Overcoming “We Won’t List – Until We Find a Home”

In my entire career, if there’s one constant source of frustration for both the agents and every lender is a seller saying” we won’t list this home for sale – until we find our next home.”

And that objection is very easy to understand and a valid point of view.

I (personally) want ice cream to come in the mail, for it not to make me fat and my girlfriend to then serve it to me every morning. Has yet to happen!

So, the dilemma for every “would be” listing agent is; how to overcome this universal objection.

Below is a list (courtesy of Inman) of EVERY response an agent can counter to put their seller’s mind at ease. Responses are in “italics”

Inman does not list an author for the following post as is it is a survey of the most common seller’s objections.

Inman: Ways to Deal With

‘We Won’t List Until We Find a Home.”

Recently, Inman surveyed readers for their best responses to sellers when they say: “We won’t list until we find a home.”

Inman readers (your colleagues) shared a laundry list of ways to rectify it.

There are 38 responses, and you will probably need to memorize them all as that’s how intense their fear is!

Inman’s readers also suggested a number of workarounds, including particular contingencies, bridge loans, and renting.

Editor’s Note: For lending on a  primary residence using “bridge loans” to buy another home before a seller’s current house is sold, it is a myth.

Why? Just for starters: How many of your clients can qualify for both homes (no rental income for the house getting the bridge loan; and has enough of a down payment for the new home, with no seller proceeds available from the sale of their current residence home). Virtually none!

Secondly: “Bridge loans (aka “hard money” loans) are NOT an option for buying ANY primary residence due to “Dodd-Frank”.

Here were some of their favorite responses to this common objection.

“Then you might sell your home for less”

1) If you wait until you find that perfect home, you might have to sell your home for less for a “quick escrow” because you don’t want to lose the house you found.

2) Unless you are able to buy without a home sale contingency, having your home ready for sale and on the market is critical to secure your next purchase.

3) Our listing agreement encompasses that prep time, getting photos, staging if necessary. Don’t you want to know what you will have to work within the sell-side?

4) Making an offer contingent on selling your home puts you at the bottom of the heap in the event of multiples buyers.

Similarly, you will be in a relatively weak position when negotiating your own sale price as well as when dealing with repairs/appraisal, all due to the pressure from timelines you invite by entering into a contingent purchase.

Consider Unconventional Contingencies

5) You can list now and require the buyer of your home to include a seller condition. Their offer is contingent until you find a home.

6) Encourage listing their home and assure them that we can counter with a reverse contingency if we receive an offer.

We can make the contract contingent on the seller finding a suitable property by a specific date that is agreeable to the buyer. If they don’t find a home, then we can terminate the contract.

7) Put a contingency that the seller must find an acceptable replacement property, and the buyer will adjust contract dates accordingly.

8) Tell the seller they can require a “seller kick-out clause” in any negotiated contract allowing the seller to terminate or extend the agreement if they cannot find a home within “X” days of the agreement date.

9)  List your home; in the listing, we state that “the seller is on the hunt for their replacement home and would like a post-closing occupancy agreement otherwise known as a “rent back.”

This allows the seller to stay in your home for up to 60 days while you contract your new home. Some buyers may be in a similar situation and would be flexible on their move-in date.

10) Tell your seller they can list their home and look for a home by putting a Hubbard Clause into the sales and purchase agreement when they find a home to write an offer.

This gives them the time needed to sell the home while holding the home they want to purchase.

Putting Yourself in Your Future Home Seller’s Shoes

11) Let’s look at this from a seller’s point of view;

We’re in a seller’s market.  Whose offer is better? Someone puts an offer on your home but needs to sell first and hasn’t even put their home on the market vs. someone else comes along and already has theirs under contract.

Which is the more compelling offer?     

12) If you find a property, we will need to put in the contract that the purchase is contingent on your present property’s sale and closing.

13) If the sellers see you haven’t listed your property, they will reject your offer.

14) You need to be a strong buyer; you aren’t one until you get your home into escrow.

15) When your home is for sale, what would you say to a buyer with a home to sell?

16) Most sellers will not entertain an offer from you until you have your home on the market or under contract.

17) If you find a home that you want to offer, and you need to sell your home to purchase another, most sellers in our market may not accept your offer.

18) In fact, on average, many sellers not only want to know you are listed but might also insist you are under contract for your own sale to accept your offer so that it minimizes their own risk. I would advise you to reject a contingency should we receive one when you list.

Renting is an option

There is always the chance they could rent back from the new owner in the interim.

19) Do you have someplace to go temporarily once we sell your home? If so, this would put you in the strongest position when looking for the perfect home.

20) Most sellers won’t take your offer if your home isn’t even on the market, and your mortgage requires you to sell. It’s better to sell and have your equity available to purchase right away.

21) You can also rent, so you don’t go out and purchase the wrong home. You also don’t want to hold the buyer of your new home hostage.

You need to be ready to move quickly

22) The seller of the new home you have in mind won’t wait for you to list and go under contract when other ready and able buyers are out there.   

23) If you find your dream home, you should be ready to move quickly, and that might mean having your home listed. By then, it will be too late.   

24) I would strongly advise against that. Do you think that a seller will be willing to wait for your home to sell if they are getting other offers?

Your best option is to sell first, then buy

Sell first, and you’ll know exactly how much you can afford

25) How do you plan on buying the home of your dreams without an offer on your home?

26) Wouldn’t it be easier to negotiate an agreement knowing exactly how much equity you have in hand from your current home sale?

Picture … losing

27) So how will you feel when you find your dream home, and it’s now contingent on your home sale, and another buyer comes in and buys it out from under you because they don’t have a contingency?

28) If you’re good with losing a home you love, we’ll wait.

29) You reduce your chances of getting that home when you find it because a seller isn’t often willing to wait to sell their home while you get yours listed, marketed and sold.

30) They’ll sell to the buyer who is ready. And unless you’re going to buy cash or don’t need to sell this house to buy, you’ll lose out

You can always turn down offers on your home

31) List your home, be aware of what’s out there, and the minute you receive an offer, your agent should know if any of the currently available properties match your criteria; and if there are none, you can decline the offer.

32) You could do that, but what happens if we don’t find a buyer right away? 

33) The best way to get this to go smoothly is to list your home first, and when we get an accepted offer, we can hit the pavement on finding your next forever home.

OK, but that could be expensive

34) If you are comfortable owning two homes at the same time, this is an acceptable strategy.

35) If not, let’s put your home on the market while continuing our search for your next home. As the seller, you have control of terms and timing, and we can negotiate them to fit your needs.

Will you buy in cash?

36) Do you need the proceeds of the sale of your existing house before you can buy another one? 

Let them learn for themselves

After counseling, if they insist, work with them through the process to allow them to see how it works. Losing out in the home of their dreams can be a tremendous lesson.    

37) Let’s find a home and attempt to negotiate to make your contract contingent on the sale of your present home.  

If they insist on not listing before finding a home, they need to have their home “listing ready” when they find a home to move quickly.   

But let them know that they may lose out on a home to other offers because their home isn’t on the market already.

After losing in a few offer battles, they may change their minds and list.

38) It can be done, but it will be challenging…

 The first question I ask Do you need to sell to buy?

Often you get a simple yes/no response, but with modern financial tools available, it warrants a deeper engagement with my financial resources.

If no, then great; validate that they have the resources they think they have, and go over the risks related to a property selling quickly or not.

Then we look at the “worst-case scenario” of selling first and how they can be mitigated by delaying closings, staying with family, or short-term rental.

It’s always challenging, but it can all be done with minimal disruption with the right agent and plan.