Beating the 'OverQuote'

BEATING THE 'OVERQUOTE' by Mark Dwyer

Agents can regularly face the dilemma of a competitor over-quoting the estimated market value in order to win the listing. How do you combat the ‘overquote’? Mark Dwyer shows how to beat this challenge in the following support given to one of his members through Sales Trainer Active’s online advice.

"The only question you need to ask is this: “Is it possible that these properties could sell at those higher prices?”

"If this competitor causes further problems, offer a conjunction that affords them the entire fee on the condition that the property sells for full asking price."

They are buying and selling in the same market. And the property they are looking to buy will never be more affordable.

Hello Mark,

I have Mr and Mrs Black interested in buying a large home listed by me for $820,000. In order to do so they need to sell two investment properties (both small lower end units), and the family home they live in. I appraised the properties for them and have given them my thoughts on marketing. In the listing presentation I used the ‘possibilities’ through marketing and adding value by doing so, however, while we were discussing other properties that had sold in the area, they made it clear that another agent had quoted some $75,000 more on the home and $25,000 each per unit, $125,000 difference in price.

In order to get the deal to work I need to get the properties listed at a saleable price so I said I would get back to them. I don't want to waste my time, the owners’ time or the buyers’ for that matter by chasing an unrealistic price. The seller of the large home has agreed to give them 30 days to get a contract on the properties so pricing in this case is crucial as per the lesser time frame.

Any thoughts?

Toby

Mark’s advice to Toby

I believe this situation is relevant to the current market and that which lies ahead. I hope our brief telephone call yesterday summed up my position... LIST ALL THREE PROPERTIES IMMEDIATELY! If all goes well there are FOUR SALES here! And making it work is something we will worry about after we have the listings on board. Here is how we can make this a complete success.

FOCUS ON MOTIVE
At this point price expectation is a low priority. You might be absolutely correct in your opinion on what the incumbent vendor’s listings will sell for but without the listing agreements there is no chance that you will be the agent selling these! Your information confirms all that I need, incentive wise, to take these listings on at any asking price...that borders on sanity! Taking a good look at the motives on all FOUR listings, they are certainly strong! The vendors of the property they want to buy at $820,000 are selling because of a marital divorce.

As you said to me it is a 'Three Star Listing' (absolute music to my ears to see you rating a listing on motive rather than price!) meaning they won't own this address in the next six months. In other words they are definitely selling! The vendors of the three new listings need to sell each of them to buy the one they are interested in. Dependent on how much they want this new property my guess is that they too are Three Star Listings!

All we have to do is sell one and this will lead to two and finally the third – and that means the big one, number four! I understand that a competitor agent has indicated that the two investment units to be sold are, in his/her opinion likely to sell for, or at least ask $25,000 more than you have indicated and that the property they live in should get around $75,000 more. In my opinion this presents little problem at this stage. The only question you need to ask is this: “Is it possible that these properties could sell at those higher prices?”

If the answer is, “yes - it is possible” even though it is not likely, then you should list each property – at the higher asking price!

THE GAME PLAN

List all three properties: You should make a time to list all three properties. On your listing agreement when you write in your indicated price range, [ITALICS]broaden it to the extreme. Where you felt the asking price should have been at say $149,000 increase it to $174,950. However, your estimated selling range should be say, $130,000 to $160,000. As long as the range is broadened allowing for the possibilities that marketing, negotiation and communication could create but at the same time allowing for a comparative result – things will work out!

Initiate daily calls and subjects: You are really going to have to be 'on your game' in building a relationship. And the key to this is the daily call subjects (which you’ll find in my STAids). Check them out and be prepared to call every day.

Pre-plan a price reduction: Our number one aim will be to successfully transfer relevant market information to the client so that eventually they will understand the market as well as you do Toby, but in light of the limited timing you should pre-plan the date at which you will review the pricing on all units. Set it up as soon as the listings are signed. You might even suggest that they come down to the original prices you have suggested – give them something to think about.
   
Prepare for a quick sale: Remind the sellers that you could locate some very eager buyers early and that although the offers they put forward seem low, may prove to be fair in the long-run. So I'd explain to tell in advance that if any buyer comes forward and makes an offer with terms and conditions that allow them to make the purchase and move – then you're going to recommend they accept!
 

Offer 100% conjunction: If this competitor causes further problems offer a conjunction that affords them the entire fee on the condition that the property sells for full (high) asking price. Explain to the owner that this usually tests the conviction of the competitor opinion.

Sow a seed with vendor on purchase: The owners of the property they want to buy are obviously aware of the interest the new clients have in buying the property. I hope you have not put them under the impression that they will/would pay $820,000? I would sow a seed as we suggest in our ‘7 Steps of Synchronised Negotiations’ at a more realistic figure! Once the three properties are sold, in all likelihood for less than their buyer is expecting, I suspect they will be offering less on than the $820,000. We should prepare them for this NOW!

Sell the motive to team: Completely eliminate the asking price as an obstacle with your sales team. Be sure to sell them on the motive – all three listings MUST BE SOLD! Just F.A.B. (find a buyer) team!

Educate '4 Steps to Successful Sale': Just as we explain in ‘Sales Trainer Live’ you need to meet and educate the owner as to the process of making a successful move. Owners often confuse the process and this case is no exception, so an explanation that clearly shows where they have gone wrong will help. The safest and most logical way to move is:
1. Find a buyer
2. Find a house
3. Match the prices
4. Buy home/sell house

This demonstrates that these owners have gotten ahead of themselves by moving to the fourth then third step prior to even finding buyers for the property they need to sell! You need to show that allowing you to control each step represents the least financial risk to them. This is a meeting I would have within the first or second week.

Keep it Relative: And then finally try to keep everything relative. They are buying and selling in the same market. And the property they are looking to buy will never be more affordable – the timing is right so they should look to you for the right advice on the deal.

There you go Toby, we're underway! I'd enjoy talking you through each step over the next couple of weeks as any challenges arise and look forward to regular updates. Go get 'em!

List n Sell
Mark

 Mark Dwyer  leads the team at Sales Trainer Active - a subscription based service providing real time sales support, superb live and recorded training, web-based sales tools, aids and resources as well as a platform for interactive, competitive recognition.  Check it out at www.salestrainer.com.au/active.