Blog / Vendor Management
Lee Woodward, The Psychology of Fee objections
All real estate professionals are regularly confronted with the dreaded fee objection, often several times in any given week.
The solution to this problem is not simply a quick script, such as: “If the agent’s going to give away their own money, wait till they get their hands on yours!” While this script has value, its impact is lost due to its overuse. Rather, your influential power arises from your ability to convey the difference between an amateur and a professional to the client. Our suggestion is to incorporate a third party story or metaphor that clearly demonstrates your knowledge, beliefs and intention to the owner, without attacking or naming any competitor.
Sample Script 1
(Note you should emphasise the words in CAPS)
Sam: “I hear what you’re saying Phil, but is there any way you can lower the fee so we can get things started?”
Phil: “Sam, I appreciate you ASKING that question, but your objective - and correct me if I’m WRONG - is to leave here with as much money as you can. By being offered a CHEAP rate, it can make you believe on the surface that you are going to achieve that objective. HOWEVER, one thing that is known about salespeople, especially in real estate, is that we all possess a series of HABITS. One of the most DESTRUCTIVE habits for salespeople is their tendency to panic when forced into a corner. A salesperson, who has dropped their fee, is doing so as it is their only resource to transact a DEAL. Meaning Sam, they want to win your business and the shortcut to doing that is to cut the PRICE, yet all we are really seeing is someone who PANICS. This happens a lot in my industry - that the owner engages such a person. However my only concern for YOU is that if you put this type of agent with those types of negotiating skills in front of your best BUYER who makes an OK offer but not the maximum, well they may just panic again and tell you that’s all you are going to get. I can assure you and demonstrate to you that I won’t PANIC $10,000-$20,000 short of that premium price that we may have been able to achieve for you. Whatever you choose to do, I'll back you, HOWEVER, I would like you to remember that my team and I are only rewarded on a PERFORMANCE FEE basis, meaning if we don't get a result that you are happy with, you don't pay me. This also means we are part of your PROFITS not your expenses.”
(Allow the client to respond and then sign off)
Phil: “Sam, there is no need for you to panic and RUSH to get a cheap rate, which will inevitably result in a lower sale price. You have put a lot of time and effort into your property and we have to make sure it is a PROFITABLE move on your behalf. You don't want to give it away!”
This is just one example of an effective script for fee objection. The use of a metaphor is also highly influential for this specific challenge:
Sample Script 2
Phil: “Sam, I can understand your feelings on this price difference, however, let’s imagine you’ve decided to renovate the property and add a second storey. You’ve had the plans drawn, the specifications for the materials have been determined and it’s been approved through council. You then decide to bring in two new builders to quote on the exact same job and construction standards. Why do you think there would be a discrepancy between the cheap tradesman and the CRAFTSMAN?”
(Vendor’s Response)
Phil: “You're right! It’s an issue of QUALITY. Sure the building may look the same when COMPLETED - the windows look good, it has nice architraves, everything looks right; until the day it rains, and water starts leaking through the top part of the window where it wasn't properly FLASHED. The CRAFTSMAN has the skill of using lead and flashing which he CURVES back into the cavity, whereas the CHEAP BUILDER just bangs it in, thinking it will be OK.
The same can be said for real estate. The window displays, newspaper advertising and open for inspections may all look the same, however it’s a known fact that when CHEAP agents NEGOTIATE, tens of thousands of dollars may be LEAKED out of the sale due to their inability to do a professional job. As we all know, you get what you pay for. Sam, do you want a CRAFTSMAN or a cheap agent?”
← Go back
