You have a listing lead and have just scheduled the appointment. How you proceed once you are in front of the sellers will determine whether you obtain the listing. Are you taking the right steps to ensure that you get the best possible results?
Price
A few days ago I was leading a “new agent” coaching call on how to price properties on listing appointments. One agent said her manager recommended completely filling out the listing agreement — including the price — prior to the appointment. She was to then hand the completed listing agreement to the seller at the beginning of the appointment.
The group’s reaction to this approach was universally negative: “I think that’s very arrogant,” and “I would never list with someone who had already determined the price without even seeing the house.”
This approach is an old technique that originated in the “hunt ’em, tell ’em and sell ’em” school of real estate. You must hard close the sellers to accept the price you choose. The truth is that even though you may be the real estate expert, no one likes being told what to do with their property without their input.
A secondary problem with this approach is that it creates a win-lose situation. If the seller agrees with the agent, then the agent wins. If the seller disagrees, the agent loses because they have set up a confrontational situation at the beginning of the appointment. Agents don’t like being told they’re wrong any more than sellers do.
The goal is to set up a win-win for both parties. The way to do this is to view your role as a conduit of information. In fact, a great guideline to remember is: “It’s not your house, it’s not your mortgage, and it’s not your decision.” Instead, you are a resource that your clients can rely upon to help them to make a great decision. When you take this approach, virtually all resistance melts away.
In the case where the sellers are unrealistic about the price, you always have the option of standing up, thanking the sellers for their time, and wishing them the best in getting the price they want. When you are willing to walk away, many sellers will relent on the price. If they don’t, you have saved yourself a lot of time and money marketing a listing that won’t sell.
Commission
When a seller asks you to reduce your commission, it means that you have not illustrated your value. The challenge with this situation is that you are immediately placed on the defensive. As in the example above, the moment you go on the defensive, you are usually in a losing situation.
A better approach is to demonstrate your value before the seller ever has a chance to object. For instance, you can prepare a premium marketing plan that outlines a minimum of 10 services that you (and/or your company) provide that most other brokers don’t provide. Even if your competitors do provide these services, most agents don’t ever explain them. This means that if the sellers are interviewing other agents, you will still win since the other agents are not normally prepared to have this discussion.
Another way to differentiate yourself is to provide a 90-day marketing plan that outlines exactly what you will do to get the seller’s property sold. Once you provide the seller with the list of all the services that you offer, you can then ask, “Which of these services do you want?”
In most cases, the sellers will want all of them. If they still ask you to lower your commission, avoid becoming defensive. Instead, ask a simple question:
“Mr. and Mrs. Seller, this is our premium marketing plan that will provide you with the maximum exposure to the marketplace that will help you net the highest possible price. If you would like to pay a lower commission, I will be happy to refer you to a limited services agent.”
No one wants “limited service.” Avoid using the word “discount” because discounts are considered to be a negative rather than a positive.
In the case where the seller says, “Well the other agent from your office offered the same services and was willing to charge us $5,000 less in commission,” a great way to handle this objection is to avoid being defensive. Instead, ask a question:
“Mr. Seller, in order to achieve the highest possible price for your property, you need a powerful negotiator, wouldn’t you agree?” (The sellers almost always say “yes.”)
Continue by saying, “If I can’t even negotiate a full commission on my own behalf, how effective do you think I will be in helping you to negotiate the highest possible price for your property?”
The key to winning on listing appointments is to be a conduit of information, ask plenty of questions, and avoid being put on the defensive by always remembering that it’s the sellers’ house and it’s their decision.
