If there’s one thing you can bet your money on in this economy, it’s that people are looking to save money. Drive by Nordstrom’s then swing by a Goodwill store and see which parking lot has more cars.
You can’t really blame people. Times are tough for many. But regardless of what kind of economy we find ourselves in, or what the Dow Jones is doing, or who’s announcing layoffs, you can rest assured of this fact: consumers always want value.
And no matter what the product or service, value reigns supreme. That’s something I want you, as a real estate agent or broker, to never forget, because that’s the only way you’ll be able to save your commissions when a potential client wants you to lower your rates. Believe me, they’re not paying top dollar because they like the way you look or the kind of car you drive or because you support the local little league baseball team.
Plain and simple, they want value. And if you can show your value, you’ll be head and shoulders above the competition. If they don’t see the value you offer, one of two things are going on: 1. You haven’t done a good job of explaining your value; 2. You’ve met a consumer who won’t listen to reason and that means it’s time to move on to another prospect. Don’t waste your time.
But more often than not, if you communicate your value in the right way, you’ll protect your commission.
So how do you share your value? We know emotion sells, but with those concerned about price, flat out objective evidence – such as numbers – often does the job.
One technique I like to share with my clients is to explain your value in terms of cold hard cash. This only works if you are indeed worth your salt in your marketplace. That is, if you’re landing selling prices at or very near asking price.
If that’s the case, hammer this point home by telling the seller what that average is. Let’s say your listings sell on average for 98 percent of their asking price. Simply ask the seller if he wants to get the most money from your property. Of course he does. Then explain what the average agent yields – let’s say 95 percent or even lower. That way you can explain that by paying you only one percent more than he wants to, he actually make 3 percent more on the sale. Then say something like, “That’s like me paying you a 2 percent bonus, correct?” They have to agree.
What you’ve done is clearly demonstrate your value based on your experience of past transactions – that you’ve delivered a better price for the homes you’ve sold. You may be asking for a higher commission, but the price you get for the seller more than makes up for it.
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There’s no excuse for not knowing average days on market, list to sell-price ratios, home amenities and all the other basics, but it also helps to know, for example, a buyer’s motivations (are they moving with a job, do they like the school district, etc.).
And it all really boils down to being informed. I can tell you without exception that the person who always wins in a negotiation is the person who has the most information -- and who uses it wisely.
Best of luck to you!
Bob Corcoran is a nationally recognized speaker and author who is founder and president of Corcoran Consulting Inc. (, 800-957-8353), an international consulting and coaching company that specializes in performance coaching and the implementation of sound business systems into the residential or commercial broker or agent’s existing practice.CorcoranCoaching.com