At Sales Trainer we say if a Client has not sold their property within a four (4) week marketing period and your team is suggesting that the asking price is preventing the sale, then it is your responsibility to use all your skill to persuade your Client to Reduce to Sell. We call this an R2S.
What is a R2S?
There is a lot of confusion between asking price and its reduction, trim, adjustment, lowering, substantiation and so on.
So to clarify, lets begin by understanding that an R2S is not any other form of asking price manipulation other than its implied definition ” reducing to sell. That is correct reducing the price to a level that will sell it!
This means that no matter how large or small any change in the asking price is, it does not constitute being referred to as an R2S unless the following definition applies
A ‘Reduce to Sell (R2S) is a reduction in asking price to a figure (advised by an active and productive sales team) that will effectively cause the property to sell at, or very close to, this new price within a further ten days on market.
In other words a true R2S is the new asking price you intend to achieve and believe would be the sale price likely to appear in the sales register.
All sounds reasonably simple huh? Just wham the price back and hey presto instant sale! I guess if it were that easy thered be no need for discussion on it.
I think the biggest challenge with engaging the price expectation issue with property sellers is belief and even worse guilt.
Perhaps when you listed the property you overestimated its value and consequently feel responsible for its subsequent overpricing.
The Principles of an R2S
Before you can ever engage the subject of a reduction in price with the Client you need to establish in your own mind what Sales Trainer refers to as the Principles of an R2S.
We attribute about 90% of the success in explaining, substantiating and effectively lowering a property sellers expectation in price to a comprehensive understanding of these principles.
Lets have a look at them
An R2S figure is not a price that can be determined without time on the market. It is determined as a result of the property not selling within a reasonable time of being on the market. Reasonable time includes advertising exposure, sales team awareness and the occurrence of other property sales.
The R2S figure is eventually determined through a combination of the following information:
- Buyer Inspection Communication
- Sales Team Communication
- Advertising Enquiry
- Current Comparable Property Sales
- Genuine Buyer Offers
You Must Believe It
Vital to the success of any R2S is the Client receiving the appropriate advice through your conviction that the property must be reduced to the recommended figure in order to sell.
Without your belief, there is no strong case for the Client to rely upon. If you doubt it, you should say so and why.
Conversely if you believe the Clients property is overpriced and you fail to communicate this to the owner then you are letting the Client down. This is literally ‘lying by ommission you simply must confront the issue.
Delivered in Person
The discussion of an R2S must be face to face. This is as important as it is for a listing presentation. You cannot communicate the information as effectively over the telephone.
It is a very delicate situation that requires personal communication. The rule for this is simple, short of an overseas trip, the R2S meeting must be in person. Sales trainer calls this a VIP (visit in person) meeting.
It Is Always Relative
The market is in itself the descriptive term relating to supply and demand. As such is always relative unto itself. A single property generally doesnt come back in price as an isolated case.
The words good, bad, buyer or seller markets are simply added terminology. The market always remains relative to all available property and any change is felt throughout the market. This is an assurance that must be afforded to the Client.
Opens New Market
An R2S opens the property to a new range of buyers that were previously precluded because of the current asking price.
This point is critical when explaining how the marketing of the property is affected by a reduction in price.
New markets mean a total rejuvenation in appeal and a new field of competing property. That is the advantage of an R2S.
So often salespeople accept responsibility for the price of a property. This is madness! You are not responsible for the state of the market. As an individual you cannot dictate prices, interest rates or competition pricing.
You do not have the power to exert any major influence on the market and as such you cannot be held accountable for its condition.
You are however as a professional salesperson totally responsible for the interpretation, reporting and recommended reaction to any change in market condition.
Therefore the onus of an R2S lies with you when servicing the client.
So there we have the Principles of an R2S that can assist your ‘mental preparation to engage the subject with the owners of those ‘stuck price listings.
Work through each one to build your confidence on pricing and its role in successfully marketing property.
There is of course much more than mental preparation to successfully reducing property prices.
We also need to now how to formulate the practical dialogue. Sales Trainer has the solutions and wed welcome your participation! Go get ’em!
Click HERE for more details.
Vital to the success of any R2S is the Client receiving the appropriate advice through your conviction that the property must be reduced to the recommended figure in order to sell. Opens New Market