seller in this situation is thinking, “What if you find a buyer and we have nowhere to go?” You simply turn this thought around in paradox ie “What if you find something you want to buy and you can't go ahead because you have no buyer?”

The risk versus the return: I explain to a seller that my highest priority for them financially is safety first. Buying before selling is a risk that is best left alone since there is no financial sense in owning two properties, not even for a day let alone a month or two! Finding a buyer before committing to a purchase represents no financial danger... and if we're to act on my advice, it is the best way to go!

Timing restrictions: Another concern the owner may have is timing. They assume that you will find a buyer quickly or readily whereas finding the right home could take some time – so in some ways the reluctance to list is their way of controlling the timing. I explain that the opposite usually occurs should they find something to buy first even if a delayed settlement period is agreed to they are still inevitably 'on the clock' once they agree to purchase without selling and far from controlling the timing it will, in reality, be controlling them – with pressure!

Competing buyers: You could also suggest what might happen if they find something they really want to buy and so too do other buyers! In this situation if they then need time to sell and the other competing buyers do not then they could be at a disadvantage when competing in negotiations to purchase since the other buyers are 'ready to go'.

I'm OK with “no”: A major reason for some sellers is the obligation they feel to sell if you put the work in to find a buyer – they then feel pressured to sell. I simply explain to these sellers that this is a risk I commonly take every day with my clients and that I am perfectly OK, should they decide not to proceed if a buyer is found and they can't find something to move to. I usually say that this is my risk and that by not getting the property listed we can't explore the possibilities. I'll say, “I am OK with ‘no I don't want to sell under those conditions’, but I am not OK with not allowing the market to show what is on offer.”

Better sales price = more buying power: I'll always point out that a better sale price results when there is no pressure on timing. The more time you have, the better the options and the better the sale price you achieve, the more you can afford on your next purchase and this could mean a better property. This all starts by listing and finding a buyer first – so list now!

Similar case studies: As I say, the best listers are usually great story tellers. There are far more disaster stories where property sellers have bought before selling than successes. And I am certain that you can relay many stories where sellers have followed your direction by listing first, then selling and buying with no financial disadvantage in a comfortable time frame – tell those stories!

Focus on motive: Quite often the reason for distress around this issue relates to some aspect of their motive – timing with a job transfer, secrecy with relatives waiting for a specific property to become available. These are a classic example of us as salespeople having not listened and focused in on motive. Professionalism is care and honing in on their needs is representative of this. When the client is hesitant to list, bring it back to the motive and keep asking that probing question...why?

Keep up the communication: In any event sellers who hesitate to list are still deemed Gestation Sellers so be certain to keep the frequency of communication consistent and varied with letters, monthly sales results and perhaps SMS message results in real time. It is sometimes simply a case of 'wearing them down' until they submit.

Mark Dwyer leads the team at Sales Trainer Active – a subscription based service providing Real Estate agents with real time sales support, superb live and recorded training, web-based sales tools, aids and resources as well as a platform for interactive, competitive recognition. Check it out at www.salestrainer.com.au/active.