Business
This is a very common misconception sellers have when listing their home for sale. Time on the market is the #1 enemy for a seller. Historically, we know the longer a home sits on the market for sale, the softer the price becomes. In this episode, I want to share one approach that's worked well for me in these situations. Should you decide to incorporate this into your business or not, the main purpose of discussing this is to be sure you have your go to script, plan... whatever you prefer to call it. Our ability to effectively deliver our responses to common objections such as this can be the difference between a listing taken or a listing sold. Let's list some of the things buyers think when taking into consideration the length of time a home they're interested in buying has been on the market. Of course, it depends on the market conditions, this will be applicable in any market and especially effective in a predominantly seller market or neutral market. Let's first look at a home that's been listed for just a few days. Buyer's thoughts: I need to act fast. There may be multiple offers. The seller is less likely to be flexible on the price. I wonder if any offers have already been submitted. All set the buyer up to have urgency, take action and make a strong offer. Now lets list some of the common thoughts that come to mind when a home has been listed for, say, a few months. Buyer’s thoughts: Is there anything wrong with it? I bet we can get a better deal. I have time to think about it, let’s see some other homes before making a decision. All of these don’t encourage urgency and leads the buyer to make a lower offer. Let's set this up. Here's the keys ideas you’ll want to keep in mind: Know your outcome - the objective is the seller comes to realize that pricing right from the start is the best choice. With that in mind, learn how to ask questions that will lead them to this decision. Selling is not telling. If you don’t believe it, neither will they. The conversation. Seller: It looks like we need to price it at about $350K, so let’s start a bit higher and leave room for negotiation, let’s start at $365-370K to so the buyer can feel like they got a better deal. Agent: I can understand why you would feel/think this way. It’s normal, after all when we go to buy something, it’s only natural to want to get a better deal, right? Seller: Yes Agent: (Name), if asking a higher price would end up actually causing you to lose money, or in the end walk away with less profit...you would want to know that … wouldn’t you? Seller: Of course, I am not sure what you mean. Agent: Let me explain. Let’s look at this scenario...a buyer looks at your home and they are excited, they want to make an offer. What do you think is one of the top questions a buyer asks their agent about the listing? They already know the price, the size, beds/baths etc. What would you think it would be?? (The answer we are looking for is “how long has it been on the market”. We are handling this like the TV game show The Family Feud. Allow the seller a few attempts at coming up with the answer themselves, if they’re struggling, praise their effort and let them know the answer we’re looking for.) Seller: Is there any offers? Agent: That’s a good guess and yes buyers will ask that, what else? Seller: How long has the home been listed for sale? Agent: That’s it! This is the one that is most important...here’s why. Let’s look at 2 scenarios…A The buyer asks their agent “how long hasit been on the market” and their agent says “2 days” what do you think the buyer’s mindset is likely to be? Seller: Well, I would imagine they’d be thinking they need to make an offer quickly. Agent: What else? Seller: Ummm. They better make a strong offer because it just came on the market. Agent: Yes! That’s exactly what we want them to think, correct? Seller: Yes, that’s right. Agent: Ok, let’s look at scenario B. The buyer asks their agent “how long has it been on the market” and their agent says “62 days” what do you think the buyer’s mindset is likely to be? Seller: What’s wrong with it? Agent: What else? Seller: I am going to get a better deal. Agent: What else? Seller: Why didn’t anyone buy it yet? Agent: Exactly...so...this is what I am talking about when I mentioned if you knew that asking more to leave room to negotiate could actually end up costing you money, not making you money...and you want to maximize your profit, right? Seller: That’s right. Agent: So, (name) what is the most dominant thought you want your buyer prospects to have? A. I better make an offer now and make it a strong offer because if I don’t someone else will...OR B. “Let me think about it..if I do end up making an offer I am going to come in low to see how good of a deal I can get.” What thought do you want them to hold on to? A or B? Seller: A Agent: You’re right, I would pick A as well. So...based on that...what is the best price... based on the facts that will cause a buyer to choose to make an offer on your home vs. the competition? Seller: I guess we better price closer to the mid $50’s...let’s go with $355K Now, this isn’t going to work perfectly or every time I have found this to be a very effective way to help the seller self-discover how to make the right decision and price it right the first time. The key here isn’t taking my words exactly as I said them and try to be me…(unless that works for you). The idea is to grasp the concept of this conversation, practice it at first by reading it...then try doing this with notes in hand and attempt not to look at your notes if possible and eventually run through the scenario freely from memory. Always keep in mind we need deliver this as if it was the first time you’ve ever said it won’t be as effective.