Residential Real EstateHow To Sell Value
Some houses sell themselves and others require some salesmanship.
Let"s face it - if all houses could sell themselves, what would be the need for real estate professionals?
Realtors get spoiled in good times when the momentum of seller"s markets help move even the most stubbornly undesirable homes. Sometimes they forget that sellers need their help to move less-than-perfect homes, or homes in lower price ranges. After all, isn"t that why a seller"s agent agrees to share commission with buyers" brokers - to attract other brokers to show the home?
But offering a commission isn"t enough to get homes sold sometimes, particularly in buyer"s markets where marketplace fears make buyers skittish. What"s also needed at times like those is skill at overcoming objections.
For example, you may have a buyer who would like a new house with three bedrooms and a yard, to spend less than $200,000, and still be close to downtown jobs and shopping. In your town, the only houses of that description that can be found are older, and perhaps unimproved. Yet the buyer wants new, and new means going 30 minutes out of town for a grueling daily commute in traffic. It also means possibly losing your buyer to a builder"s agent, or another Realtor.
Your concern is to meet your buyer"s criteria, but one or two items on the wish list make fulfilling your buyer"s dreams next to impossible, unless you can test your buyer"s resolve with some ideas. Your job is to find out which criteria is written in stone - the number of bedrooms, the price, or the fact that a home is new? To soften the buyer"s thinking toward accepting other solutions, you introduce the idea of buying an older property and updating it....
That brings us to an ethical question - when and how should a real estate professional try to overcome his/her buyer"s objections?
International real estate investor Dolf de Roos advises, "They should overcome the objection, but stick to reality. Tell the truth. Be honest. You can"t say this house doesn"t have a kitchen, but that"s a benefit, but you could say, "Look, they didn"t finish this house, but it is $200,000 under market value. You can add a kitchen.""
To do this with confidence takes skill and experience. A seasoned real estate professional who invests in properties, or has sold many homes, may know generally what improvements should cost. He or she may have a number of trusted contractors and contacts such as kitchen designers and interior designers who can help a first-time buyer get through a remodeling project with as little stress and expense as possible.
But in today"s market, real estate professionals are growing like mushrooms and they have less experience than necessary to be able to overcome objections. The National Association of Realtors has announced that there are over one million members, and there are another 1.4 million licensees. But many of these newcomers haven"t been trained to sell, and they don"t know how to overcome objections like a seasoned professional.
"What we are facing is a lot of new Realtors coming onstream and you are getting great people and not so great people," says de Roos. "That makes it difficult for them to know how much attention they should pay to a buyer"s criteria."
Suggests de Roos, "People often don"t know what they want. I want to deal with people who tell it like it is. I may say I want a single-story home with a pool, and they might show me a double-story house with a pool, but there"s got to a limit, or otherwise we are playing too many games."
So how does a Realtor know when they"re hearing a real objection and one that can be overcome? "You can tell by the tone," advises de Roos. "It is halfhearted, or it is a weak objection such as "I don"t like the color of the carpet." Other objections are serious like "It"s too hot in the city, I want to be in the country."
To find out, Realtors have to learn to build rapport with their clients. "Be genuinely interested in other people," suggests de Roos. "Ask yourself - what does this client want? If I can find it for them, they"ll refer me to their friends. I"ve found that the ones who do well at real estate are the ones who love their jobs, love people, and if they don"t like them they can relate them. It is the commission-focused ones who talk people into buying anything."
To be trained in the art of selling, says de Roos, is to be trained in interpersonal skills. "How to relate to people, how to follow up a call, send a thank you note," says de Roos, "those sorts of things make a huge difference and the best one to have is listening skills. Few have learned how to listen."
What can really build a new agent"s confidence is the same thing that builds an experienced agents" - familiarity with comparables. Not just what can be found on the Internet, but what can be observed in the neighborhood in person and over the years. Keep up with trends. That house that sold for under comparables was perhaps snatched up by an investor. Did it reappear on the market at a significantly higher price? Did it have a number of updates? You can show your buyer examples like these to encourage them that their remodeling efforts can be rewarded at resale.
"Let"s say the kitchen is awkward with no windows," supposes de Roos. "What they want to know is what can be done. You point out that the kitchen is awkward and that is reflected in the price. "You can take this property at a discount and remodel at more than you would have spent, you will get the kitchen done and make money on the home. The cost of doing the kitchen will be less than the increase of value of the property as a result of renovating the kitchen.
You"ll spend $30,000 doing the kitchen but the value goes up $70,000. These things are possible by spending moderate amounts of money."
He advises, "You will always get a spectrum of people and Realtors have to do a good job. Just satisfy a lot of clients, and you"ll make a lot of money and have a blast."