So much of that initial meet and greet with a potential client is about establishing trust. You don’t have to adopt a defensive stance at common roadblocks or justify why you deserve to get paid a decent commission on all the hard work you do.
Practice a few of the scripted responses listed below, the more natural and less panicked you come off, scrambling for answers in the least offensive wording that escapes you in the heat of the moment, the better. You’ll be calming fears and converting leads in no time.
Ah, the bargain hunters. The hagglers. While good in a craft market in Mexico, negotiating over the price of your commission is a losing game. Some potential clients just won’t budge.
There are however, some things you can say that help make sellers feel they haven’t just been denied, aren’t being heard, and basically, prevent them from having a flashback to kindergarten as they pout you out of their property listing…
The Customer Is Always Right – Right?
Suddenly the seller is an expert on everything because Marge’s cousin’s nephew sold condos in Boca and he says you’re being screwed.
Different tactics can be used on different personality types. In sales, you know that beaten path all too well. You can size up whether a haggler is just a haggler at heart and wants a little back and forth. Most clients just want to feel they are getting the best price.
Much like whatever the client’s wage is in their own line of work, your commission is non-negotiable. You can explain this nicely along the lines of:
Response: “I see how that rate might give you the impression of being too high on the outset – let me break it down in more manageable terms and explain why I can’t possibly take less…”
From here, you can use anything from their ornamental bowl of fruit sitting between you across the kitchen table to basic math:
Response: “say you had ten dollars in your pocket from this sale, well 5 of that would go to the buyer’s company, 2 goes to the brokerage I’m employed at, and 2 would be left for me to cover marketing, and earn my share.
Taking that 2 away just isn’t possible for me to make a living wage at this. I want you to get the fairest market price and I’ll work my hardest to achieve that for all of us.”
Remember these are just people requiring a service they themselves cannot do (though some may be convinced they can – and better) and you are just the person to provide that expertise. Once they understand they are in good hands, payment becomes less of an issue and you can do your job while they stick to theirs.
BONUS POINTS: You can point out your lack of floundering on commission fees equates to your strongest negotiation skills when and where they are needed most.
Explain that if other agents they’ve interviewed have expressed their eagerness to cut commission, then how do they perceive that same agent holding up in difficult back and forth negotiations over getting the best price on their home?
Response: “I know my value as a realtor and anyone I do business with understands that. This translates directly into my negotiations. I will go to bat for you with full confidence, not with discounted do-anything-to close-a-sale compromises.”
As attractive as that high asking price is, buyers will not view a listing if it is overpriced. Let your clients know that you understand their home is one of their most valuable assets, and that the true value exceeds any number.
An address their children took their first steps in, where many memories were made can be a sensitive thing to put a dollar sign on.
Response: “There are plenty of people around who will tell you what you want to hear and stop at nothing to get a signature on the dotted line. A lot of agents you’ll come across, don’t have many listings at any given time.
So, they are desperate to sell you on their services and say anything to win you as a client.This sweet talking and high pricing may seem appealing now, but isn’t so ideal in half a year when you still haven’t received a single offer.”
Ask them to shift focus from maximum asking price to maximum leads and interest potential.
The DIY approach. Comparable to the self-represented defendant in court. While admirable, and seemingly cost effective, the success rate certainly plummets.
Response: “I don’t want you to underestimate the amount of legal paperwork selling your home involves. Most of my clients have lives, kids, careers, etc. They opt to pay a professional not only to handle it, but to make sure it’s handled correctly. That peace of mind can’t be priced.
Simply showing your house and shaking hands is only the beginning, setting the proper paperwork in motion and ensuring a deal is closed properly is highly important.
To be clear, this isn’t merely the volume and grunt work of filling in numerous forms – this is the legal variety of paperwork, where risking a mistake means risking a lawsuit and holding up the selling process.
Most agents don’t like to gamble with their business transactions and won’t often deal directly with you because of that. They want the best for their clients and won’t show them properties that aren’t listed by professional agents. They don’t want to risk getting sued over all the many legal aspects that could easily be overlooked in this process.”
Remember to side with them, and agree it would be an ideal scenario aside from taking on the work and stress, the risk of legal action is just not advisable.
BONUS POINTS: You can also point out that they are paying for a suite of active marketing services you and your firm provide that cannot be compared to placing an ad in the local paper or hoping someone looking to buy drives by and sees their For Sale sign at the right time.
This ties into the other common challenge listed in #2. Clients often want to “Price and Pray” away their property. While being Pollyanna about it in any economy is great, it’s important clients understand what that first price means to other agents.
Response: “I understand your thinking behind this. Your home is your most valuable asset and it should be priced accordingly. Being in the business as long as I have, I’ve learned a lotabout the psychology behind what other agents believe about an initial listing price.
Take me for example, when I review potential listings and see an overpriced property it tells me the owners aren’t in a hurry to sell, and if my clients are, then I won’t bother even showing them a listing like that.
I want agents to consider this listing, and take it to their clients with enthusiasm, not apologies and warnings that it may be a complicated slow transaction that could take months or years. In all honesty, from an agent’s perspective, the higher a property is first listed, the less a seller is interested in having it sell.
Reducing price later is often too little too late when most agents have stopped paying attention and won’t even realize we’ve come down in price.”
To that, many client’s will argue it’s part of your marketing obligations, explain that while that is true in theory – considering the sheer volume of marketing, flyers, notices etc. agents receive, the odds of yours getting lost in a heap are high.
If agents do notice, they’ll recall the original asking price and perceive you as a trouble client with a lot of demands and unrealistic expectations.
Pricing right from day one, means more agents deem it as the worthy listing it truly is, and are eager to show plenty of clients, maximizing exposure and chances of selling.
BONUS POINTS: Consider pointing out that by the time they might agree to come down in price, many potential buyers will have closed a deal elsewhere. Delaying the whole process and lowering chances of selling at all.
While it may be tempting to punch a hole through the nearest overpriced wall at hearing this, remind clients as kindly as you can that in this type of economy, any offer can be a blessing. And that while of course, waiting and turning down potential buyers is their choice, it could mean another half a year or more before they hear from anyone else and at that point it’s likely to be an even lower offer.
While it’s hard to convince someone something they value is worth less than they want it to be, remind them it’s your job to be honest and ultimately to sell their property.
Assure them that if you truly believed a higher price was possible, then you’d be the first to champion for that, however long it took because it would be in your best interest too – not only by making them happy customers, but winning you a higher commission.
Remember to address client concerns with genuine listening and well thought out responses. While they might respond emotionally, you know the ins and outs of these common complaints and can come prepared with the right answers.
The more comfortable and justified you can make your client feel in their hesitation, the more they will trust your judgement and look to you for guidance.
Building trust doesn’t happen over a handshake, but if you can respond to these common roadblocks with calm collectedness, establishing yourself as an authority in your industry, a steady stream of clients will always be in abundance.