So you have a property on the market and you’ve finally received an offer from a buyer.
This is when things can get a little tricky.
By and large, buyers will make offers that are below the vendor’s asking price. Now, it falls on you to present that offer to the vendor in a way that makes it seem attractive.
Of course, you won’t do this for offers that are below market value. But if you know that it’s a realistic offer for the market, you’re going to need a little finesse to present it properly to the vendor.
The big challenge here is that a lot of vendors can struggle to come down to market price for their properties.
This then creates delays in the sales process that can affect your whole real estate business. And every extra day you spend on this sale is a day you can’t dedicate to another sale.
I’m going to share the steps to help a vendor arrive at the market price faster that we use with our clients inside our Sales Flow System™ But first, it’s important to understand the issues that arise as a result of vendor delays.
When you can’t get your vendors to come down to market price, you end up with unsaleable stock.
I used to tell my team that there’s a busload of cashed-up buyers driving around the suburbs we work in. These buyers want to visit open houses, and they’re ready to buy tomorrow if they find the right property.
There’s a simple question to ask in this scenario: Is the property you’re selling positioned well enough in the market to cause that bus to stop?
If there are 30 properties for sale in that suburb, the bus will likely only stop at about five of those listings.
If your vendor wants to stick to an above-market price, the bus isn’t going to stop at their property. It’s going to move onto the next one. And this will leave you with unsaleable stock on your hands.
The second problem is that you can start blaming the vendor for the property not selling. You may begin thinking that it’s the vendor’s fault that prevents the property from being sold. They won’t align themselves to the market, and you may start to resent them for it.
However, this is actually a case of pilot error. It’s your job to align the vendor to the market. If you’re not doing that properly, you’re going to struggle to convince the vendor to take a market-price offer.
So, what can you do to counter these problems? There are four steps that you should follow with all of your vendors to help them align with the market.
Step #1 – Understand the Vendor’s Emotional Journey
I’ve gone into detail in another article about the vendor’s emotional journey, so I won’t dig into it now.
But here’s a good analogy. I want you to think about visiting your GP here.
If you go to the doctor for a check-up and they tell you that you have three weeks to live, you’re not going to believe them. But if the GP says that they want to run some tests and see you again in a week, you become more open.
When you see the doctor again, you’re willing to believe what they say because they ran those tests and they have proof to back up their claims.
That’s what you need to understand in terms of your vendor’s emotions.
If you just tell them, out of the blue, that they need to drop their price, they won’t believe you. But if you keep them informed along the way and run all of the tests, you prepare them emotionally.
That means they’re more likely to accept your opinion on an offer when you deliver it.
Step #2 – Extract the Factual Price
There’s a big difference between a price opinion and the factual price. It’s crucial that you understand the difference, or you won’t be able to move the vendors to the factual price that will help get the property sold.
Do the research and present the evidence to your vendors. When you use facts to highlight the condition of the market, it’s easier to present offers to a vendor.
Step #3 – Make Sure Your Vendors Are Talking About the Market (Rather Than You)
At some point, vendors will sit around the dinner table to talk about their property. What you don’t want here is for them to focus the conversation on you. You don’t want them talking about your performance on their behalf.
Instead, you want them to talk about the market.
That conversation needs to focus on the effect that the market’s having on their property. This typically leads to the vendor reaching the conclusion that they’re priced a little too high for the market.
So how do you steer a conversation that you’re not even a part of?
Provide amazing service to the vendor at every stage of the process. If they have no reason to talk about you, they’re going to focus on the market instead.
Presenting the Offer
The key here is to work with your vendor to keep them focused on the market. You want them to see how their prices align with what’s happening out there. This allows the vendor to know when they may have priced themselves out of a sale.
That realisation makes it easier for you to present market-price offers.
Process & Structure Coach
For Real Estate Professionals
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