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Professional Words, Lee Woodward


Professional Words, Lee Woodward

Instead of clamming up when faced with vendor or buyer objections, there are winning words real estate agents can use to prove they are the consummate professional at all times.

Real Estate Institute owner and founder Lee Woodward has prepared a list of questions asked by real estate agents he has worked with, and provided the answers needed to avoid your mind going blank at the wrong time.

Q We are the biggest and best agency in our area with over 50 per cent market share, but a competitor is offering a flat $4995 + GST commission. Even though we can explain why we are the best agency, a lot of the vendors still go with this company on price.

Lee Woodward This is an interesting one because you’re holding such market share, which means the consumer is obviously thinking all houses sell. What I would do is break it down and I’d say:

“The other company is offering you that deal because there’s really nothing else. They can’t offer you the same size company or the same level of marketing; all they can really do is say ‘we’ll give you a cheap deal’. That’s attractive to you as an owner, because your objective is to sell this house and move on with as much money as you can.

“But this is where the challenge comes in - the other company is stating a price you will receive, as if it is the same as the price you would receive from our company. With a 56 per cent market share, over every second house in the area is sold by us.

“They’re stating price, but we’re creating price. We couldn’t create that price without the level of marketing, amount of sales people, all the cars we run and being the agency that creates those results. You can’t just replicate that with a cheap deal.

If there was a shortcut to do it, we’d all do it, but there is no shortcut and you can’t afford to find out that the house should’ve gone for $20,000-$30,000 more, but the shortcuts didn’t return on that. All I can say is we create the price, they’re stating the price.”

Q I have a vendor whose house is on the market for $179,000. We’ve had 43 groups of people through the property in the last 5-6 weeks. We think it sits on the market at $169,000, but they have a registered valuation of $180,000. How do I get the price down?

Lee Woodward A registered valuer is looking at past sales of surrounding properties. What you’ve got to communicate back to the vendor is the marketplace changes daily. If I sold six homes like yours for around the $169,000 mark, six months from now the same home will be valued based on that sale price. There is isolated valuation based on the snapshot of time and that figure, and then there’s the current sale value. The valuation is in yesterday’s timeline because the comparable sales associated with your home could be three or four months old. I would say:

“Once we sell here, are you going up the range?” “Yes.” “What price is the home you’re buying?” “Probably about $220,000.”

“That would have been valued around $345,000 three months ago because that’s come back in price too. By reducing the percentage that we have to at $169,000 we’ll get a sale price. You haven’t lost $10,000 - the other one’s come back $20,000 – you’ve actually gained $10,000, because that’s the marketplace we’re in.

“It’s impossible for a valuer to value today when they look at the sale price of yesterday. We’re in today’s marketplace, so I appreciate the documentation - it’s great - and I would provide this to a purchaser, saying ‘look at the valuation, you’re getting such a great deal’. It always comes back to this same thing – do you want to move?”

“Yes, but the house next door to me was valued two weeks ago for the same price and has just sold today for $180,000. It’s a very similar property to mine, if not inferior.”

If I was the agent in this situation, I would find out who that purchaser was and ask did they see this one? Because if that purchaser came through this home and they preferred the other, now we’re talking about personal choice, not value. Personal choice will always outweigh value.

Q I’ve got a property the owners want to take off the market and rent out because we can’t get the price they need to sell the property.

Lee Woodward This is a common one, where the vendor thinks if I rent it I haven’t been hurt. You’ve got to go past the sales price and say:

“You mentioned you’ll take the property off the market. Do you really want to be a landlord?”

“Not really, but if I don’t get the price I need, I have to rent it out.”

“A tenant will never look after the property the way you have. We can look at the rent you’ll achieve over 6-12 months, but the appearance level drops $10,000, so we’ve gone back financially.”

“Yes, but I am moving next week and I need income from the property straight away, so either I have to sell it today, or get tenants into it today.”

“Let me tell you the sale price it would go at today, and then at least the transaction is complete and you can move on with your plans. The figure where we’d need to be is $X.”

You actually make their rental request the reason for the price reduction, because price equals time.

Q A lot of the buyers are saying they believe the market is going to drop further in the next six months, so they want to wait before buying anything.

Lee Woodward This is a common objection, and I’d say:

“This is a fair price, would you go ahead with this one?” “I think if I wait a few months they’ll get a bit more desperate and I might be able to pick up the property a little bit cheaper than what it is now.” “How did you arrive at that information? What makes you think that’s definitely going to happen?”

“The media, my finance broker advised to wait six months and I’ve just been watching the prices and seeing what things have sold for. I just feel it’s going to bottom out in six months.”

“I think that would be a scary thing to do. In my time in real estate, which is 15 years, the only time we know a market’s gone down, is when it’s gone up. People think the prices will come down and down, but suddenly the prices go up. That’s the only indication we ever get - when it’s gone down, it’s gone up.

“So it seems to me, you’re waiting for it to go up, whereas the right time to buy real estate is when it fits in with your lifestyle and you need a property. I haven’t seen the prices this good in a long time, so I’m now waiting for the next curve and that’s an up. Can you really afford for it to go up?”

“No.”

“We need to buy now.”

You’ve just got to get into the psychology of the buyer and ask how do you know? They’ll say this person, or this person, but we can’t rely on their information. In real estate history the only way we know it’s gone down, is when it’s gone up.


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Professional Words, Lee Woodward