Are buyer and seller objections keeping you from closing more deals? Would you like some fresh ideas for a closing gift or how to overcome objections? I recently spoke at the Greater Boston Association of Realtors and invited the audience to share their best negotiation and business tips. Here’s what these savvy Boston Realtors had to say.
1. I think my property should be listed at a higher price
Colleen Kelly of William Raveis Real Estate went on a listing appointment where every comparable sale was less than the average price per square foot for the neighboring area. Of course, the seller didn’t understand why her house was not worth more.
Kelly did a comprehensive price-per-square-foot analysis for each comparable sale. She then showed the seller that the average price per square foot for her area was substantially lower than that for neighboring areas. She also showed the seller the spread between the list price and the final selling price. This detailed analysis persuaded the seller to list her home realistically.
2. Are they “satisficers” or “maximizers”?
Betsy Boggia of Fairway Independent Mortgage Corp. said it was important to identify whether your clients are “satisficers” or “maximizers.”
In his book “The Paradox of Choice,” Barry Schwartz defines a “satisficer” as being someone who makes a decision or takes action once his or her criteria are met. In other words, if your buyer says he wants four bedrooms, three baths, a specific school district and a two-story traditional that has been recently updated, he will purchase when he finds that home. Moreover, he will feel satisfied with his purchase.
In contrast, “maximizers” want to make the optimal decision. Using the same example as above, a maximizer may really love the house but will want to continue to look until he has seen every other possible option. What is particularly challenging about maximizers is that there’s always another new listing that they haven’t seen.
According to Schwartz, satisficers tend to be happier than maximizers. Maximizers can exhaust themselves in the search process and are unwilling to settle for anything less. Depending on the situation, most people are a combination of both.
Diane Maloney with The Higgins Group Realtors asks her buyer clients a great question to help identify whether they are satisficers or a maximizers: “How many homes do you feel you need to see to make an educated offer?”
If the buyer says, “I want to see everything!” chances are you have a maximizer. This means you will probably have a very long search process.
Rona Fischman of 4 Buyers Real Estate had another approach that could help you deal with the maximizers who need to see everything. Her approach is to ask, “Is there something unique about this house you like and that you would be unable to find in another property?”
If the maximizer can’t find that feature elsewhere, he or she may be more likely to purchase.
3. It’s cheaper for me to rent
Fischman also had a simple way to handle the buyer’s objection, “It’s cheaper for me to rent.”
Rather than launching into a long explanation about the benefits of homeownership, including how owning a home increases your net worth, Fischman asks a simple question: “Something brought you into this office to discuss buying. What was it?”
This is a powerful question since it helps you to understand the buyer’s real motivation.
Chris Thoman of Bushari Group Real Estate uses a different approach. Thoman advises: “Your upfront costs, including your first and last month’s rent, your security deposit and the brokerage fee, could be up to one-half of your down payment.”
Even if the lessee doesn’t pay a brokerage fee, there are numerous programs with minimal down payments. The first and last month’s rent, a security deposit and a pet deposit could easily come close to providing a big chunk of the down payment.
To provide your buyers with additional assistance, check out Down Payment Resource. This service aggregates the various local down payment assistance programs for buyers. They sometimes provide data on which homes will qualify for specific programs.
4. Give a closing gift that matters
Kim Patterson, an agent with Coldwell Banker Residential Brokerage, had two interesting ways to serve clients after closing. In Massachusetts, you can provide your clients with a “property card” to keep with their closing statements. This card shows the chain of ownership, what improvements were made to the property, as well as permits and other salient information. Patterson obtains this card and gives it to her clients after every closing.
Patterson also gives her clients a website either for their home or community. This site would include information about their home, the local community, as well as her personal “team” of resources for home improvement contractors, dog-sitting resources and other types of service providers.
When Patterson sent this, one of her clients shared it with over 300 people.
If you want to increase your business effectiveness, try some of these tips. They work in Boston, and chances are they will work for you.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the National Association of Realtors’ No. 1 best-seller, “Real Estate Dough: Your Recipe for Real Estate Success.” Hear Bernice’s five-minute daily real estate show, just named “new and notable” by iTunes, at www.RealEstateCoachRadio.com.