How do you fulfil your obligation to be transparent even though it’s not what your customers want to hear? Laing+Simmons CEO and REIA President Leanne Pilkington discusses the importance of frank conversations and how to have them.
Your customers expect, and deserve, you to tell it like it is.
There’s a golden rule in communication which rings true especially when the conversation looms as an uncomfortable one: show, don’t tell.
When it comes to the price-setting discussion with a vendor, show them why their property is actually worth what it currently is.
Explain, through examples, that what may have been true six months ago is not necessarily true now.
This might be through comparable recent sales but also through third party data, market research both macro and micro, and other reputable sources.
Show them the data and let the numbers tell the story. Make sure the vendor clearly understands that you’re basing your opinion on known facts.
Explain the campaign you plan to employ and show them why this is the strategy you’re recommending. Show them how buyers are deciding what they can and can’t afford.
Explain the thought process buyers are working through.
This thought process might encompass interest rate uncertainty, borrowing capacity constraints, stamp duty concerns, and more.
There may be factors specific to the suburb and street. Your vendors need to know where buyers’ heads are at.
And yet, despite these frank conversations, you may still get some push-back.
Even though you’ve been clear about your opinion of a reasonable price expectation, often vendors will still want to price their property higher than your recommendation.
Many think it’s a good way to ‘test’ the market and it means agents may have to have another frank conversation.
Before agreeing to price a vendor’s home above your recommendation, you need to explain a few home truths.
Refer to evidence you’ve collected over previous campaigns that shows how long buyers in the area are typically looking for.
Explain that the best buyers typically come through in the first three weeks of any marketing campaign.
Explain that pricing too high at this crucial first stage might actually discourage those most likely to buy. It can negatively impact the campaign and the end result.
As all agents know, some vendors will nevertheless be insistent. If that is the case, you’ll need to have a frank conversation to set their expectations about what happens next.
For example, you will need to establish the metrics upon which you can evaluate the success of the campaign’s progress.
This might be a certain number of buyers through in the first two weeks. It might be the number of offers received after a certain number of buyers have been through.
Then, if the number of buyers or offers don’t meet those benchmarks, your vendor will know that you need to revisit the price conversation. Both sides will be clear on the next steps.
As an aside, the same technique applies to frank conversations you have with your team.
If you get buy-in for the goals they have committed to, and ask their permission upfront to hold them accountable to those goals, it makes having those conversations so much easier.
Setting a clear expectation about what happens next is an absolute game-changer for managing frank conversations.
So, be sure of your position. Base it on thorough research. If you’re in a listing presentation and the vendors say other agents believe they’ll secure a higher price, let them know that if and when that strategy fails, they know where to find you.
After all, a customer who feels hoodwinked will not be a customer again.
